Pedestrian walk past a shop selling beef in Kolkata. India has banned the slaughter of its cattle.
LUCY CRAYMER, VIBHUTI AGARWAL
The Wall Street Journal
12:00AM June 5, 2017
India’s move to ban the slaughter of its cattle has sent global beef prices higher in recent days, amid concerns of reduced supply from the world’s biggest exporter of the meat by volume.
India’s government last week decided to ban the sale of cattle — which include cows and buffalo — for slaughter at livestock markets. The government said the order was aimed at preventing uncontrolled and unregulated animal trade. The decision applies throughout the country, effectively cutting off the supply of meat for processors, challenging an industry that exports roughly $US4 billion ($5.4bn) worth of beef annually, according to official data.
The rules are being challenged in courts by several state governments, and could take many weeks to take full effect, but some investors are already betting that worldwide beef supply could become tighter.
On Friday, the Australian Eastern Young Cattle Indicator — the benchmark for Australian cattle prices — ended up nearly 0.8 per cent. In the US, live cattle futures on the Chicago Mercantile Exchange soared to their upper limit, rising 2.5 per cent, with the India ban contributing to the price gains, analysts said.
“There has been a lot of market chatter around this and the Australian market has been bid up particularly,” said Tobin Gorey, a Commonwealth Bank of Australia analyst.
Cattle prices have started to recover in recent months as global supplies have tightened with increasing beef consumption. However, prices are still well below historic highs as US production remains strong, and Australian cattle numbers have started to recover following recent droughts.
Analysts are unclear on the extent of the global impact should India’s beef exports end. The issue is complicated by the fact that exported Indian beef — largely sourced from water buffalo — is a low-end product so it often doesn’t compete directly with products from other major exporters such as the US, Australia and Brazil.
If consumers couldn’t get the cheap Indian beef, they might substitute it for cheaper protein such as pork and poultry, said Angus Gidley-Baird, an agricultural analyst at Rabobank in Australia.
India is predominantly of the Hindu religion and much of the population doesn’t eat meat from cows, which is considered holy, while the export of cow beef is banned. However, this doesn’t extend to the country’s extensive water buffalo population, although many Hindus don’t eat buffalo, either.
In recent years, many states have taken an increasingly strong stance on the killing of all cattle, which is currently banned in 18 of India’s 29 states. However, in predominantly beef-consuming states, such as Kerala, West Bengal, and Meghalaya, the business has thrived.
While buffalo aren’t revered they have been included in the bans in an effort for the new rules to fit within an animal welfare agenda rather than a religious one, government critics have said.
India’s Environment Minister Harsh Vardhan has refuted those assertions. The revised rules “are meant to regulate the animal market and strengthen the movement for the prevention of cruelty to animals”, he said. “There is nothing else in this.”
Supply of cattle being sold at markets has already slumped as cattle traders and farmers have been scared off by hardline Hindu protesters, according to trade groups representing India’s meat industry.
“Millions of people are going to be unemployed” as a result of these new rules, said Abdul Faheem Qureshi, head of the Muslim All India Jamiatul Quresh Action Committee, which represents the cause of meat-sellers and is challenging the new rules in India’s Supreme Court.
He noted that the revised rules won’t just hit the meat-processing sector, but also industries such as leather. Some estimates by traders and industry experts suggest at least two million, mostly Muslims, being out of a job as a result of the ban. “How will we feed our children?” said Mohammad Mushtaq Ahmad, who has traditionally slaughtered cattle and sold the meat for export. He owns five meat shops in the Nizamuddin area in New Delhi.
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