Chinese beef importers wary of Indian buffalo meat

Updated 2017-01-20 10:02:29 Global Times

Lower quality, smuggling activities may pose impact on industry

Some Chinese beef importers are cautious about the possible removal of restrictions on buffalo imports from India, saying they lack confidence in the quality of the Indian meat compared with beef from other countries like Australia.

Domestic companies reacted on Thursday to recent media reports that China had agreed to import buffalo meat from India, stating that while the imports may be cheaper than those from Australia or Japan, the Indian meat is of lower quality.

They also said that they were skeptical that China will effectively open its market to Indian buffalo meat.

An employee at a Shandong-based beef import and processing company, who perferred to be unnamed, told the Global Times on Thursday that as the company has been seeing a large amount of orders for beef from Australia, it will soon import live cattle from Australia to meet increasing demand, he told the Global Times on Thursday.

"The beef imports from Australia and New Zealand, in addition to South America, are now the most welcome," he said, noting that demand from the end market in Shanghai, for example, grew by about 1,000 times just last year.

"We know little about India's buffalo meat, and we should look into whether our customers recognize their products before making any moves," he said.

Pan Chenjun, a senior analyst at Dutch lender Rabobank, told the Global Times that it is unlikely for the import move to happen in the near term.

"India's buffalo meat can hardly be tracked, given the way their animals are raised. Considering the Chinese government's long-time insistence on meat tracing and a ban on feed additives such as ractopamine, I don't think a lifting of the ban will come anytime soon. "

"The decentralized, primitive way of raising buffalo in India means the meat has no additives, but you will have big headache if you want to track it," Pan said.

The Indian Express reported on Monday that a top official in the Indian Ministry of Commerce said the Chinese authorities sent a quality inspection team to India earlier to examine buffalo meat facilities, and it cleared 14 abattoirs for importing meat.

The Chinese Ministry of Commerce did not comment on this report on Thursday during its press briefing.

Indian products are considered as low-end, and usually very cheap, Xu Ze, PR representative at Inner Mongolia Kerchin Cattle Industry Co, told the Global Times on Thursday. "Also, there are many smuggling activities in the meat industry, and the problems involving the Indian rupee are likely to affect the food-processing industry as well," she said.

However, Pan did not rule out the possibility that a small number of centralized Indian buffalo farms would be granted market access to China.

"But centralized buffalo raising is still very rare in India," said Pan.

Unlike beef cattle, the buffalo is raised for milk or as a beast of burden.

They are never meant for dining tables, and for that very reason, Indian buffalo meat is 20 percent to 30 percent cheaper than beef from other countries.

In terms of quality, buffalo meat cannot match beef from Australia and the U.S.

Also, buffalo meat cannot be used for hotpot, a beloved Chinese dish, and it is only capable for deep processing such as dried beef products.

In Rabobank's global animal protein outlook for 2017, the bank expected the Chinese beef market to remain weak in 2017, as income growth slows and beef prices are still high.

However, the bank said different niche markets will react differently with middle- to high-income groups maintaining steady growth and the mass market continuing to be elastic when it comes to price.

China's beef imports will likely increase further in 2017, due to low domestic production. U.S. beef may start to be shipped to China in 2017, but the volume will take time to reach meaningful levels.

"The shipping costs from India will be more expensive," the employee at the company in Shandong said.

As his company is based in Weihai, East China's Shandong Province, the distance from India is also longer than that from Australia, he noted.

Still, it might be an opportunity for Chinese importers, he added.

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