Brazilians feel the pinch as EU retains FMD import ban on beef

IT APPEARS increasingly likely that the EU ban on imports of beef from Brazil will remain in place for most of 2006, if not longer, as foot-and-mouth (FMD) continues to spread in what is fast becoming the largest cattle country in the world.

FMD was first confirmed in the Mato Grosso do Sul province in early October, but has now spread to several other regions. A total of 52 countries have now banned the importation of beef from Brazil.

In the first nine months of 2005, the UK imported just over 27,000 tonnes from Brazil worth around 90 million.

So far, according to the Brazilian Embassy in London, more than 30 cases of FMD have been confirmed, but results are still pending on several other suspected outbreaks. In theory, all cattle in Brazil are vaccinated twice annually, but the extensive nature of cattle production means that some animals are likely to be missed.

The Brazilian authorities take the view that the disease entered the country as a result of illegal imports of live cattle from Paraguay where prices are much lower.

The most important market for Brazilian exports is Russia, which in the January to November period this year imported product worth an estimated

$530m, which was more than twice the level of trade in 2004. That market is now closed, despite the efforts of an inward trade mission to Moscow recently.

However, Ukraine earlier this week decided to lift the ban on imports, apart from Mato Grosso do Sul. Last year Ukraine imported 20,000 tonnes of fresh and frozen beef valued at $33m. Further bad news for Brazilian beef producers is that Argentina is moving quickly to fill the void. Total exports from Argentina in the first three quarters of 2005 amounted to 312,700 tonnes - an increase of over 90,000 tonnes on the same months in the previous year. Russia is again the largest market taking in almost 150,000 tonnes, which is 150 per cent higher than in the same period of 2004.

However, it is not just beef which has been banned from many markets. Brazil exported 150,000 tonnes of pork in the first 11 months of this year, most of which went to Russia. That trade is now stalled and likely to remain so until the disease crisis is finally resolved. All South American countries have pledged to eradicate FMD by the end of 2009, but that may prove to be an overly ambitious target, given the lack of full traceability and cattle identification in many states.

Meanwhile, there is better news for US beef producers with the announcement that Hong Kong is now prepared to allow the resumption of imports following a two-year ban, which was triggered by the discovery of a handful of BSE cases close to the Canadian border.

Mike Johanns, the US secretary of agriculture, commented: "The agreement will allow the United States to export boneless beef from cattle aged under 30 months under the verification programme. In 2003 the US exported $90m worth of beef to Hong Kong. It was the fifth-largest market for US beef and the news is welcome for our producers."

Since December 2003, when many countries imposed a ban on US beef, Washington has made strenuous efforts to recover lost markets. To date the US department of agriculture estimates that it has regained access to 74 per cent of the outlets which in 2003 were worth almost $4 billion. However, Japan and South Korea have yet to be convinced of the integrity of US beef.

From the European perspective the resumption of US beef exports is a non-issue since Brussels does not permit the importation of beef which is raised with the use of growth promoters, as is the case in the US. However, with a probable beef deficit in the EU next year in the region of 400,000 tonnes, producer returns should rise.