India and Turkey: Competitive Advantages Impact Global Trade


Beef shipments have nearly tripled between 2008 and 2013 and are forecast at a record of nearly 1.9 million tons in 2014. India has become the world’s second largest exporter with a 20 percent market share.


Broiler meat exports are forecast at a record 480,000 tons in 2014, up from 42,000 tons in 2008. Although Turkey has only achieved a 4 percent share of the global market, shipments are primarily to the Middle East, the world’s strongest growth region.

Gains are due to competitive advantages:

• Geography: India and Turkey are close to key markets which facilitates shipping logistics and lowers costs. India exports primarily to Southeast Asia and the Middle East, while Turkey ships over half its volume overland to Iraq.

• Product Differentiation: Both countries supply halal meat, a desired attribute or essential requirement in many of their markets. India ships “carabeef” (from water buffalo), a lowerquality price-competitive meat with binding characteristics favored in processed product manufacturing. Sixty percent of Turkey’s exports are whole birds, preferred over parts by Middle East consumers.



• Global production is revised slightly higher from the November forecast to a record 58.9 million tons. Increases for the United States and a number of other countries offset a downward revision for the EU and a small reduction for Australia.

• Global trade continues to flourish despite tight supplies and exports are revised over 300,000 tons higher to 9.5 million. A more favorable demand outlook for a wide range of countries such as China, Venezuela, Angola, Chile, Saudi Arabia and the EU will stimulate greater shipments by Brazil and India. For the United States and Australia, significant changes in demand and tight supplies will impact trade patterns, but not necessarily volumes.


Drought and Adverse Weather Conditions Continue To Impact Several Major Producers

Production in the United States is raised 212,000 tons to 11.2 million on larger than expected placements due to dry conditions and favorable returns to feedlot operators as well as heavier slaughter weights. However, production will still be at the lowest level in 20 years. On the contrary, Oceania remains at levels comparable to recent years despite weather challenges. Australia is forecast 25,000 tons lower to 2.2 million as drought pushed producers to slaughter in 2103, reducing the cattle available in 2014. New Zealand is also lowered slightly to 630,000 tons as lighter weights more than offset increased slaughter. Larger dairy herd numbers and a repeat of dry conditions in the biggest dairying area, Waikato, will generate a higher cow slaughter than originally forecast.

Changing Dairy Policies Impact EU Production

EU production is down 180,000 tons to 7.6 million. The elevated milk price and approaching abolition of the milk quotas in 2015 will encourage farmers to retain animals to expand the dairy herd. Lower calf slaughter on the continuing economic crisis in the main veal markets (Italy, France and Spain) also contributes to the reduction.

Efficiency Gains Expected For India and Mexico

India is raised 50,000 tons to a record 4.0 million due to increased weights on efficiency gains in the dairy sector such as the utilization of more nutritious feed. Mexico is 25,000 tons higher to over 1.8 million on higher carcass yields due to improved feed availability.

Global Demand Bolsters Brazil and Belarus Slaughter

Increased slaughter drives Brazil 20,000 tons higher to over 9.9 million. Strong global demand and depreciation of the Real facilitates competitive export pricing and improves packer margins.

Belarus is raised 20,000 tons to 295,000 as Russia’s closure to several suppliers increases demand for imports from within the Customs Union.

Outlook Improved For Argentina

Argentina’s production is raised 60,000 tons to 2.9 million driven by higher slaughter.


China’s Demand Forecast to Grow Significantly

Rising consumer demand and competitive prices are forecast to boost China’s imports up 75,000 tons to a record 550,000. Slower poultry demand following the recent H7N9 poultry outbreak is also a factor in stronger demand. Domestic beef production is unable to meet this growing demand which generates significant opportunities for countries eligible to supply China. As the United States, Brazil and India unable to ship to China, the market is shared by Australia, Uruguay, New Zealand, Canada and Argentina. Australia is the dominant supplier with over half the market while Uruguay comprises about one-quarter. Both are expected to capture most of the forecasted gains.

Growth in Minor Markets Benefit Export Leaders Brazil and India

Despite being blocked from shipments to China, the export forecasts for the world’s largest and second largest exporters, Brazil and India, are revised upward 90,000 and 125,000 tons, respectively. While India’s forecast reaches a new record of nearly 1.9 million tons. Brazil’s forecast of over 2.0 million tons will not surpass its 2007 record (2.2 million). Imports are forecast higher for Venezuela, Angola, Chile, Saudi Arabia and Iran due to increased demand. Brazil and India are able to make additional and substantial inroads in these various markets due to their competitive pricing.

Exchange Rates Impact Canada and EU Trade

Canada’s imports are cut 25,000 tons to 290,000 due to the weaker Canadian dollar combined with tight supplies in the United States, which accounts for about three-quarters of the market. However, exports will be supported by the weaker currency and are up 30,000 tons to 355,000. Nonetheless, exports remain at about half the level of the early to mid-2000s as lower production limits exportable supplies.

EU imports from Brazil have accelerated recently due in part to the depreciation of the Real against the Euro. In addition, lower expected slaughter and beef production generates an upward revision to the EU import forecast of 30,000 tons to 380,000. The depreciation of South American currencies is expected to maintain the slightly higher import level from Brazil and Uruguay. Reduced supplies and an elevated exchange rate also spur a downward revision of EU exports by 30,000 tons to 240,000.

Tight Supplies Shift Some Trading Relationships

For the United States, tight supplies with strong demand for processing beef will also prompt additional imports which are raised 28,000 tons to nearly 1.1 million. Increased volumes will be supported primarily from increased shipments by Mexico, but also Australia and Canada.

Downward revisions in imports for several key Asian markets (Korea by 38,000 tons, Taiwan 25,000 tons and Japan 21,000 tons) are driven largely by tight Australian and U.S. supplies. Australia will likely reduce its shipments to these key Asian markets in order to service growing Chinese demand. In the case of Japan, U.S. beef is expected to make minor gains and raise its market share as it increasingly displaces Australian beef in that market. Total U.S. exports are up 98,000 tons to over 1.1 million despite tight supplies due to strong Asian and Mexican demand.

Paraguay and Belarus to Make Gains in Russian Market

Although Brazil supplies about half the Russian beef market, restrictions and challenges for various other exporters (United States, Australia) will generate additional opportunities for Paraguay and Belarus whose export forecasts are up 25,000 and 20,000 tons, respectively.

Government Intervention in Argentina Continues to Stymie Exports

Argentina’s exports are down 20,000 tons to 200,000 despite strong global demand. The government continues to assert strong control on shipments and meat packers’ returns are minimized due to the increasing costs and limited exports.



• Global pork production is raised 1.8 million tons from the November forecast to a record 110.7 million as growth in China and Russia more than offsets reductions in the United States and the EU.

• Global trade, on the other hand, is forecast lower, with exports reduced nearly 400,000 tons to 6.9 million. This is largely due to Russia’s restrictions on imports of EU pork as well as tight exportable supplies from the United States.

• Swine disease outbreaks are major forecast movers. Porcine epidemic diarrhea (PED) has affected production estimates in a number of North American, Asian, and South American countries. This in turn impacts import demand and exportable supplies. Meanwhile African swine fever (ASF) is cited as the reason for Russia’s restrictions on imports of European pork.


China’s Production Expands despite Low Prices

China, accounting for over half of global pork production, is raised 2.3 million tons to a record 57.0 million because of fewer swine disease outbreaks and better animal nutrition and genetics resulting in heavier slaughter weights. Government intervention programs are encouraging producers to stay in business despite low or even negative returns. For example, the government has a pork purchasing scheme and some provincial governments have implemented both hog subsidies and insurance trials, all attempting to prevent significant fluctuations in pork production.

Russia’s Import Restrictions Impact Domestic and EU Production

Russia is boosted 250,000 tons to a record 2.6 million, largely on greater producer returns resulting from tight supplies caused by import restrictions on EU pork. The Russian industry continues shifting to larger, more efficient operations. The government is supporting the modernization of pork production facilities, including subsidizing improved breeding stock and genetics through the “Pork Production Development in 2013-2015 Plan.” Small farms, on the other hand, are poorly positioned to compete with large-scale operations and are being encouraged to exit hog production in order to reduce ASF risks. With import restrictions in place against pork from the EU, the expanding industry is poised to benefit from higher prices.

EU is cut 150,000 tons to 22.3 million as the loss of their top export market, Russia, limits gains in hog and pork prices, which remain below last year. Weights remain near last year’s level. Slaughter is eased as the outlook for recovery in piglet production is weakened largely due to pressure on producer returns.

North American Production Is Lowered on PED Impact

Due to the effects of PED, production in the United States is lowered 453,000 tons to 10.3 million. Heavier weights will not be enough to offset tighter hog supplies. Beginning swine inventories fell 1.8 million head to 66.0 million. Piglet production is also reduced by 8.7 million head to 113.2 million as PED losses of pre-weaned piglets result in lower litter rates. Tight hog and pork supplies are expected to lead to higher prices for both domestic and export markets.

To date, the spread of PED in Canada has not been as severe as in the United States, with approximately 50 cases reported in four Canadian provinces as of mid-April. Canada’s production is lowered 30,000 tons to 1.8 million, making it unchanged compared to 2013. At the current time, PED is having a minimal impact in Mexico. Production is lowered 5,000 tons to 1.3 million as heavier weights are expected to nearly offset lower slaughter.

Asian Countries Are Also Impacted by PED

Production for Taiwan is lowered 25,000 tons to 815,000 as PED losses are expected to reduce slaughter hog supplies. Japan is unchanged at 1.3 million tons as heavier weights are expected to balance reduced slaughter. Meanwhile in South Korea, production is raised 10,000 tons to 1.2 million with heavier slaughter weights more than offsetting PED losses.


Top Exporters Constrained; EU by Trade Restrictions, United States by Tight Supplies

EU exports are forecast to drop 200,000 tons to 2.0 million due to the loss of their top market, Russia, which accounted for 23 percent of their trade in 2013. Some shipments will likely be redirected to Asia, with China expected to become their top market. Exports to the United States are also likely to increase. Greater domestic consumption is forecast, with growth from the central Member States. Russia’s import restrictions were implemented at the end of February after 4 cases of ASF were reported in Poland and Lithuania. The EU has initiated a World Trade Organization (WTO) case on Russia’s restrictions, stating that the blanket ban on pork from the entire EU is disproportionate and in violation of WTO rules.

The United States is expected to decline 190,000 tons to 2.2 million as tight supplies and record high prices are impacting U.S. competitiveness. On a positive note, the United States has regained partial access to the Russian market, which had been closed since early 2013. The export share of production is now forecast to fall for the second year to 21 percent. Lower production and tight supplies are expected to boost imports, raised 25,000 tons to 415,000.

Brazil Benefits from Trade Restrictions, Canada from PED-Induced Global Supply Tightness

Brazil is forecast 55,000 tons higher to 675,000, with increased shipments to Russia replacing EU pork. With an additional plant becoming eligible to ship to Russia at the beginning of April, export prospects are supported. The depreciation of the Real is also expected to make Brazilian product more competitive in the world market. Canada is raised 20,000 tons to 1.3 million, with greater shipments expected to the United States, their top market, due to reduced U.S. production tied to PED losses.

Growth Is Expected for Some Smaller Exporters

China and Mexico are raised slightly on stronger Asian demand. For Mexico, exports are forecast 5,000 tons higher to 125,000 mostly on Japanese demand. China is raised 10,000 tons to 275,000 on ample, relatively low priced supplies with some demand growth expected from Hong Kong, the Philippines, and Malaysia.

Imports Are Limited by Trade Restrictions and Tight Exportable Supplies

Russia’s imports are lowered 270,000 tons to 650,000, the lowest level in 10 years, due to import restrictions on product from the EU, their largest supplier. Greater shipments from Brazil and resumed access for two U.S. plants are expected to replace some, but not all EU pork. Despite greater production, consumption is lowered to 2012 levels.

Mexico and Canada are lowered due to tight supplies in the United States, their major supplier. Mexico is reduced 15,000 tons to 785,000 and Canada is cut 20,000 tons to 215,000.

Japan is down 20,000 tons to 1.2 million with pork facing stiff competition from other protein sources. The top suppliers are expected to remain the United States (44 percent), the EU (25 percent) and Canada (17 percent). The EU could gain some market share due to more competitive prices and increased availability of product. Also, some Japanese importers are beginning to diversify their supply base, increasing imports from lower-priced suppliers.

Slightly Higher Imports Are Forecast for China

China is forecast 15,000 tons higher to 790,000, yet imports still only account for one percent of consumption. Greater shipments are expected from the EU, their top supplier.



• Global broiler meat production is still a record, but revised downward from the November forecast by 1.7 million tons to 85.3 million due to declines in China, Brazil, Russia and the United States.

• Global trade is virtually unchanged as exports are forecast at 10.7 million tons as reductions in Brazil and the EU are offset by increases in Turkey, Ukraine and China.


Avian Influenza Pressures Chinese Production

Avian influenza (AI) in China has reduced the production forecast 1.0 million tons to 12.7 million. The disease has weakened demand and encouraged consumers to substitute red meat and fish for poultry, resulting in financial loss for the industry. However, the disruption in live bird sales and reduced consumer demand for wet-market product may bolster supermarket purchases.

Lower Profitability Cuts Production in Brazil, Russia and the United States

Brazil is down 342,000 tons to 12.7 million on lower than expected domestic and foreign demand. Domestic consumption is dampened by economic uncertainty, rising inflation and greater competition from beef and pork. Russia is 200,000 tons lower to 3.1 million as expansion is constrained by high indebtedness and market saturation. The United States is cut 180,000 tons to 17.3 million, but still a record, as producers respond to moderating prices.

Demand Bolsters India and EU Production

India is raised 100,000 tons to a record 3.7 million on greater domestic demand and increased feed availability. The industry is thriving with improved margins as a result of relatively low corn prices and stable poultry prices. The EU is 50,000 tons higher to 10.0 million as the economic slowdown encourages consumption of more price-competitive and convenient broiler meat. Higher production in Benelux, Germany, the United Kingdom, and Romania is expected to offset declines in France and Spain.

Mexico is virtually unchanged at a record 3.1 million tons.


Middle East Continues to Rise, Benefiting Turkish Exporters

The Middle East remains the world’s largest regional importer and represents the largest gain in imports at 65,000 tons. Greater demand is expected to bolster imports by Saudi Arabia, up 35,000 tons to a record 860,000. Iraq is also forecast at a record level, up 30,000 tons to 730,000.

Turkey’s exports are 40,000 tons higher at a record 480,000 on greater demand from the Middle East, at the expense of Brazil, the EU, and the United States. The main priority of the industry is foreign markets as domestic demand continues to decline.

Brazil and EU Exports Expected Lower

Brazil’s exports are reduced 25,000 tons to 3.6 million on lower than expected demand in Sub-Saharan Africa and greater competition in the Middle East. Despite a depreciating Real, constraints such as antidumping tariffs in South Africa continue to limit exports. EU exports drop 35,000 tons to 1.1 million on the cessation of export restitutions, in addition to the decline in the whole-bird exports to the Middle East.

Demand Shifts in Other Markets

Exports from the United States remain virtually unchanged at a record 3.4 million tons, as shipments to top markets such as Mexico and Canada remain strong.

Venezuela’s imports are up 40,000 tons to 340,000.

EU imports are 30,000 tons higher to 700,000 based on higher demand for inexpensive sources of animal protein.

Angola’s imports are down 25,000 tons to 350,000