May 10, 2007

 

Brazilian beef to still dominate global markets even with embargo - analysts

 

 

Market analysts say even with embargoes, Brazilian beef will not entirely disappear from the world's dinner tables whether or not the World Organization for Animal Health gives a positive review on the country's cattle herd later this month.

 

The Paris-based World Organization for Animal Health, or OIE, will meet on May 20-25 to discuss international animal health and safety and topping the agenda is whether to release top Brazilian beef states Sao Paulo, Parana and Mato Grosso do Sul from the list from the list of states considered free of foot-and-mouth disease.

 

Amarylles Romano, a meat market analyst for business consultancy Tendencias in Sao Paulo said Brazil's beef market is already going "hog wild" and not much can slow it down at this point.

 

Brazil is currently the world's top beef exporter.

 

Brazilian beef exports have been breaking records since 2005. Romano said volumes and revenues would hit or exceed the US$3 billion mark made in 2006 if not for the embargoes. But despite ongoing embargoes, Brazilian beef exports are climbing as evidenced by a 37.3 percent increase on year in April to 212,000 metric tonnes, according to the Brazilian Beef Exporters Association or Abiec.

 

Brazil's top two markets, Russia and Egypt, have partial bans on Brazilian beef because of FMD and Egypt prohibits beef from Mato Grosso do Sul. Russia has banned several states, but permits beef from Sao Paulo.

 

While the EU has banned beef from Mato Grosso do Sul, Parana and Sao Paolo, beef trader Jerry O'Callaghan from Coimex in Sao Paulo said the OIE decision will not affect EU's decision because the EU's executive arm in Brussels will still make the final decision.

 

O'Callaghan added the scope for Brazilian beef will still be bright as beef demand is growing in the wake of a reduction in chicken consumption due to bird flu.

 

According to Fabiano Tito Rosa, a market analyst for livestock consulting firm Scot Consultoria said should OIE give the green light to Brazil, it will be hard for EU to keep the ban on Brazilian beef.

 

The World Trade Organization recommends that its member states follow the food safety guidelines set by the OIE, or risk trade disputes. When WTO member nations continue food bans on goods not considered problematic by OIE, countries will have a better argument against the embargo in any eventual WTO trade disputes.

 

Abiec reports 35 countries currently have either full or partial bans on Brazilian beef. In late 2005, that number was as high as 56 nations.

 

Other significant markets banning Brazil beef in part include Algeria, which has bans on 13 states; Chile, which only allows imports from Rio Grande do Sul and Santa Catarina; and the United Arab Emirates, which has bans similar to the EU tri-state ban.