Asia's exports of foods are gaining momentum, with growth of 12% per year between 2009 and 2013, outpacing the world average rate of 9%. Four Asian countries were ranked among the world's top 15 food exporters in 2013. Shipments are growing especially quickly from China, rising 15%, and the Philippines, up 17%, according to data from Trade Map, a service of the International Trade Centre. an affiliate of Unctad and the WTO.
An Indian farmer leads his buffalo herd through a flooded paddy field on the outskirts of Bhubaneswar.
The fastest growth belongs to India, which recorded 26% growth during the four-year period, far higher than any other major food exporter. India has now leapfrogged Thailand to become Asia's fourth largest food exporting country.
How did India do it? The simple answer is cattle and buffalo. Until the mid-2000s, seafood, including shrimp and fish, was India's main food export. But bovine meat now ranks higher, thanks in part to government policy to develop livestock farming. India is home to the world's largest population of cattle and buffalo, with some 315 million animals.
Of course, most Indians venerate cows and abstain from consuming beef for religious reasons. In many jurisdictions, local laws prohibit the slaughter of cows, but not bulls or buffalo, a related but distinct species. The result is that exports of bovine meat grew by almost 50% per year between 2009 and 2013, accounting for $4.4 billion worth of exports in 2013.
Remarkably, India is likely to become the world's leading exporter of bovine meat in 2014. Last year it ranked behind only Brazil. Its rise has come quickly. In 2004, India accounted for only 5% of the world's bovine meat exports; the figure now stands at 21%.
Asia's rising demand is driving India's meat exports, fuelled by growth of the region's middle classes. As incomes rise, so does consumption of meat. After all, a diet rich in meat is associated with education, affluence and status — and some people just like the taste. Either way, per capita meat consumption has more than doubled on a worldwide basis during the past 50 years. Per capita consumption growth, coupled with world population growth, has increased total demand for meat five-fold.
China's appetite for meat has become especially huge, thanks to the emergence of its large middle class. In the late 1970s, China's annual meat consumption was one-third that of the United States. Now it is more than double.
Chinese diners regard beef as a prestige meat that is higher in quality, healthier and lower in fat than pork, which has traditionally been the local favourite. Demand for beef has also been driven by numerous food safety scandals and disease outbreaks involving pork and poultry. But China's headcount of cattle stands at just 75 million, which is insufficient to meet demand. Imports of frozen beef have increased by 140% per year since 2009, reaching $1.2 billion in value in 2013.
India, with its large supply of cattle and buffalo, might seem a logical place for China to buy meat. But in fact, Australia dominates China's beef import market. India supplies just $2 million of bovine meat to China each year on average, the vast majority of which is from buffalo meat.
As for Thailand, the country exports only $20 million worth of frozen bovine meat per year. Thailand's meat export specialties are pork and poultry, for which global import demand is three times that of beef.
Rising world demand leaves plenty of room for Thailand's pork and poultry producers to grow. They can increase exports or set up farms and production plants in meat-importing countries. The Philippines is an example of such a market, which many Thai agribusiness players are clamouring to enter.
In South America, several countries also offer opportunities. Venezuela, for example, is the world's 16th largest importer of poultry, with import demand growing by more than 40% per year since 2009.
Players in Asia's food industry need to stay alert to changes in global consumer preferences. With new market opportunities now emerging around the world, more and more Asian agribusinesses can benefit from exporting.
EIC, a unit of Siam Commercial Bank Public Company Limited, offers in-depth macroeconomic outlook and sectoral impact analyses. For more information, please visit www.scbeic.com or contact eic@scb.co.th
