Bovine growth could slow for India
In 2014, Indian bovine meat exports reached record values, at US$4.7bn. However, in Rabobank’s Beef Quarterly Q2 report, analyst Angus Gidley-Baird warned the country should look to diversify its export markets to guard against market wobbles.
The growth of Indian bovine exports has declined from +30% from 2010 to 2013, to 11% in 2014, and is forecast to fall further to +7% growth in 2015, with exports at around 1.5 million tonnes (boneless), with the declines down in part to a shrinking population of male buffalo.
"With high dependence on the Chinese demand, however, India needs to find more markets to mitigate any possible volume slowdown risk from China," noted Gidley-Baird.
Demand from China could potentially be influenced by the recent access granted to exports from Brazil, but dramatic increases are not expected in the short term. Meanwhile, the retail price of beef in China has remained stable, while other meats have seen declines, due to tight supplies.
Beef production in Australia continues to be strong, with exports at record levels, particularly to the US, while the strong US dollar has also been benefiting other beef exporting nations such as Canada, Mexico and New Zealand.
Cattle slaughter numbers in Australia were up 5% in the first four months of the year, compared to 2014, and could reach 9.5 million head by the year-end. Higher production has also resulted in a 9.6% increase in exports, for the first five months of this year.
Looking ahead, Brazil which has been working to gain access to a number of countries, has just announced the opening of the US market for fresh beef. However, lower supplies of finished cattle, due to drought, are pushing up prices in the country, with Brazilian beef supply not expected to recover and grow until 2016, according to Rabobank.
In the EU, prime beef prices have come under pressure in Q2 after increasing towards the end of Q1. However, strong global demand and high prices, together with the depreciation of the euro against the US dollar, have resulted in strong export growth, with 133,000 tonnes cwe expected in Q1 – up 18.3% year-on-year. The EU beef market is expected to stabilise in the second half of 2015, with declines in production in the UK (-2%) and Ireland (-7%) looking to be offset by increases in the Netherlands (+7%), France (+5%) and Italy (+3%).
