February 6, 2012

 

Paraguay beef exports hit hard by FMD outbreak

 

 

Paraguay's beef exports could drop up to 30% this year due to outbreaks of foot-and-mouth disease (FMD), according to the latest trade data.

 

Paraguay declared a partial emergency after the outbreaks began last year. It launched extensive cattle vaccination campaigns and organised relief handouts for affected communities but the problem persists, the reports said.

 

Latin American beef exports are seeing a major downturn not only because of the disease outbreak but also because of declining output and rising domestic demand in some countries, international competition and currency fluctuations.

 

Argentine and Brazil exports were also hit because of changes unrelated to the Paraguayan outbreak. However, the disease prompted most of Paraguay's neighbours to halt or limit beef imports from the country.

 

Paraguay has admitted two separate outbreaks of the foot-and-mouth disease, the second occurrence blamed by critics on the failure of health officials to eliminate remnants of the first. Thousands of cattle were destroyed during the last quarter of 2011, government data indicated.

 

The Center for the Analysis of the Paraguayan Economy (CADEP) said the outbreaks had cost Paraguay several markets where competitor countries could be moving in. CADEP cited an anticipated 30% drop in exports in its latest estimates based on the current outlook for livestock health and beef processing.

 

Paraguay's beef sales this year could be about US$500 million, a major drop from US$725 million last year. Officials said they were particularly worried over the next steps by Chile, one of the main clients that stopped buying all Paraguayan beef, including meat produced outside affected zones.

 

CADEP said Paraguay's export outlook could get worse unless Chile resumed imports from Paraguay.

 

The response from Russia, another major customer for Paraguayan beef, has been more lenient.

 

However, officials said much hinged on Paraguay being granted an all-clear by the UN Food and Agriculture Organization. That certification is unlikely before late 2012.

 

Beef exports to neighbouring countries, including Venezuela, have suffered in varying degrees, partly due to local economic conditions. Venezuela is in the third year of a chronic recession blamed by the government on weather vagaries, including drought in 2010.

 

Paraguay exported 141,000 tonnes of beef in 2011 and 170,000 tonnes in 2010.

 

Meanwhile, Brazilian beef exports declined 14% in 2011, but the Middle East remained its largest market with Iran, Egypt, Saudi Arabia and Israel as main customers. Brazilian beef production is set to grow in 2012 but exports may not catch up on losses last year because of rising domestic consumption.