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New Delhi, Oct 12, 2016, (PTI):

The rise of nationalistic Hindu sentiment notwithstanding, India’s beef sector will continue to be one of the country’s bright spots of agribusiness and will continue to lead the global beef trade in volume, according to Fitch group firm BMI Research.

"India specialises in the production of cheap and abundant buffalo meat and will continue to lead the global beef trade in volume, amidst increasing demand for inexpensive meat in Asia and the Middle East," BMI Research said in a report.

However, India’s reliance on illegal trade routes to China makes the sector vulnerable to a potential crackdown on smuggling, it added.

The report noted that after more than a year since the implementation of a ban of cow slaughter and consumption in the Indian state of Maharashtra on growing opposition to cow meat nationally, the country’s beef sector remains one of the faster growing agribusiness markets.

"India’s beef sector will continue to be one of the country’s agribusiness bright spots despite the rise of nationalistic Hindu sentiment," it said.

Low local consumption of beef has also allowed the country to record very large exportable surpluses, as only 50 per cent of production is consumed locally, compared with 80 per cent in Brazil, according to the report.

"We forecast beef meat production to grow at a steady 4 per cent annually over 2016-2020, to reach 5.1 million tonnes at the end of that period," BMI Research said in the paper.

India, which overtook Brazil as the world’s largest beef exporter in 2014, will maintain a head start over its competitors in terms of exportable supply in the coming years as the country will record a surplus of 2.2 million tonnes on average over 2016-2020, compared with 2 million tonnes for Brazil and 1.5 million tonnes for Australia, the report said.

Looking ahead, beef production growth will be mainly driven by the domestic growth in the dairy sector and by steady demand in the international market, BMI Research said.

The paper highlighted that a significant part of India’s beef trade is done through illegal channels, as live cattle is exported to Bangladesh (prohibited by the Indian government) and frozen meat reaches China via Vietnam (which is prohibited by China).

Therefore, it said, India’s beef market is at a high risk of a change in trade regulation or a crackdown on illegal trade. In particular, China could seal the fate of India’s exports; exports to Chinese markets would boom should the 2013 Memorandum of Understanding over beef trade between the two countries be finally enacted after years of negotiations.

The paper observed that although the national outlook is enticing, some individual states will fall behind in terms of beef production in the coming years, mainly due to cultural factors and local politics.

Several India states mainly controlled by the BJP and large producers of beef meat, including Maharashtra and Haryana strengthened the legislation against cattle slaughter to include all types of cattle (male, female, at all age).