January 31, 2008

 

EU halts further imports of Brazilian beef

 

 

EU announced the suspension of Brazilian beef imports which is to take effect under new rules on January 31, according to EU health commissioner Markos Kyprianou.

 

The commissioner said that although the decision can change in the coming days, as of now, there will be no holdings authorized to export beef to the EU.

 

In December, the EU mandated that Brazilian beef imports should only come from authorized operators effective January 31.

 

The EU expected to approve about 300 farms, but Brazil presented a list of 2,600 for inspection.

 

Brazil is the world's largest beef exporter, with exports to EU accounting for one-fifth of the total Brazilian beef shipments.

 

Jose Vicente Ferraz, consultant of Agra FNP, pointed that the restrictions only apply to frozen and fresh beef, so processed beef exports can still expand.

 

JBS S.A., Brazil's largest beef producer, said it now expects beef prices in EU to surge, which in effect would be advantageous to the company's operations in Argentina, Australia and the US.

 

JBS director of Investor Relations Sergio Longo said that EU-bound beef exports would now be absorbed by the domestic market,

 

The company estimated total revenue of BRL25.5 billion (US$14.5 billion) this year, with 60 percent of it coming from the US market. It also previously forecasts a 15-percent rise in margins for EU countries.

 

The suspension on Brazilian beef exports came after last year's bout of apprehensions on the safety of meat from Brazil. EU member countries including UK and Ireland said that Brazil officials mocked EU standards, with 60 percent of its 2006 exports coming from three provinces where foot-and-mouth disease was rampant in 2005.

 

The EU executive branch said inspections conducted in November showed that Brazil did not meet EU standards on farm registration, animal identification and movement controls.