October 26, 2007

Trade equations shift as Russia eases bans on Brazilian beef

The easing of Russia's ban on Brazilian beef may change the trade equation among South American countries, according to Meat and Livestock Australia (MLA).

The end of Russia's ban on seven Brazilian meatpacker plants this week, along with the end of a ban on beef shipments from the port of Antonina, is expected to continue to boost Brazilian shipments to Russia.

The port routes 90 percent of Russia beef supply from Brazil. Russia is Brazil¡¯s largest export market.

The ending of the port ban would benefit the flow to Russia from the states in the South-central region of Brazil, as most of the shipments had to travel to other more distant ports during the ban, the MLA said.

However, Russia's ban on three Brazilian states remain - Parana, Mato Grosso do Sul, Santa Catarina and Minas Gerais.

Brazilian exports to Russia fell in 2006 due to FMD related trade restrictions. Russia also restricted beef imports from Argentina on sanitary issues, which left Uruguay to fill the vacuum left behind by these two major beef exporters, helping it achieve record high exports last year.

As Russia gradually ease the bans on Brazilian beef, beef prices in the country are dropping and Uruguay is now setting its sights on the more lucrative US market.

Argentina, faced with restricted access, is redirecting shipments to other higher priced markets such as Chile, Israel, Venezuela, and the EU, the MLA said.