July 1, 2015

 

Barring FMD, India to remain world's No. 1 beef exporter

 

By Rick Alberto

 

 

The last four years have seen India growing prominently as a beef exporter, rising to become the world's top beef supplier in 2013, when it exported 1.344 million tonnes of beef, overtaking Brazil, which shipped 1.291 million tonnes.

 

Last year, according to the second-quarter beef report of agricultural lender Rabobank, Indian bovine meat exports recorded their highest export earnings at US$4.7 billion.

 

This year India is expected to further widen its lead over Brazil, with the US Department of Agriculture projecting exports to reach 2.4 million tonnes versus Brazil's 2 million.

 

Consider this: India has 300 million-head bovine herd, the largest in the world, and a third of this are buffalo, a source of low-cost meat.

 

The Rabobank report sees India continuing to be a major supplier of low-cost bovine meat to global markets, although "the growth rate going forward could be much lower than what we have seen in the past five years".

 

India's beef sector, which includes buffalo meat, or carabeef, recently got a boost after China lifted its temporary ban on buffalo meat imposed since 2007 over foot-and-mouth disease (FMD) issues. The reentry of Indian carabeef into the Chinese market is seen to boost beef-export revenues by about US$1.5 billion yearly.

 

Despite this, however, Rabobank thinks India should not rely too much on China's high appetite for bovine meat. "India needs to find more markets to mitigate any possible volume slowdown risk from China", says Rabobank analyst Angus Gidley-Baird.

 

Low-cost and halal

 

Indian carabeef has it going on mostly because of its value. Last year's price was estimated by Global AgriTrends to be $1.46 per pound. In contrast, US beef was priced at $3.30 per pound. Needless to say, beefs from Canada, Australia, New Zealand and Brazil were each priced substantially higher than India's.

 

Moreover, Indian carabeef is halal, which is acceptable to the Muslim world. The Middle East should, therefore, be a big market, which is also being targeted by Brazil.

 

Barring FMD, India should be able to maintain its status as the world's No. 1 beef exporter. Although Brazil also regained official access to China in May 2015, in the short term official access to China is not expected to see a large increase in beef exports, according to the latest beef report from Rabobank.

 

Last week, Russia temporarily banned buffalo meat imports from India's Uttar Pradesh state, where several cases of FMD had been reported. Russia started to import meat from India only this year, as alternative to the traditional suppliers of agricultural and food products such as Australia, Canada, the EU, the US and Norway, which all imposed trade sanction on the country in August last year over its alleged backing of separatist rebels in Ukraine.