Required Report - public distribution

**Date:** 7/30/2004

**GAIN Report Number:** IN4078

IN4078

**India**

**Livestock and Products**

**Annual**

**2004**

**Approved by:**

![](media/image1.wmf)Chad R. Russell

U.S. Embassy, New Delhi

**Prepared by:**

V. Shunmugam

**Report Highlights:**

India's CY 2005 beef exports are forecast to reach 625,000 tons (CWE).
Increasing investments in meat processing capacities, efforts by
exporters to improve the quality of meat through the introduction of
feedlots, and extension efforts by the private sector are expected to
propel Indian beef exports to new heights, both in terms of quantity and
unit values.

Includes PSD Changes: Yes

Includes Trade Matrix: No

Annual Report

New Delhi \[IN1\]

\[IN\]

**Table of Contents**

[SECTION I - SITUATION AND OUTLOOK
3](#section-i---situation-and-outlook)

[Production 3](#production)

[Consumption 3](#consumption)

[Production Policy 3](#production-policy)

[Trade 4](#trade)

[SECTION II -- STATISTICAL TABLES 6](#section-ii-statistical-tables)

[Table 1: Commodity, Meat, Beef, and Veal, PSD
6](#table-1-commodity-meat-beef-and-veal-psd)

[Table 2: Commodity, Meat, Beef and Veal, PSD (Numbers)
7](#table-2-commodity-meat-beef-and-veal-psd-numbers)

#   {#section .unnumbered}

# SECTION I - SITUATION AND OUTLOOK

## Production 

Notwithstanding a likely drought (see GAIN report IN4075), India's
cattle population in CY 2005 is forecast to grow by one percent to 330
million head in response to higher prices for meat animals. The buffalo
population, which accounts for 51 percent of the total cattle
population, continues to grow at a higher rate than the cow population.
This is largely due to a higher fat yield in buffalo milk (which fetches
a price premium), hardiness of the animal, and a growing export demand
for its meat (carabeef). Unlike cows, there are fewer restrictions on
buffalo slaughter in most states. Although traditionally only dry or
aging buffalo were slaughtered, the fattening for slaughter of male
buffalo in feedlots is becoming popular among cattle ranchers, supported
by contractual arrangements with modern, export-oriented slaughter
houses. Raising buffalo in feedlots improves meat quality, enabling
exporters to better compete in the world beef market. Although the
slaughter of cows is banned in most states, due to religious
sensitivities, illegal slaughtering is common.

Consumption of commercially produced feed in CY 2003 is estimated at 11
million tons, out of the total 107 million tons of feed consumed by the
livestock sector. Increasing commercialization of the dairy and meat
sectors is expected to increase demand for compound feed. Nonetheless,
farm feed formulations should continue to dominate due to their lower
cost.

## Consumption

Annual per capita consumption of both beef (considered to be a poor
man's meat) and broiler meat is estimated at 1.5 kg, compared with 745
grams for sheep/lamb meat. Health awareness, the increasing
affordability and availability of poultry meat, and growing consumer
incomes are resulting in a marked shift towards poultry meat consumption
despite its higher price vis-a-vis beef, particularly among the health
conscious urban consumers. The market for chilled/frozen meat is small
in India due to inadequate cold chain facilities and a traditional
dislike for frozen meat. The current retail price of beef averages
\$1.40 per kg, compared with \$1.80 per kg for poultry meat, and \$2.90
per kg for lamb/sheep meat.

## Production Policy

Government animal husbandry programs are largely oriented towards
improving milk rather than meat production. However, these health
management programs have helped carabeef exporters maintain a
disease-free status.

In the tenth five-year plan (2002 to 2007), the government, working
closely with the World Animal Health Organization, started the process
of creating three Foot-and--Mouth Disease (FMD) free zones in five major
states in which export-oriented meat processing facilities are located.
The government's FMD program largely depends on ring patterns of
vaccination, coupled with awareness campaigns. According to sources,
such programs for FMD free zones would take a minimum of 10-15 years to
yield tangible results.

There are no direct government subsidies to Indian meat exporters;
rather, exporters have actively taken responsibility for developing the
meat sector with various kinds of outreach programs such as animal
health management, animal production, quality awareness campaigns, and
marketing. There are nine fully integrated export-oriented plants, with
a total annual processing capacity of 850,000 tons, which have
incorporated HACCP and/or ISO 9000 standards. According to trade
sources, three additional modern meat-processing plants with a total
annual capacity of 150,000 tons are being set up in the buffalo belt of
Northern India to cater to increasing export demand. Although most
meat-processing plants have their own slaughterhouses, some are
dependent on the government or municipality-managed slaughterhouses.
Besides the mandatory quality certification program, plants are
periodically inspected by the Agricultural and Processed Products Export
Development Authority (APEDA) and other concerned authorities, to ensure
that they adhere to stipulated domestic and export quality standards.

Private meat processors are actively involved in the development of
their respective animal supplies through a variety of services (e.g.,
feed distribution, artificial insemination, breeding, vaccination, and
other veterinary services) to meet the quarantine and quality
requirements stipulated by their clients. This has resulted in the
development of disease-free (Rinderpest, FMD) zones, the reduction of
the average mortality rates in calves, and increased milk productivity.

The meat-processing plants buy buffalo for around \$0.71 per kg, and are
able to sell the carabeef for \$1.20 per kg CWE.

## Trade 

Post forecasts 2005 beef exports at 625,000 tons (CWE), due to growth in
demand both from traditional markets (Malaysia, Philippines, and United
Arab Emirates) and emerging markets (West Africa and Saudi Arabia).

According to private trade sources, carabeef exports are estimated to
increase to 540,000 tons (CWE) in 2004, due mainly to increased
purchases from emerging markets in Africa. With India now emerging as a
rinderpest-free country, Saudi Arabia recently permitted carabeef
imports from India after a period of 15 years. Trade sources are
optimistic that Indian carabeef would soon go to Egypt and Iran again
after the expected resolution of sanitary issues. Exports to the UAE,
Jordan, and Kuwait increased during 2003 to cater to the increased
demand for re-exports to Iraq. The former countries of the Commonwealth
of Independent States, which recently began sourcing carabeef from India
due to the BSE problems in other countries and competitive Indian
pricing, continued to expand their imports from India in CY 2003.
Although the BSE incident in the United States had little impact on
Indian export volumes, since the markets catered by both the countries
are different, they did help Indian carabeef realize a higher export
price. Indian beef exports to West African countries are increasing, due
to the expanding demand from countries such as Congo and Gabon in
response to promotional efforts by Indian exporters. FMD still remains a
major hurdle in exploring new lucrative markets in South Africa,
Indonesia, and Russia.

Based on trade estimates, about 90 percent of Indian carabeef exports
are boneless and the rest are carcasses. Major markets for Indian
specialty beef cuts include Malaysia, Philippines, Jordan, and the UAE,
with smaller quantities exported to other Middle East and African
countries. The Philippines and Malaysia account for a major share of
beef exports in the fresh/chilled category; Malaysia, the UAE, and
Jordan are major importers of frozen meat. Most of the beef exported to
the South East Asian countries caters to the institutional demand of the
processing industry, for the production of sausages, salami, etc., due
to the water holding capacity of Indian carabeef and its good blending
properties.

India's licensing requirements due to quarantine concerns effectively
ban imports of live bovine animals. However, imports are permitted for
breeding purposes under an advance import license issued by the
Department of Animal Husbandry. Due to reported incidents of
Transmissible Spongiform Encephalopathy (TSE) diseases since August
1999, the Government of India banned imports of live cattle, buffalo,
sheep and goat, fresh meat, meat products, tissue/organs (other than
milk), and meat and bone meal of ruminant origin from countries where
OIE-reported TSE incidents occurred.

India prohibits imports of beef due to religious sensitivities.

# SECTION II -- STATISTICAL TABLES

## Table 1: Commodity, Meat, Beef, and Veal, PSD

+--------------------+----+------+----+------+---+------+-----------+
| **PSD Table**      |    |      |    |      |   |      |           |
+--------------------+----+------+----+------+---+------+-----------+
| **Country:**       | *  |      |    | 0.7  | \ |      |           |
|                    | *I |      |    |      | < |      |           |
|                    | nd |      |    |      | - |      |           |
|                    | ia |      |    |      | C |      |           |
|                    | ** |      |    |      | o |      |           |
|                    |    |      |    |      | n |      |           |
|                    |    |      |    |      | v |      |           |
|                    |    |      |    |      | e |      |           |
|                    |    |      |    |      | r |      |           |
|                    |    |      |    |      | s |      |           |
|                    |    |      |    |      | i |      |           |
|                    |    |      |    |      | o |      |           |
|                    |    |      |    |      | n |      |           |
|                    |    |      |    |      | f |      |           |
|                    |    |      |    |      | a |      |           |
|                    |    |      |    |      | c |      |           |
|                    |    |      |    |      | t |      |           |
|                    |    |      |    |      | o |      |           |
|                    |    |      |    |      | r |      |           |
|                    |    |      |    |      | f |      |           |
|                    |    |      |    |      | o |      |           |
|                    |    |      |    |      | r |      |           |
|                    |    |      |    |      | C |      |           |
|                    |    |      |    |      | W |      |           |
|                    |    |      |    |      | E |      |           |
+--------------------+----+------+----+------+---+------+-----------+
| **Commodity:**     | ## |      |    |      |   |      |           |
|                    | ## |      |    |      |   |      |           |
|                    | ## |      |    |      |   |      |           |
|                    |  M |      |    |      |   |      |           |
|                    | ea |      |    |      |   |      |           |
|                    | t, |      |    |      |   |      |           |
|                    |  B |      |    |      |   |      |           |
|                    | ee |      |    |      |   |      |           |
|                    | f  |      |    |      |   |      |           |
|                    | an |      |    |      |   |      |           |
|                    | d  |      |    |      |   |      |           |
|                    | Ve |      |    |      |   |      |           |
|                    | al |      |    |      |   |      |           |
+--------------------+----+------+----+------+---+------+-----------+
|                    |    | **20 |    | **20 |   | **20 | UOM       |
|                    |    | 03** |    | 04** |   | 05** |           |
+--------------------+----+------+----+------+---+------+-----------+
|                    | O  | New  | O  | New  | O | New  |           |
|                    | ld |      | ld |      | l |      |           |
|                    |    |      |    |      | d |      |           |
+--------------------+----+------+----+------+---+------+-----------+
| **Calendar Year    |    | **0  |    | **0  |   | **0  | (MO       |
| Begin**            |    | 1/20 |    | 1/20 |   | 1/20 | NTH/YEAR) |
|                    |    | 03** |    | 04** |   | 05** |           |
+--------------------+----+------+----+------+---+------+-----------+
| Slaughter          | 1  | 1    | 1  | 1    | 0 | 1    | (1000     |
| (Reference)        | 54 | 5450 | 63 | 6800 |   | 7500 | HEAD)     |
|                    | 50 |      | 00 |      |   |      |           |
+--------------------+----+------+----+------+---+------+-----------+
| Beginning Stocks   | 0  | 0    | 0  | 0    | 0 | 0    | (1000 MT  |
|                    |    |      |    |      |   |      | CWE)      |
+--------------------+----+------+----+------+---+------+-----------+
| Production         | 19 | 1960 | 20 | 2130 | 0 | 2230 | (1000 MT  |
|                    | 60 |      | 70 |      |   |      | CWE)      |
+--------------------+----+------+----+------+---+------+-----------+
| Intra EC Imports   | 0  | 0    | 0  | 0    | 0 | 0    | (1000 MT  |
|                    |    |      |    |      |   |      | CWE)      |
+--------------------+----+------+----+------+---+------+-----------+
| Other Imports      | 0  | 0    | 0  | 0    | 0 | 0    | (1000 MT  |
|                    |    |      |    |      |   |      | CWE)      |
+--------------------+----+------+----+------+---+------+-----------+
| TOTAL Imports      | 0  | 0    | 0  | 0    | 0 | 0    | (1000 MT  |
|                    |    |      |    |      |   |      | CWE)      |
+--------------------+----+------+----+------+---+------+-----------+
| **TOTAL SUPPLY**   | 19 | 1960 | 20 | 2130 | 0 | 2230 | (1000 MT  |
|                    | 60 |      | 70 |      |   |      | CWE)      |
+--------------------+----+------+----+------+---+------+-----------+
| Intra EC Exports   | 0  | 0    | 0  | 0    | 0 | 0    | (1000 MT  |
|                    |    |      |    |      |   |      | CWE)      |
+--------------------+----+------+----+------+---+------+-----------+
| Other Exports      | 4  | 465  | 5  | 540  | 0 | 625  | (1000 MT  |
|                    | 65 |      | 20 |      |   |      | CWE)      |
+--------------------+----+------+----+------+---+------+-----------+
| TOTAL Exports      | 4  | 465  | 5  | 540  | 0 | 625  | (1000 MT  |
|                    | 65 |      | 20 |      |   |      | CWE)      |
+--------------------+----+------+----+------+---+------+-----------+
| Human Dom.         | 14 | 1495 | 15 | 1590 | 0 | 1605 | (1000 MT  |
| Consumption        | 95 |      | 50 |      |   |      | CWE)      |
+--------------------+----+------+----+------+---+------+-----------+
| Other Use, Losses  | 0  | 0    | 0  | 0    | 0 | 0    | (1000 MT  |
|                    |    |      |    |      |   |      | CWE)      |
+--------------------+----+------+----+------+---+------+-----------+
| TOTAL Dom.         | 14 | 1495 | 15 | 1590 | 0 | 1605 | (1000 MT  |
| Consumption        | 95 |      | 50 |      |   |      | CWE)      |
+--------------------+----+------+----+------+---+------+-----------+
| Ending Stocks      | 0  | 0    | 0  | 0    | 0 | 0    | (1000 MT  |
|                    |    |      |    |      |   |      | CWE)      |
+--------------------+----+------+----+------+---+------+-----------+
| **TOTAL            | 19 | **19 | 20 | **21 | 0 | **22 | (1000 MT  |
| DISTRIBUTION**     | 60 | 60** | 70 | 30** |   | 30** | CWE)      |
+--------------------+----+------+----+------+---+------+-----------+
| Calendar Yr. Imp.  | 0  | 0    | 0  | 0    | 0 | 0    | (1000 MT  |
| from U.S.          |    |      |    |      |   |      | CWE)      |
+--------------------+----+------+----+------+---+------+-----------+
| Calendar Yr. Exp.  | 0  | 0    | 0  | 0    | 0 | 0    | (1000 MT  |
| to U.S.            |    |      |    |      |   |      | CWE)      |
+--------------------+----+------+----+------+---+------+-----------+

## Table 2: Commodity, Meat, Beef and Veal, PSD (Numbers)

  --------------------- --------- ------------- -------- ------------- ----- ------------- --------------
  **PSD Table**                                                                            

  **Country:**          India                                                              

  **Commodity:**        **Meat,                                                            
                        Beef and                                                           
                        Veal**                                                             

                                  **2003**               **2004**            **2005**      UOM

                        Old       New           Old      New           Old   New           

  **Calendar Year                 **01/2003**            **01/2004**         **01/2005**   (MONTH/YEAR)
  Begin**                                                                                  

  Total Cattle Beg.     323000    323000        327250   327250        0     330250        (1000 HEAD)
  Stks                                                                                     

  Dairy Cows Beg.       135000    135000        136300   136300        0     137000        (1000 HEAD)
  Stocks                                                                                   

  Beef Cows Beg. Stocks 0         0             0        0             0     0             (1000 HEAD)

  Production (Calf      46200     46200         47500    47500         0     48500         (1000 HEAD)
  Crop)                                                                                    

  Intra EC Imports      0         0             0        0             0     0             (1000 HEAD)

  Other Imports         0         0             0        0             0     0             (1000 HEAD)

  TOTAL Imports         0         0             0        0             0     0             (1000 HEAD)

  **TOTAL SUPPLY**      369200    **369200**    374750   **374750**    0     **378750**    (1000 HEAD)

  Intra EC Exports      0         0             0        0             0     0             (1000 HEAD)

  Other Exports         0         0             0        0             0     0             (1000 HEAD)

  TOTAL Exports         0         0             0        0             0     0             (1000 HEAD)

  Cow Slaughter         1350      1350          1200     1200          0     1100          (1000 HEAD)

  Calf Slaughter        3200      3200          3500     3500          0     3700          (1000 HEAD)

  Other Slaughter       15450     15450         16300    16800         0     17500         (1000 HEAD)

  Total Slaughter       20000     20000         21000    21500         0     22300         (1000 HEAD)

  Loss                  21950     21950         25500    23000         0     24250         (1000 HEAD)

  Ending Inventories    327250    327250        328250   330250        0     332200        (1000 HEAD)

  **TOTAL               369200    **369200**    374750   **374750**    0     **378750**    (1000 HEAD)
  DISTRIBUTION**                                                                           

  Calendar Yr. Imp.     0         0             0        0             0     0             (1000 MT CWE)
  from U.S.                                                                                

  Calendar Yr. Exp. to  0         0             0        0             0     0             (1000 MT CWE)
  U.S.                                                                                     
  --------------------- --------- ------------- -------- ------------- ----- ------------- --------------