Which countries import buffalo meat from India

Prices in the downtrend

BRUSSELS │WASHINGTON EU Commission forecasts falling generation and consumption for 2020 and 2021. The USDA sees the global market on normalization course in 2021.

The beef market in the European Union entered a negative trend in 2019, which is currently being exacerbated by the consequences of the corona pandemic. The EU Commission's autumn forecast for the current and the coming year is correspondingly cautious. With declining cattle herds and lower live exports from the Community, the Brussels analysts expect the beef volume to fall by around 100,000 t or 1.4 percent to 6.88 million t in 2020 compared to the previous year.

It is assumed that the number of slaughters will increase slightly in the second half of the year compared to the same period of the previous year, but this cannot yet be read from the data published so far for July and August. In the first half of 2020, EU beef production fell by 2.4 percent. In addition to Covid-19, the Commission also blames the drought in some Member States for the decrease, which is why some producers brought animals with lower weights to the slaughterhouse ahead of time. A further decline in beef production by around 100,000 t or 1.5 percent is forecast for 2021, which is explained by the fact that the herds of cattle have been reduced. In particular, the livestock owners in Germany, France, Austria and Romania had reduced their stocks in the spring.
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On the sales side, due to the restriction of public life and the temporary closure of out-of-home restaurants in 2020, a year-on-year decline in consumption of around 2 percent is to be expected; the average per capita consumption of beef by EU citizens is expected to fall by 200 g to 10.4 kg. However, the forecast was made before the second corona wave and the renewed lockdowns, so that the actual decrease in consumption could be even greater. For the coming year, the Brussels experts expect a further decrease in intra-Community beef consumption by 100 g to an average of 10.3 kg per capita.

EU beef imports collapse

The lower demand for beef in times of the Corona crisis is also clearly noticeable in the lower EU imports from third countries. From January to August 2020 these were 15 percent in the red compared to the same period of the previous year; According to the commission, imports for the year as a whole are expected to be 10 percent below the 2019 level at 348,000 t. The decline is not only due to Corona, however, because important suppliers such as Brazil have increasingly sold to customers in China, and suppliers such as Australia only had a very limited export range due to the drought.

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The corona pandemic is apparently less noticeable in EU beef exports. In 2020 - without taking into account trade with the United Kingdom - these are expected to be 582,000 t, even slightly above the previous year's level. However, although the old rules of the internal market still apply, Brexit has already led to reduced trading activities this year. In the first eight months of 2020, exports from the 27 EU member states to Great Britain fell by around 13 percent compared to the corresponding period of the previous year. Imports from the island fell by around 25 percent, partly because British exporters increasingly delivered to China. For 2021, the Commission assumes that EU beef exports to third countries will fall by 4.0 percent to 559,000 t due to the decline in production.
For cattle farmers in the EU, the weak beef market has resulted in lower producer prices. In October, the normal price fixing failed to materialize for young bulls and the revenues were still below those of previous years. Before January to the end of October, an average of EUR 353.04 / 100 kg slaughter weight (SG) was paid in the 27 Member States for animals in the R3 class; that was 2.0 percent less than in the same period of the previous year and 7.1 percent less than the average in the first ten months of 2018. The situation is very similar with the producer prices for heifers and cows for slaughter. If the drought-related increase in feed costs and the price for purchased beef cattle are deducted from the proceeds of a sold slaughter bull, then, according to the EU Commission, 55.71 euros / 100 kg SG are left in September to cover all other costs. That was one of the lowest values ​​in many years, and since January 2020 this margin has been steady and in some cases well below the long-term mean.
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Cattle prices in other important producer countries, including Brazil, Argentina and the USA, have also come under great pressure from the corona pandemic. They were able to consolidate again in the past few months, but without reaching the previous year's level.

Growing global generation in 2021

The US Department of Agriculture (USDA) also issued a forecast for the world beef market in October. As with the EU Commission, it is assumed that the negative consequences of the Corona crisis will subside in 2021 and that the economic situation and demand will normalize again. This should mean that global beef production in the main production countries considered by the USDA will increase again by 1.7 percent to 61.54 million tons in 2021 after a drop of 2.0 percent this year. This is likely to be ensured primarily by increases in production in Brazil, India, China and, to a lesser extent, in the USA. For the EU, however, a production decline of around 1.0 percent is predicted. If the economic situation improves again and there is stronger demand in the food service sector, global demand is likely to increase by 1.4 percent compared to 2020, according to the Washington analysts, and thus even exceed the pre-Corona level of 2019. This would create good sales opportunities for beef exporters, as global imports are likely to rise to a new record, the USDA stated.

China is a record importer

China has developed into the world's most important beef importer in recent years. Rising incomes, changed eating habits and, last but not least, the additional protein requirement due to the breakdown of own pig production due to African swine fever (ASF) led to a tripling of imports to 2.75 million t between 2017 and 2020. China's import demand is also expected to grow in the coming year, but with a forecast decline of 3.6 percent to 2.85 million tons, it will no longer be as strong as before. According to the USDA, Brazil is one of the exporters with good sales prospects. The exporters there could expand their international beef sales after a plus of a good 10 percent this year due to the higher production in 2021 by a further 4.7 percent to 2.67 million t. India is also likely to sell significantly more buffalo meat to other countries again.

For their own country, the Washington analysts expect exports to rise again by a good six percent to 1.2 million tons in 2021 after this year's Corona dent. In Argentina and Australia, on the other hand, almost five percent less beef is likely to be available for export to international markets due to declining production.