Coronavirus-hit meat exports dent India's bio-diesel industry too

Animal tallow, a by-product of meat, is key raw material in the manufacture of bio-diesel

Bio-diesel manufacturing units in India are facing heat of the Coronavirus pandemic, which first broke out in Wuhan, China, in December 2019. Their troubles started  after Asian and middle-eastern countries stopped importing buffalo and goat meat, leading to a drop in animal tallow production, which is used as a key raw material by the bio-diesel industry.

Tallow is a rendered form of beef or mutton fat, used as feedstock by the bio-diesel industry during the winter. “Animal fat or tallow is used by most manufacturing units, as other sources such as palm oil are costly. The problem is that animal fat is a by-product of the meat industry. After the outbreak of Coronavirus, meat exports declined and our plants started running at only 30-40 per cent capacity since December,” said Shiva Vig, director, BioD Energy, a Haryana-based bio-diesel maker. Based on industry estimates, North India itself used to produce some 18,000 tonnes of tallow a month, of which about 7,000 tonnes were consumed by bio-diesel industry.

After the outbreak of the foot-and-mouth disease in 2001, Beijing had banned direct import of buffalo meat from India. “However, 60 per cent of overall meat exports were happening to China through other countries like Vietnam, Malaysia and Indonesia. Hence, after Corona outbreak in December, my company was facing a loss of over Rs 5 lakh per month. With complete shutdown, it has increased too,” said Muhammad Gulzar, owner of Al Suhail Ltd, a major animal fat supplier in North India.

According to a data available with Agricultural and Processed Food Products Export Development Authority (APEDA), out of total meat export worth of Rs 25,168.33 crore in 2018-19, about Rs 11,914.49 crore was to Vietnam, Rs 2,574.63 crore to Malaysia and Rs 2,266.99 crore to Indonesia. China started a clampdown of this illegal imports through stricter border controls since December, which was pegged at $2 billion annually.

“We are having a capacity utilisation of only 25 per cent and a lost of Rs 25-30 lakh for last four months and the complete lock-down for 21 days now is leading to a loss of over Rs three crore per month. Meat production has dropped as orders from Asian and middle-eastern countries became zero since January, leading to a drop in availability of tallow too,” said Sarthak Soni, director of Jaipur-based Rajputana Biodiesel. Soni added that around 40-50 retail outlets are there in Rajasthan that sells bio-diesel and unless the government consider it as an essential item as a clean fuel, Corona may completely destroy the industry.

“Because of Corona, our industry is the most affected. We are in talks with member units and buyers to have an immediate start of production, post lock-down period,” said Sandeep Chaturvedi, President of Biodiesel Association of India (BDAI).