India’s beef presence to expand, but not without challenges
27 October 2016
India’s emergence as one of the world’s largest beef exporters has continued to generate interest, especially as production builds and market access dynamics change.
As things progress, the question becomes, how much of a competitor will India be for Australia? Looking forward, the two big drivers of growth in the beef sector for India are dairy production and export demand.
Firstly, Indian beef production is largely driven by the expanding dairy industry, where much private investment and government support has occurred in recent years. Most of the focus has been on improved dairy herd management, veterinary care, genetics and nutrition. As a result of this expansion, beef production from the older unproductive females and young male calves is expected to grow 5% year-on-year in 2016, to 4.4 million tonnes cwt, and a further 4.1% in 2017, to 4.5 million tonnes cwt. That’s more than double the projected production in Australia in each respective year.
It’s interesting to note that while slaughtering cows and consuming bovine meat goes against the majority of the Hindu population’s culture, there is still a considerable Muslim and Christian population in India. In fact, almost every Indian state prohibits the slaughter of cattle, except for Kerala and North Eastern States, where a significant part of the population is Muslim and Christian.
Politics will continue to be a major determinant of Indian beef production. The Bharatiya Janata Party (Hindu nationalist) has recently risen in influence and prohibited slaughter of cattle in some states that previously allowed it. At the same time, parties like the Indian National Congress traditionally support the carabeef industry and states ruled by that party have seen significant growth in beef production. Despite the recent clamping down of beef production in some regions with changing politics, national production is still forecast to rise.
When it comes to export demand, the major constraint for India is the prevalence of Foot and Mouth Disease (FMD). In fact, in October 2015, Russia banned imports from India after its inspectors found FMD virus in an imported lot. Similarly, three years after India and China signed a memorandum of understanding regarding beef exports to China, no further arrangement has been made. However, the door has recently officially opened for India in Indonesia, with recent announcements that Indonesia will import 100,000 tonnes of Indian product for the calendar year 2017. To date, India’s major markets have been Vietnam, Malaysia, Saudi Arabia, the Philippines, Thailand and Egypt.
Moreover, India’s beef presence is anticipated to continue expanding over the years ahead, but the persistent internal political pressures around cow slaughter will constrain growth potential. At the same time, FMD will continue to limit the number of markets willing to import Indian carabeef – especially the higher value markets of Japan, Korea and the US, but India’s presence will continue to build in the price sensitive regions.
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