ANALYSIS - Indian buffalo could be the cheap answer to the global demand for bovine meat.
With tight cattle supplies globally, the stream of buffalo meat coming out of India to feed the demand in the Middle East and North Africa and in parts of South East Asia is helping to ease the situation according to market analyst Richard Brown from Gira (pictured).
Speaking at the recent World Meat Congress, Mr Brown said that the tight supplies have been produced by a mixture of drought and high feed prices in the US in 2012.
The fall in US production and rise in prices has had an impact on other markets around the world.
In Europe, beef production has also fallen because of a reduction in the dairy herd caused by the quota system for milk, as much of European beef production is connected to milk and dairy production.
The quota system introduced in 1984 has seen a reduction in the dairy herd, but the situation could change in future years as the quotas are ended next year.
Production in Australia has also been hit by drought and while Brazil has a beef herd of about 180 million head, productivity is below that of the US.
Global production has also been affected by several other factors including ethical and political interventions.
The scandal over horse meat found in beef products, free trade agreements and concerns over BSE and the use of antibiotics, and growth promoters such as Zilmax have all influenced the market triggering tight supplies and fall in consumption because of consumer concerns.
This is all against a backdrop of an improving economic situation in Europe and the US.
While consumption is also falling in regions such as the US and Europe, demand is growing in developing nations such as China and much of the Indian buffalo beef is finding its way to China through countries such as Viet Nam, according Mr Brown.
He said that the production of buffalo beef in India is gently rising reaching 1.8 million tonnes and this bovine meat is being channelled into the export market.
However, Mr Brown also questioned whether this continued growth is sustainable despite the large quantities of buffalo available in India.
While the meat is relatively cheap, prices are rising driven by the demand in China.
Mr Brown forecast good prospects for the global beef sector despite the problems recent difficulties in the US, Europe and Australia as worldwide consumers are spending more on beef and feed prices are falling and with the end of the milk quota system in Europe and improving weather conditions supplies are expected to rise.