October 31, 2007

 

Brazilian beef exports to EU fall by 40 percent

 

 

Despite its continual production increase of beef, Brazil's beef shipments to the European Union declined from 244,100 tonnes to 152,300 tonnes or 40 percent in the first nine months of 2007.

 

Analysts say the drop may likely be attributed on EU's ban on Brazilian beef for foot-and-mouth-disease and cattle traceability -- issues that have been highlighted in recent months by several EU member states, particularly by Ireland.

 

There are exceptions to the trend: beef exports from Brazil to Italy have increased from 37,100 tonnes to 42,200 tonnes; the Netherlands has stepped up its trade from 33,200 tonnes to 39,600 tonnes; and business with Germany has risen from 12,800 tonnes to 14,700 tonnes.

 

Of all Brazil's major customers in the EU, the UK has cut back most drastically, with imports falling from 55,800 tonnes to 21,000 tonnes.

 

Organisations such as the Scottish Beef Cattle Association will claim that this decline is a result of greater publicity concerning the risks of importing beef from a country where FMD has reached near endemic proportions, despite the fact that Brazil claims to have spent about GBP 1 billion between 1998 and 2003 in combating the disease - no reliable figures are available for recent years.

 

While Brazil's exports to the EU have declined in the first nine months of this year, trade with other countries has increased massively, from 642,400 tonnes in the first three quarters of 2006 to 853,000 tonnes in the equivalent period of 2007.

 

Russia is now the major destination, taking in 319,200 tonnes compared with 173,300 tonnes last year.

 

The Russian authorities were initially wary of Brazilian beef and the possible introduction of FMD, but those reservations appear to have been put aside, largely on the grounds of price.

 

Ireland has consequently lost considerable market share in Russia. Egypt is another important customer, taking 152,000 tonnes, and there has been a substantial increase in trade with Iran, where imports of Brazilian beef have risen from 23,700 tonnes to 47,100 tonnes.

 

The fear of importing disease is regularly cited as a major reason for the EU to cut back on imports from Brazil, but a major underlying concern remains the outcome of the World Trade Organisation talks on liberalising international commerce. Currently, Brazil and other South American countries have to pay a tax of 170 percent before beef can be landed in the EU. If these taxes were removed, there is no way any farmer in the EU could compete.

 

Europe frequently alleges that Brazilian agriculture operates on a "slave labour", but this is countered by claims that with the overall economy growing at close to 6 percent and creating two million jobs each year, wages have to be competitive.

 

Beef production in Brazil continues to expand at a remorseless pace, with the latest forecast revolving around claims that output from the country's 220 million cattle - which accounts for 20 percent of all beef cattle in the world - could increase sill further.

 

Exports are the key to the prosperity of the Brazilian beef industry and the latest figures from the country's foreign trade secretariat reveal that in the first nine months of this year just over one million tonnes were shipped to a range of markets all over the world. This represents an increase of 114,000 tonnes on the first three quarters of 2006.