Current Issues with India’s Beef Export Market

Fresh Whole Beef
Market & Price Trends
India's beef export earned a massive share in the beef markets particularly in Southeast Asia in recent years, almost out competing Australia, the major beef exporting country in Asia. However, the Indian beef export market is not without problems. Domestic conflicts, competitions with other beef exporters, and the stigma of Covid-19 transmission all contributed to the significant decrease in export rates despite the efforts of the Indian market to revive the industry back to its former glory particularly in Indonesia and Vietnam where Indian beef exports once abound.

The Indian Beef market overview

Indian beef or specifically buffalo beef had been expanding its presence and targeting middle-low income consumers in South East Asia and the Middle East. There are many distinctions that separates it apart from other beef such as Australian beef. Unlike Australian or Brazilian beef where cattle are raised for the sole purpose of producing meat, Indian cattle are used for mixed farming systems mainly for transport, grazing, dairy etc and are only sold to slaughter once the animal becomes old or unproductive, hence Indian farmers have a very low financial reliance on meat selling profit. The animals are raised almost entirely on natural feed without any supplements in the form of antibiotics, hormones and growth-enhancers which makes for very low cost maintenance. The local demand for beef in India is relatively low as the population in Indian states where most of the Indian beef is produced are predominantly vegetarian, and a high preference for chicken, mutton and eggs compared to beef.

Additionally only frozen meat in the form of deboned and deglanded frozen buffalo meat is exported overseas. Beef is second only to poultry as the most consumed meat in India. Fresh beef is almost entirely for domestic consumption while frozen beef has an almost negligible demand and more importantly the only form that the government allows as India strictly adheres to the OIE protocol on exporting meat.

These and other factors have accounted for at least 20% lower price of the Indian beef compared to Australian beef. Hence the frozen meat niche has almost been captured by the Indian beef exporters in many parts of Asia.

Previously, the Southeast Asian market was exclusively supplied by Australian beef suppliers but local factors in Australia such as adverse drought brought about by climate change created a lower inventory hardly enough to meet local demand and decreased the beef export in the first quarter of 2021 to a low of 22%. The insufficient supply created high prices and opened up a niche of opportunity for other beef suppliers to fill in, particularly for frozen beef, as a cheaper alternative to expensive Australian fresh beef. According to a presentation by APEDA, the Buffalo beef industry in India, an increase in export value from USD 2,754 per MT to USD 2,921 per MT, and maintained its export value at USD 3.17 billion in 2020-21 has been recorded.

Source: US Department of Agriculture: USDA

Despite the above-mentioned factors, Indian beef exports are not without conflicts both domestically and overseas. The biggest obstacle despite its apparent success is the Indian government itself. Slaughter of cattle is viewed as a sensitive religious issue that goes against the Indian culture and Hinduism. Widespread bans on the sales of live cows and buffaloes destined for slaughter had been put in place as far back as 2017 where lawmakers submitted petitions to the supreme court for approval but as of the moment, still is under review.

Another issue faced by the Indian beef industry is the limited access to bigger markets. As to date, Indian beef exports are virtually absent in developed countries such as Japan, Korea, China which are so far, only accessible to other exporting countries such as Australia, USA and Brazil.

Despite the presence of Indian beef in South east Asia and Middle East, Indian beef is still viewed as inferior to Australian beef and serves only as an alternative option in the absence and/or incapacity to purchase Australian beef.

Another key issue in the Indian beef export market is the record-breaking spread of Covid-19 in India which has sparked fears that meat may be a potential vector for Covid-19. Additionally during the early onset of covid-19 in India, lockdowns in major cities has greatly crippled the production of beef for export due to lack of raw materials and problems with logistics. In the first quarter of 2020 alone, estimates of around usd 660 million loss.

In connection with this issue, importing countries also placed sanctions on Indian beef imports. Particularly Indonesia and Cambodia where temporary suspension of the import of Indian beef are apparently put in place.

Source: APEDA. "Indian Meat Industry Red Meat Manual"

The confusion over the Indonesian beef market status

Indonesia became one of the major destinations of Indian beef back in 2016 after the government allowed diversifying the supply of beef to address the rising prices of Australian fresh beef in the local market. Australian beef used to be the most widespread and readily available beef in Indonesia but the biggest factor to its decline is the price hike. Australian beef for instance rose from Rp to 145,000Rp to 160,000/ kg compared with Indian buffalo beef which increased from Rp80,000 to Rp 94,000/kg in the first quarter of 2021.

Source: Beef Central. "SE Asia Report: feeder prices hold above $4/kg"

This year, as waves of covid-19 delta strain infection is sweeping across India. Indonesia was one of the markets that apparently issued a temporary ban on Indian beef export but according to a press release by the embassy of India in Jakarta, despite the prevalence of covid-19, Indian exports from April 2020 to March 2021 is at usd 3.17 billion which is also the same levels as of 2019 with no issues in supply shortage.

No official announcements or declaration were issued by the Indonesian government regarding the temporary ban but resources such as Reuters reported that out of the total volume of 100,00 tonnes of beef import issued to Indonesia, so far, only 13,000 tonnes have been met and Indian beef is becoming less visible in the market these days.

The rise and fall of the Vietnamese import

Vietnam was the top importer of Indian beef and is one of the major forces that contributed to the rise and eventual fall of the Indian beef market. In 2017-2018 alone. At its peak, Vietnam had an overall highest market share of 55% in the total export but the share went down and the latest figures point out to just a mere 11% of the overall export volume of India’s beef.

The economic growth and the demand of consumers for beef, not to mention the import duties settled under India-ASEAN trade agreement are some of the major factors that lead to the rise of Indian beef export in Vietnam.

Despite being the top destination for Indian beef, the effects of strong market competition in the international market particularly from Australia and Brazil, a more stringent government inspections standards and protests from within India against beef exports and livestock protection have all contributed to the decrease in import demand from the material presented by APEDA in the 2017-2018, Vietnam imported 740,000 MT which plunged to around 200,000 MT in 2019-2020.

The surprising case of Cambodia’s meat import ban

Most of the meat import bans issued against India have not been officially pulled off such as the case of Indonesia where the media reports import bans had been put in place but no official announcements were issued by the government. So far only Cambodia officially declared a ban on the grounds of covid-19. On May 1st of this year, Cambodia officially imposed an indefinite ban on the frozen meat and frozen goods originating from India as a measure to prevent the further spread of COVID-19 in India.

The Indian Ambassador in Cambodia Devyani Khobragade, in a series of meetings with Cambodia’s Economic and Finance Minister, Aun Pornmoniroth, insisted that the ban should be withdrawn under the argument that there is no concrete proof that COVID-19 is transmissible through food and packaging materials and that all testing that the Pasteur Institute of Cambodia conducted on samples of imported Indian meats are free of COVID-19 and fit for consumption.

The Cambodian government’s decision to lift the ban resulted in the release of 35 fully loaded containers of frozen meats and other frozen goods that were stuck in customs control prior to the implementation of the ban. Samples from the goods all yielded a negative result for contaminants.

Among the destination countries of Indian beef, Cambodia is notably one of the few with an actual increase in export. Frozen beef products exported to Cambodia was estimated to be worth $9.3 million in just the first 2 months of 2021 and in 2020 the total import for buffalo meat products amounted to $17 million which is a huge jump from 2019’s total import of $6.4 million.

So far Cambodia is the only country to have openly banned (although temporarily) Indian beef on the grounds of potential covid-19 transmission risks. Despite yet another wave of COVID-19 spreading in India, the Agricultural & Processed Food Products Export Development Authority (APEDA) is heavily promoting India’s agricultural exports.

APEDA assures that frozen buffalo meat is prepared and exported following strict international protocols and that all facilities handling the meat are practicing strict hygiene, physical distancing and sanitation measures.

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