Mumbai: Investors, brokers and industries may be rooting for the Bharatiya Janata Party (BJP) in the upcoming Lok Sabha elections, but traders in the beef market fear a victory for the right-wing political party could hit their booming business.

Exports of Indian beef are expected to rise to a record 1.8 million tonnes in 2013-14, accounting for about 20% of world trade in the commodity. Exports, which hit 17,500 crore in value last year, have risen 102% over the last three years as demand for Indian beef in the international markets has surged.

To be sure, Indian traders, like local restaurants, make the distinction that much of this is what they term “buff" or buffalo meet and not beef.

It’s a distinction that isn’t made internationally, but it is one that could well make sense in India where the cow is considered holy and the buffalo dirty.

According to the department of animal husbandry, dairying and fisheries of ministry of agricultural in the government of India, slaughter of cows is prohibited in most states, although some allow this conditionally. Most states allow the slaughter of bulls, bullocks and buffaloes, again, under certain conditions.

States have to decide whether or not to allow the slaughter of cows and the trading of beef and “buff" but the central government still has a role to play, largely in terms of the support extended to the industry. “If the BJP comes to power, support to the meat sector may not be as good as what it has been at the moment," said Albert Vernooij, animal protein industry analyst at Rabobank International, which tracks the commodity markets closely.

Indeed, in every state where the BJP has ruled, there are stringent laws against cattle slaughter. The BJP government in Karnataka was trying to get a similar law passed in the state before it was voted out of power. According to media reports, the state’s Congress government has no plans of reviving the proposal.

A spokesperson for the Maharashtra BJP said that as a matter of policy, his party will oppose cow slaughter vehemently if it is voted in, adding to the concerns of the beef industry. In a blog in August 2012, the BJP’s prime ministerial candidate Narendra Modi criticized the Congress-led United Progressive Alliance’s (UPA’s) policies, saying, “It saddens me that the present UPA government led by Congress is promoting slaughtering of cows and exporting beef to bring ‘pink revolution’."

The Maharashtra Pradesh Congress Samiti, meanwhile, has assured that support to the beef industry would continue if the Congress comes to power. The uncertainty over policies comes at a time when the export market for beef is on a record run. The US Department of Agriculture (USDA) expects global beef exports to hit a record high of 9.2 million tonnes next year. This represents a growth of 24% in last five years. USDA attributes this mainly to Brazilian and Indian exports.

The supply of beef in 2014 is expected to be thin in key markets such as the US, Europe and China. According to the latest livestock and poultry world markets and trade report by the USDA, beef production in the world’s largest beef producing country, the US, is forecast to plunge 6% due to a decline in cattle stock. USDA also expects the European Union to import 270,000 tonnes of beef in 2014 as beef production is forecast to only rise slightly while consumption remains stagnant.

In China, meanwhile, consumption is likely to exceed production amid safety concerns over poultry and pork products. As a result, USDA expects China to import a record 475,000 tonnes of beef during the year.

A recent quarterly report by Rabobank pointed out that the shortage of beef supply along with a number of other factors could take up beef prices in key international markets. High prices along with a high demand for imported beef can work in favour of Indian beef exporters.

Rabobank also says that exchange rate movements have increased the attractiveness of Brazilian and Argentinian beef. Similarly, India can exploit its weaker currency to increase its share in the international beef market.

USDA points out that a strong demand for dairy products has caused the number of cattle in India to increase to around 330 million. This is expected to increase beef production by 5% to nearly 4 million tonnes. According to USDA, government programmes such as “salvaging and rearing of male buffalo calves" and “utilization of fallen animals" implemented by the UPA government have helped India’s beef industry.

The government has implemented these schemes through the National Bank for Agriculture and Rural Development.

Ashok Kale, proprietor of Modern Abattoir, a slaughterhouse in Ahmednagar near Pune in Maharashtra, said the current government has undertaken a number of reforms to modernize abattoirs and improve the hygiene of the meat produced.

Modernization of abattoirs has increased the acceptability of Indian meat products in international markets, partly addressing health concerns.

“We are working with various abattoirs to modernize them with technological advancement which would improve the hygiene factor while slaughtering. This would also check the illegal slaughtering as municipal abattoirs do not have enough capacity to slaughter (animals for beef)," said Pradeep Bavadekar, managing director of MITCON Consultancy and Engineering Services Ltd, an engineering services consultancy firm.

According to the Agricultural and Processed Food Products Export Development Authority (APEDA), a government body responsible for promotion of exports of meat and other animal products, it’s the surge in international demand for buffalo meat that has pushed up beef exports.

Statistics from the agency suggest that there are 88 million buffaloes in India, which represent 58% of the world’s buffalo population.

“The demand for the Indian buffalo meat in international market has sparked a sudden increase in the meat exports. Buffalo meat dominated the exports with a contribution of over 86%. The product registered 27% growth in export during fiscal 2012-13 ...." says APEDA on its website.

According to APEDA, there are about 3,600 abattoirs in India and one integrated abattoir and meat processing plant for buffaloes for exports as well as domestic consumption. In addition, there are 24 meat processing plants, of which 13 are exclusively focused on exports.

The government has approved three new export-oriented units of buffalo meat processing plants over the last one year.

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