India's coronavirus lockdown curbs buffalo meat exports, hitting Ramadan supplies

For more than a decade Kuala Lumpur street vendor Abu Zahrim Ismail has seen brisk sales of daging dendeng, a spicy buffalo meat jerky, during the Muslim holy month of Ramadan.

But this year, the spread of coronavirus pandemic has slashed shipments of Indian buffalo meat, driving prices higher and hitting sales.

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Most meat processing plants in India, the world's second-largest beef exporter and Malaysia's top supplier have been shut as the South Asian nation fights to contain the pandemic.

“The virus has really turned everything upside down,” Abu said.

India typically sells more than 100,000 tonnes of buffalo meat every month, but in March exports dropped to around 40,000 tonnes, according to two exporters.

Sales are likely to have been even lower in April as widespread lockdowns took effect, and even in May are expected to remain well below normal despite some parts of the Indian economy re-opening, they added.

"Right now things are not going in favour of our industry. Even though it is food, it is not considered essential as it is for exports," said one of the exporters who is based in northern state of Uttar Pradesh.

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"As of now all the exporters are trying to move their current stocks that they are holding."

Wholesale prices of frozen buffalo meat in Malaysia have climbed 15%-20% from a year ago this month during the Ramadan festival, which usually accounts for up to 20% of the country's annual consumption as families gather to break fast.

"Typically, Malaysians would consume about 350 containers of buffalo meat a month from India, now it has fallen to half," said one importer based in Kuala Lumpur.

Diminished retail demand during Malaysia's own lockdown has also hit overall meat import demand.

“We are only open for takeaway during the movement control order. Sales have dropped about 80%,” said Indian Muslim Restaurant Operators Association (Presma) president Ayub Khan.

GLOBAL MEAT MESS

In 2019, India shipped close to 1.5 million tonnes of beef, which is sourced largely from dairy buffalos, compared with 2.3 million tonnes sold by top supplier Brazil, according to the U.S. Department of Agriculture.

The absence of those supplies is being acutely felt in Malaysia, which relies on India for 70% of beef imports, as well as in Indonesia where a quarter of imports come from India and buffalo is popular among lower-income groups due to its low cost.

Indonesian buyers - which were expected to buy 170,000 tonnes of Indian beef this year before virus-led delays kicked in - are trying to switch to other origins like Brazil and Argentina, industry sources in Jakarta said.

But the global Covid 19 pandemic has made replacing those lost supplies difficult, especially after the world's biggest meat companies, including Smithfield Foods Inc, Cargill Inc, JBS USA and Tyson, halted operations at about 20 slaughterhouses and processing plants in North America after workers fell ill.

Number one beef exporter Brazil has also been hit, with meat processor BRF registering 18 COVID-19 cases in late April at an industrial hub that employs about 3,100 people.

RESTRAINED REBOOT

Indian meat processors are keen to restart plants once restrictions are eased, but enduring social distancing measures mean it will not be easy to source animals in the usual way.

Dairy cattle in India are sent for slaughter after they have passed their productive prime, with agents from meat plants typically going house-to-house to buy up animals that are then trucked to abattoirs.

Animal markets - banned or greatly restricted in scale under lockdown - are also a key source.

"Questions remain over how quickly raw material can be procured and processed following all rules of social distancing," an official at All India Meat & Livestock Exporters Association, told Reuters.

Exporters, importers and association officials were not willing to be named because of the sensitivity over food supplies.

The net effect of disrupted supplies from India will mean lower overall meat imports into cost-sensitive markets around Asia, said J.Y. Chow, food and agriculture expert at Mizuho Bank in Singapore.

"The supply is getting disrupted, so any substitute will need to be sourced from an upgrade, and it will thus erode volume demand. No other country sells buffalo meat in the volumes that India does."