Buffalo Meat Market intelligence report - Agri Exchange
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Market intelligence report Buffalo Meat
Worldwide Buffalo Stories
Australia Market sentiment
Australia is a relatively small player when it comes
to Buffalo production, accounting for about 3% Present Indian government has
of global supply, but is a major player when it started National Animal Disease
comes to exports, particularly in providing high Control Programme (NADCP) for
value product backed by integrity and quality eradicating FMD with 100% funding
assurance systems. from Central Government.
The excess turnoff of breeding stock and poor With the exception of the European
rainfall outlook has resulted in adult cattle Union (EU), all major Buffalo exporters
slaughter for 2019 being revised higher to 8.4 are forecast to increase production in
million head, up 7% on last year. coming years and competition for
volume and value share in Australia’s
Buffalo production has also been adjusted higher export markets is expected to intensify.
for the year to reflect the elevated turnoff and is
forecast at 2.4 million tonnes carcass weight South America lags the efficiency of the
(cwt), up 4%. US in producing Buffalo but it has been
catching up.
Chile USA
Chile signs major Trade Agreements US carcass are heaviest in world
FTA between Chile and Thailand has come into force US, with a substantial domestic feed
which will provide preferential access to more than grain supply, large herd and
90% of products in bilateral trade including Buffalo consolidated feedlot industry, is the
meat. This may boost trade between the two world leader in Buffalo production. US
countries and give Thailand access to Chile market;
carcass is the heaviest of all producers
one of the largest importers. Chile and South Africa
and economies of scale allow it to
have also lifted tariffs on 458 products including
Buffalo meat.
compete strongly.
Brazil New Zealand
Brazil has the world’s second-largest cattle New Zealand’s Buffalo exports are
herd—232 million head—and its expected to lift, helped by strong
production is largely based on grass. export demand and an expected
weakening of the New Zealand
dollar.
Brazil will continue its export growth
ASF in China is most likely to
trajectory for the next decade, reaching 2.9
benefit New Zealand’s Buffalo
million metric tons, or 23 percent of the exports which are a more apparent
world’s total Buffalo exports, by 2028. substitute for pork. New Zealand’s
Buffalo exports are expected to be
up by 5.9%.
Argentina Mexico
As with a number of other markets around Buffalo production in Mexico is
the world, China demand continues to forecast to increase by 2.5%
drive export volumes and prices in suggesting an increase in lot
Argentina. feeding and heavier cattle coming
to the market.
While Argentina has been granted access
Slaughter for next year is
to the US market the volume shipped so
forecast at 6.325 million head,
far this year has been minimal and that is
1.2% higher while production at
not expected to change in the near future.
2.070 billion pounds is forecast
Slaughter has been running significantly
up 2%
above year ago levels for much of the year
Weak peso and strong demand
as robust export prices encourage
from US to drive exports.
producers to liquidate.
Buffalo consumption and import demand to increase in GCC countries
Increasing disposable incomes, ongoing urbanization and westernization has led to a growing base
of wealthy consumers and Buffalo consumption is expected to increase which will remain a major
area of opportunity for Indian Buffalo exporters.
Prospects for Indian Buffalo meat exporters in 2020
Buffalo meat will continue to be highly traded, fueled by increasing consumption, low
supply growth and increasing demand from the developing world. Broad global consumer
trends affecting Buffalo consumption through foodservice and retail channels include shift
towards more fresh and less processed offerings. Traditional markets of India will continue
to demand more Buffalo as a source of protein. The old markets of India such as the
Middle East will continue to increase demand for halal meat where Indian Buffalo meat is
an affordable protein.
USA seems to be the largest importer of Buffalo meat followed by Japan and Germany. European Union member countries and Mexico remained consisted importers of Buffalo Meat in the world Import growth highest in case of United States America, Japan, Germany, Chile, and United Kingdom: prospective markets for 2020
International Demand to Outstrip Global Supply Robust international demand is expected to drive export growth, with Buffalo exports forecast to reach 11.5 million tonnes in 2020, an increase of 4% on 2019.Global production growth will come on the back of production gains in Brazil, the US, India and Argentina, which should offset production declines in China, the EU and Australia. The influence of African Swine Fever (ASF) on Buffalo demand is occurring at a time when the global Buffalo supply is set to grow only 0.9% from 2019 levels, meaning supply shortages and strong import prices will likely be maintained. As a result of the African Swine Fever (ASF), a quarter of world’s pig population is expected to die and consumers from around the world are expected to substitute towards alternative protein sources like, Buffalo and other Buffalo meat. In Australia, Buffalo supply remains tight in the short term as a result of ongoing drought conditions.
Share in Global Buffalo Exports
17% Brazil
23%
Australia
India
USA
5% 17%
Canada
5% New Zealand
6% EU
15% Rest of World
12%
Source: Meat and Livestock Australia
Global Consumption of Buffalo Meat will be on rise
The outlook for global Buffalo consumption is positive, largely underpinned by growth in
population and household wealth in developing markets, particularly Asia. Increasing
demand for inexpensive proteins in South-East Asia, and a preference for halal
slaughtered meat in the Middle East, are expected to continue to rise.
Global Opportunities and Challenges for India
Growing household incomes – are providing many consumers the ability to increase
protein consumption, with those shifting into the middle-upper income brackets often
seeking to improve the quality of meat they consume.
Differentiated Segments –In developed markets, consumers are seeking
differentiated segments within the Buffalo category – such as grass-fed and grain fed
product or certified breeds and raising claims.
National Animal Disease Control Programme – Many countries like China have
imposed a ban on Indian buffalo meat on the grounds of ‘Foot and Mouth Disease(FMD)’. Present Indian government has started National Animal Disease Control Programme (NADCP) for eradicating FMD with 100% funding from Central Government. Growing Consumer Awareness –In many mature markets, growing consumer interest and awareness of provenance, sustainability, animal welfare, food safety and traceability provide messaging opportunities for Indian Buffalo brands and underpin ambitious industry-wide programs for India to differentiate itself. Strong Price Competitiveness –The low price of Buffalo, compared to competing countries, will continue to drive growth and keep the category lucrative for Indian exports. Competitors like Australia are reeling under pressure from high cattle prices which will prove beneficial for Indian exports. Challenges from Competitors –Growing production and exports from key competitors, particularly Australia, New Zealand and Brazil will intensify competition in coming years. Strong global demand, led by import growth in global markets, support exports, but a slowdown would negatively impact India’s export opportunities. Domestic and International Trade Regulations –The Indian Buffalo and buffalo meat sector remains volatile and is highly vulnerable to domestic and international trade regulations. Source: Meat and Livestock Australia
Global Buffalo consumption is forecast to grow at 1.2% per annum out to 2022
supported by population and economic growth. However, Buffalo’s share of global meat
consumption, at 21.5%, is expected to decline slightly due to a faster expansion of the
poultry sector.
Source: OECD-FAO Agricultural Outlook 2019-2028
Per Capita Annual Buffalo Consumption
2028
2028
2028
2028
2028
2028
2028
2016-18
2016-18
2016-18
2016-18
2016-18
2016-18
2016-18
NORTH AMERICA OCEANIA EUROPE LATIN AMERICA WORLD ASIA AND AFRICA
AND CARIBBEAN PACIFIC
Competitive position of Indian Buffalo Meat vis-à-vis global players
India has the world’s largest Buffalo population – an estimated 304 million head (cattle
and water buffalo). India has 15% share in world Buffalo exports although it has only 6%
share in global production. In major markets across the Middle East and South-East Asia
Indian Buffalo meat is positioned as an affordable protein. The strong Buffalo/Indian
buffalo meat export opportunities will also support production to some extent, as
increasing demand for inexpensive proteins in South-East Asia, and a preference for halal
slaughtered meat in the Middle East, are expected to continue to rise. India faces
competition from mainly Australia, Brazil, New Zealand and United States of America in its
existing markets. Along with the constant disruption in the domestic regulations withinthe Buffalo industry, India has also limited market access and has no Foot and Mouth
disease free status, limiting its presence in many markets.
SHARE OF GLOBAL BUFFALO PRODUCTION
India has the world’s
USA
largest Buffalo population – Rest of 18%
an estimated 304 million World
33%
head (cattle and water
buffalo). India faces
Brazil
competition from mainly 14%
Australia
Australia, Brazil, New Zealand 3%
and United States of America Argentina EU
in its existing markets where 4%
India 11%
Indian Buffalo meat is 6% China
11%
positioned as an affordable
protein.
Indian Buffalo Meat Exports to Rise Backed by Price Competitiveness
Under the India-ASEAN Free Trade Agreement, the import duties on Indian buffalo meat
in ASEAN countries will reduce to zero over 2014-2022 period. This will give India added
advantage in price competitiveness in markets where Indian Buffalo meat is already
considered a cheap source of protein thereby giving India and additional edge over its
competitors.
Opportunities for India
Considering the growing import demand of Buffalo meat in these identified countries,
potential for India remains highest in case of USA followed by Japan, Germany, Chile and
United Kingdom.Potential for Export of Buffalo Meat from India in 2020 Opportunities for India
25,00,000
estimated on the basis
20,00,000 of World import of
15,00,000 Buffalo meat versus the
10,00,000 actual export from
5,00,000 India.
0
Import from Import from
Country Gap
World India
United States of America 2,465,546 0 2,465,546
Japan 2,088,047 0 2,088,047
Germany 1,394,382 0 1,394,382
Chile 963,285 0 963,285
United Kingdom 960,804 0 960,804
Netherlands 799,906 0 799,906
Korea, Republic of 770,882 0 770,882
Mexico 759,822 0 759,822
France 732,392 0 732,392
Italy 643,869 0 643,869
To what extent could Indian exporters exploit this growth opportunity?
India produces 6% of global Buffalo meat production however; it is one of the largest
exporters of buffalo meat and contributes to 15% of global exports. Since Indian Buffalo
meat is price competitive it is demanded in its export destinations as it proves to be an
affordable protein source. India is still expected to grow strongly in exports beating its
close competitors like Australia in price competitiveness whereas players like Brazil are still
expected to pose a challenge in price.
Indian exporters are expected to get duty-free access in Buffalo meat to ASEAN markets
under the India-ASEAN Free Trade Agreement by 2022. While increased import demand
will keep Indian exports afloat, the African Swine Fever (ASF) will play a key role in shifting
consumer preference from pork to Buffalo. Pork importing countries like Mongolia andMalaysia who import pork majorly from China may also switch their preference for source of protein and will prove to be attractive destinations for Buffalo. This will be an impressive opportunity for Indian Buffalo meat exporters towards finding new markets. Prime Competitor of Indian Buffalo meat for 2020 The main competitor in Buffalo meat industry is USA which has good quality meat, leverages an impressive economy of scale and has access to high value markets. Another major competitor is Brazil with the second largest cattle stock as well as a price competitive player in India’s existing export destinations. Brazilian exports to Jordan pose a great deal of threat to Indian exports to the market as Brazil control 66.5% share in Jordanian Buffalo meat imports against India’s share of 2.3%. Australia although is reeling under the pressure of not being price competitive has significant presence in India’s export markets and will continue to pose challenges to India’s exports on the grounds of regulatory compliance since it claims of exporting Buffalo meat which is healthy while India faces the brunt of not being compliant to the FMD free status. In markets like Saudi Arabia, Qatar and UAE where Indian Buffalo meat exporters have a significant presence, Brazil and Australia hold more than 50% of the import share New Zealand’s exports pose a significant competition to Indian exports in Oman market where they hold 54.3% share of the country’s Buffalo meat imports while Indian exports account for 21.4% and Australia controls 11.4% share. South Africa is also a major in Jordan, Qatar and Kuwait markets where it controls 14.1%, 18.5% and 51.3% share in the imports of those markets, respectively. Below graphs show India’s major competitors in the Saudi Arabian and UAE market, 2 major export destinations for India in Buffalo meat.
COMPETITORS IN SAUDI ARABIAN MARKET
New Zealand Canada
India
Australia
Brazil
COMPETITORS IN UAE MARKET
United States of
America India
New Zealand
Australia
BrazilCan India sustain in its export markets for Buffalo Meat?
Market Average
Country L2 Player CIF FLP
Share Tariff
Saudi Arabia India 21.6 5403 0% 5403
Saudi Arabia Brazil 41.6 4,559 0% 4559
Saudi Arabia Australia 26.9 8,794 0% 8794
Saudi Arabia New Zealand 4.9 9,908 0% 9908
Saudi Arabia Canada 2 9193 0% 9193
United Arab Emirates India 13.1 4,930 0% 4930
United Arab Emirates Australia 30.2 11,686 0% 11686
United Arab Emirates Brazil 23 4654 0% 4654
United Arab Emirates New Zealand 11.8 8,592 0% 8592
United States of
United Arab Emirates America 10.9 13862 0% 13862
Oman India 21.4 4,205 0% 4205
Oman New Zealand 54.3 6425 0% 6425
Oman Australia 11.4 7,604 0% 7604
United States of
7.1
Oman America 16145 0% 16145
Oman United Arab Emirates 3 5239 0% 5239
Jordan India 2.3 4,536 10% 4989.6
Jordan Brazil 66.5 4,440 10% 4884
Jordan South Africa 14.1 5,905 10% 6495.5
Jordan Colombia 12.4 4487 10% 4935.7
Jordan Australia 2.7 8,318 10% 9149.8
Qatar India 5.9 4,840 0% 4840
Qatar Australia 49.1 8,113 0% 8113
Qatar Brazil 12 4431 0% 4431
Qatar New Zealand 10.2 8,144 0% 8144
Qatar South Africa 18.5 8,898 0% 8898
Kuwait India 5 6,735 0% 6735
Kuwait South Africa 51.3 6,586 0% 6586
Kuwait Australia 27.1 8849 0% 8849
Kuwait New Zealand 15.4 7641 0% 7641
Kuwait Netherlands 0.9 27545 0% 27545
Bahrain India 13.6 4,568 0% 4568
Bahrain New Zealand 31.7 9,247 0% 9247
United States of
17,929
Bahrain America 22.7 0% 17929
Bahrain Australia 14.6 13,029 0% 13029
Bahrain Brazil 7.4 4723 0% 4723How feasible will it be for Indian Buffalo Meat to enter newer
growing markets?
India's
Share of
share in Unit
Top 15 Averag Competing Competing
Destinat Price Final Landing Final
Destinati e Tariff Countries in Country in Unit Average
ion (India) - Price India Landing
on (India) Newer Destinatio Price tariff
Country' USD/to (USD/tonne) Price
Countries - in % Destinations n Country's
s nne
Imports
Imports
Canada 48.10% 5014 0.00% 5014
United Mexico 25.70% 6594 0.00% 6594
States of 0 NA 10.20% NA Australia 21.30% 8715 5.60% 9203.04
America Nicaragua 1.30% 4985 0.40% 5004.94
Japan 1.10% 82676 10.20% 91108.95
USA 48.60% 7,491 38.50% 10375.04
Australia 45.70% 7497 26.60% 9491.202
Japan 0 NA 38.50% NA New Zealand 2.80% 9076 26.60% 11490.22
Canada 1.60% 6144 26.60% 7778.304
Mexico 1.20% 8422 26.60% 10662.25
Netherlands 23.50% 6,804 0.00% 6804
Argentina 21.10% 11,626 42.30% 16543.8
Germany 0 NA 42.30% NA Ireland 8.00% 9994 0.00% 9994
Austria 7.00% 5550 0.00% 5550
France 6.20% 8645 0.00% 8645
Brazil 41.70% 4,429 0.00% 4429
Paraguay 33.00% 5099 0.00% 5099
Chile 0 NA 6.00% NA Argentina 19.80% 5789 0.00% 5789
USA 2.80% 8433 0.00% 8433
Uruguay 2.50% 5969 0.00% 5969
Ireland 72.30% 6,304 0.00% 6304
Netherlands 8.00% 6508 0.00% 6508
United
0 NA 42.30% NA Poland 5.30% 6225 0.00% 6225
Kingdom
Australia 2.70% 9793 42.30% 13935.44
Uruguay 1.90% 9430 42.30% 13418.89
Ireland 18.00% 7,109 0.00% 7109
Uruguay 14.50% 9,814 42.30% 13965.32
Netherlan
0 NA 42.30% NA Argentina 13.50% 11,389 42.30% 16206.55
ds
USA 9.90% 12,208 42.30% 17371.98
Belgium 8.60% 7,272 0.00% 7272
Korea, 0 NA 40.00% NA USA 57.70% 9,870 21.30% 11972.31Republic Australia 41.70% 9,836 26.60% 12452.38
of Canada 0.50% 10,140 29.30% 13111.02
New Zealand 0.10% 7,511 29.30% 9711.723
Mexico 0.00% 5000 40.00% 7000
USA 84.70% 6,095 0.00% 6095
Canada 10.30% 6,339 0.00% 6339
Mexico 0 NA 20.00% NA Nicaragua 4.50% 4,717 0.00% 4717
Australia 0.20% 8,114 20.00% 9736.8
Japan 0.20% 120,250 20.00% 144300
Netherlands 32.80% 6,915 0.00% 6915
Ireland 18.70% 6269 0.00% 6269
France 0 NA 42.30% NA Germany 16.10% 7430 0.00% 7430
Belgium 9.50% 10872 0.00% 10872
United
Kingdom 5.90% 8944 0.00% 8944
Ireland 26.10% 9,064 0.00% 9064
Netherlands 14.00% 8,470 0.00% 8470
Italy 0 NA 42.30% NA Argentina 9.50% 10,541 42.30% 14999.84
Poland 6.70% 7,062 0.00% 7062
France 6.60% 9,728 0.00% 9728Possible impact of Currency Fluctuations in new markets
Expected
Destination Current Exchange
Home Rate
Country Rate Change Direction
Currency after 1
Currency (Foreign/Domestic)
year
INR USD 0.0139 0.0133 -4.317% INR to Depreciate
INR JPY 1.509 1.43 -5.235% INR to Depreciate
INR GBP 0.0108 0.0105 -2.778% INR to Depreciate
INR EUR 0.0126 0.0122 -3.175% INR to Depreciate
INR KRW 16.284 15.924 -2.211% INR to Depreciate
Strategy to promote Indian Buffalo Meat exports
India needs to work on its quality for Buffalo meat and get the FMD status which is a
major requirement for most of the high value markets like Japan, USA, China and EU
countries. Also, the likely in population, rise in disposable income and affordable protein
requirements will increase the protein hunger of the world especially driven by the
Middle East and Asian nations. These countries will provide excellent export
opportunities.
The African Swine Fever (ASF) is likely to wipe out one-fourth of the pig population from
the face of the earth which will pose significant food security issues in the world and
India needs to ramp up its products and export efforts to meet the Buffalo meat
requirements and fill the gap, that will likely emerge as a result of the changing
consumer preferences from pork to Buffalo meat.
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