Wednesday, January 07, 2015

Expansion Forecast for Buffalo Meat Markets - India to Dominate

The sustained increase over the past three years in Indian buffalo (carabeef) exports is projected to continue, according to a report recently commissioned by Meat and Livestock Australia (MLA) analysing the industry and its impact on the world beef market over the next five years.

Shipments of approximately 2.2 million tonnes carcass weight equivalent (cwe) Indian carabeef are forecast for 2020.

This assertion is based on the projected growth of India’s dairy sector, of which carabeef is a by-product, continued demand in international markets, and the abundant supply of water buffalo throughout the Indian subcontinent.

Beef consumption is shunned on religious grounds by Hindus, who account for approximately 80 per cent of the Indian population, leaving a substantial surplus from the routine culling of unproductive and dry buffalo cows for export.

Carabeef exporters have established a strong foothold in markets that are expected to expand under the combined power of population growth and higher per capita incomes, like China, Malaysia, Vietnam and Saudi Arabia.

According to the report, Indian carabeef is currently trading below Australian beef in global markets, yet it is apparent that carabeef prices are rising to follow trends for Australian and Brazilian product.

Forecasts for growth in the Muslim and Christian segments of the Indian population are expected to underpin an increase in domestic disappearance by around 900,000 tonnes cwe, which would mean approximately 14 kilograms per capita consumption among that cohort by 2020.

Additionally, assuming no changes in the status of the current grey channel trade via Vietnam and Thailand, exports to China are expected to reach 1.375 million tonnes cwe, and account for about 60pc of India’s carabeef exports.

Importantly, the report indicates that India is unlikely to supply Australia’s traditional markets within the short to medium term.

Furthermore, the modelling suggests that while increased supply of carabeef will put downward pressure on world beef prices, the current market is sufficiently flexible to redistribute product to different markets in response to relatively small changes in price.

This demand for buffalo and buffalo meat should also have a positive effect on Australian export of buffalo for live export markets, as well as some modest potential for improved export of boxed carabeef meat into some markets.
  1. Australian buffalo
Australia cannot match the supply from Indian sub continent sources, but with some markets requiring foot and mouth disease freedom assurances there is a place for our export products.

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