Buffalo meat exports grind to a halt in three key markets over coronavirus

Shipments made recently stuck in ports, causing huge demurrage payouts; Exporters fear payment defaults running into millions of dollars

Buffalo meat exports have come to standstill after Malaysia, Vietnam and Turkey, the three major destinations of India’s shipments, stopped placing any orders. This is the worst-ever crisis for exporters of animal meat and casing following coronavirus (Covid-19) pandemic there. Buffalo meat has been largest export item in agro-commodity basket since 2013-14.

Since the coronavirus outbreak was detected January in China, Indian exporters have received no fresh orders from Asian and middle-eastern countries, which cumulatively account for nearly 65 per cent of India’s total buffalo meat shipments, directly or indirectly. With coronavirus gradually spilling over to China’s trade partner nations and spreading to over 100 countries, buffalo meat exports have come to a standstill.
 

Many consignments shipped to countries such as Hong Kong, Vietnam and Malaysia ahead of the New Year celebrations in China on January 25, 2020, are still stuck at ports due to a lockdown there. Those who had already shipped their consignments before the Chinese New Year are still waiting to be paid by importers. Exporters fear the defaults may run into of millions of dollars and create business hurdles in future.
 

Trade with Malaysia and Turkey were also hit due to their anti-India stand on abrogation of Article 370 and 35A in Jammu & Kashmir, following India’s strong condemnation to their comments and trade restrictions thereafter.

“There have been absolutely no orders since coronavirus outbreak in China. Tonnes of exported buffalo meat await clearances at various ports. Receivables worth millions of dollars are still pending due to lockdown abroad. We are trying to convince the local authorities at importing countries to clear the consignments and deposit goods in cold storages there,” said Soeb Khan, managing partner, Fresh N Frozen Tech, a Hyderabad-based manufacturer and merchant of buffalo meat.

The delay in clearing consignments at foreign ports has resulted in massive demurrage being paid over and above container and freight charges.

“Additional payment of demurrage is causing a huge burden on buffalo meat exporters,” said Khan.

Data compiled by the Agricultural and Processed Foods Export Development Authority (Apeda) showed India’s buffalo meat exports declined by 8 per cent in value terms to $2.8 billion between April 2019 and January 2020 compared with $3.05 billion in the corresponding period last year. In quantity term, however, the decline was a mere 2.4 per cent to 1 million tonnes for the period between April 2019 and January 2020 as against 1.03 million tonnes reported in the comparable period last year.

Of this, Vietnam alone contributes 36 per cent, followed by Malaysia (10.7 per cent) and Turkey (10.4 per cent). Trade sources believe that consignments meant for exports to Hong Kong and Vietnam are forwarded to China for consumption there.

“There is no respite for India’s buffalo meat exporters in the visible future due to widening spread of coronavirus,” said Qureshi Shakir Hussain, Director, Al-Quresh Exports, a city-based manufacturer and merchant of buffalo meat.

Meanwhile, exporters fear buffalo stocks have been piling up in slaughterhouses. Weak demand from overseas has resulted into a sharp fall in realisation.

Hussain said buffalo meat demand would rise once this transition period gets over, and would revive overall export sentiment possibly within three months.

However, going by the inquiries and steps that China is taking to steps to decongest ports, Fauzan Alavi, Vice President for All India Meat and Livestock Exporters Association said, “Off late, some inquiries are coming from China and even Indonesia, which is good sign and we are sure that in 2-3 weeks’ time things should settle down.”

Experts, however, ruled out possibility of Covid-19 spread through buffalo meat consumption and advise that it should be cooked well before consumption.