FBA Issue 10: September / October 2006
Asia's next bull run?
by Gemma DELMO
AS THE fastest growing regional economy in the world, Asia has become a paradise of sorts for global commerce. With two decades of robust economic performance showing no signs of slowing down, doing business in the largest continent in the world guarantees an almost lucrative deal.
Among Asia's agribusinesses with rising potential is ruminant farming. Aside from meat and dairy, a wide range of products can be derived from ruminants. These include hides, skins, fibres, manure as a fertiliser or alternative fuel, transport (in rural areas where cars and vehicles are lacking) and decorative horns.
Cognizant of its economic importance, ruminant trade in Asia is becoming more prominent. In developing countries such as Thailand and Vietnam, dairy and cattle farming--once considered rural activities--are now a growing sector in domestic agriculture. Thailand's dairy cattle numbers grew 10 percent from 2003 to 2004 while in Vietnam, dairy production grew almost 46 percent in 15 years, and beef output at 2.15 percent annually on average.
Asia's frontrunners, China and India, have also made gigantic leaps in ruminant trade. China is now the third largest beef producer in the world after the United States and Brazil, while India is the world's top milk producer.
Even as Australia, Europe and the US continue their dominance in global ruminant trade, the UN Food and Agriculture Organization foresees that Asia will be a major player in the next 14 years. According to Dr Prem Nath, assistant director-general and regional representative of the FAO-Asia Pacific region, a major "livestock revolution", driven by population and income growth, and urbanisation, is poised to happen in Asia by 2020.
As a rich source of protein, bovine meat made headway in 1999 in Asia, significantly, after the regional financial crisis. The FAO noted a rise in consumption from 1961 to 1999 in the prominent beef markets of today, Japan and South Korea. Annual consumption in both countries rose from 2.6 percent to 7.5 percent, and from 5.7 percent to 11.6 percent respectively in that period. China is another dramatic example of the up-and-coming: annual consumption growth rose from negative 0.1 percent in 1961 to 5.2 percent in 1999. Recently, China's Changchun Haoyue--a leading meat processor in Jilin--marked a historic feat as the first in the country and the Asian region to slaughter 100,000 head of sheep.
Mutton and chevon (goat meat) have gradually gained a share in the meat markets of Mongolia, Nepal, Pakistan and Bangladesh but remain insignificant in South-east Asia. Feverish campaigns by small ruminant traders in Thailand, Vietnam, Laos and the Philippines to promote goat milk, mutton and chevon in diets were not enough to fully penetrate or create distinct market niches. Moreover, fine breed goats and sheep have trouble growing accustom to tropical areas. Such breeds registered high mortality rates in recent years during periods of acclimatisation and breeding.
This is an excerpt, full versions are only available in FEED Business Asia. For subscriptions enquiries, e-mail firstname.lastname@example.org