India the World's Biggest Exporter of Bovine Meat
By Roman Grynberg
GLOBAL trade produces some of the most intriguing and often unexpected results. But they are only strange if you do not understand the details of the particular commodity.
For example, Germany is the world’s biggest exporter of green coffee, and it does so without a coffee plant for 5 000 kilometres in any direction from Frankfurt. Germany exports more green coffee than all of Africa put together. Botswana exports boats from Maun in the Kalahari Desert, and India regularly exports four times as much Darjeeling tea as its 87 registered plantations produces.
But perhaps the oddest outcome I have seen in international trade is the fact that largely Hindu and vegetarian India is now the world’s biggest exporter of bovine meat, surpassing Australia, the USA and Brazil. In 2015, India exported some two million tonnes of bovine meat, and yet the country has had endemic foot-and-mouth disease (FMD), which has played havoc with African exporters and confined many of them to local markets.
Germany exports more coffee than all of Africa put together because of its superb logistics to other countries in Europe.
German transnational companies dominate the European trade in the beans used for making Espresso. But coffee beans have a limited shelf life, and therefore they must be moved quickly to their final consumer. Germany is well positioned to do this.
Until Africa improves its logistics hubs, beneficiation of coffee will remain just a dream. Botswana exports aluminum boats to Mozambique and occasionally to Namibia from the Kalahari because the country has developed expertise in boats that manage hippos, crocodiles and logs on the Okavango River.
Mozambique, Africa’s biggest producer of aluminum, makes no boats, and does not even export the aluminum to Botswana – that comes from South Africa.
South African boats are made of fibreglass and are meant for rich people to play with on the beach, and have little hope of surviving a collision with an unhappy hippo on one of Africa’s rivers.
The reason why four times more Darjeeling tea is exported from India than the country produces is simple. This is normally called commercial fraud. India also exports bovine meat, but not beef. The export is principally of buffalo meat, which has a huge chunk of the bottom end of the meat market in Asia and the Middle East.
It is particularly popular in countries like Vietnam and the Gulf states, which is not surprising, given that the cost of deboned buffalo is US$3 per kilo in 2016, far below that of imported Australian beef, which exports for about US$4,40 per kilo. That a largely vegetarian country like India, which reveres cows, is the world’s biggest exporter of bovine meat is, like German coffee and Botswana boats, not as surprising as it first seems.
The fact that most Indians are vegetarians creates a far bigger exportable surplus than would otherwise be the case and moreover, buffalos are not revered like cows among Hindus in India. Buffalo are needed as a very important part of India’s huge dairy industry, and so being the world’s largest exporter of buffalo meat should not be surprising.
What really is truly surprising from an African perspective is the fact that India has endemic FMD, and yet is still the world’s biggest exporter of bovine meat. From the perspective of the Ethiopian and Ugandan cattle herder as well as from Namibia and Botswana’s relatively developed cattle industry, this sounds very strange indeed.
If you have FMD in your area, the European Union and the US, our two main markets, simply block your exports. The EU in particular imposes absurd obligations on beef from Botswana and Namibia. Not only does the beef have to be certified as coming from FMD-free areas, but it also has to be deboned to be double sure that it is FMD-free.
Countries like Ethiopia and Uganda, where there is little effective management of FMD, are completely blocked from international trade. If you want to know just how damaging it is to be excluded from international trade in beef, then ask the cattle farmers of the Zambezi region in Namibia or in Ngamiland in Botswana.
There are perfectly legal ways of getting around the existence of FMD as a block to international trade, but these are not being used in Africa. It is called commodity based trade which, under the terms of the World Organisation for Animal Health code, allows countries to export bovine beef from FMD areas as long as it is deboned, matured and has an appropriate PH level, and the cattle do not actually have FMD.
All this is well known and used by the Indians to develop export markets for its surplus buffalo meat. Namibia has been developing an extensive programme in the Zambezi region. Botswana has done virtually nothing.
The Chinese, hot on the heels of the Europeans and Americans, have taken issue with India’s endemic FMD, and in 2014 they blocked exports of Indian buffalo meat, but given their preference for cheap meat, the Chinese have had no qualms about importing it from Vietnam, which in turn brings in the meat from India.
This so-called ‘grey market’ trade continues to be mutually beneficial, and the Chinese have done nothing to stop it, but India has implied that if the block is continued, it might consider taking the matter to the World Trade Organisation (WTO).
A WTO dispute on the Chinese regulations would be extremely valuable to Africa as it would clarify the legality of the rules used by China and the EU.
There is nothing stopping African countries from developing their own protocol on commodity based trade from FMD areas, but they will not do so because those with developed industries such as Botswana, Namibia and South Africa desperately fear the implications of allowing exports from the massive herds of Ethiopia and Uganda, let alone buffalo meat from India, and hence prefer to deal with the EU FMD measures.
Commodity based trade, if it is to succeed and create a pan-African beef market, will need to deal with the relative lack of competitiveness of the southern African industry.
– These are the views of professor Roman Grynberg, and not necessarily of Unam, where he is employed.