December 10, 2012

Japan holds beef imports from Brazil on mad-cow disease

After a cow in Brazil's Parana state tested positive for mad-cow disease, Japan suspended imports of the meat from the former.

"We suspended imports from Brazil as soon as an outbreak of BSE was confirmed," the Ministry of Agriculture, Forestry and Fisheries said on Sunday (Dec 9), referring to bovine spongiform encephalopathy, or the brain-wasting disease known as mad cow.

Japan, which imported 1,435 tonnes of Brazilian beef last year, will seek supplies from alternative exporters such as the US and Australia. Other beef importers may follow suit, bolstering cattle futures in Chicago that rallied to a record last month.

Brazil's Ministry of Agriculture said on December 7 that tests on a 13-year-old cow that died in Brazil's Parana state in 2010 showed it carried the "causing agent of bovine spongiform encephalopathy." The animal did not develop the disease, nor did the agent cause its death, according to the Brazilian ministry.

Cattle futures for February delivery lost 0.5% to US$1.304 a pound on the Chicago Mercantile Exchange on December 7.

Shipments from Brazil were limited to 0.3% of Japan's beef imports last year as meat from the South American country must be heat-treated before arrival on concerns about foot-and-mouth disease there. Japan imported 240,815 tonnes of beef in the first half of 2012, with 24% coming from the US, according to the ministry. Australia was the largest supplier at 153,938 tonnes.

The health ministry will next year relax to 30 months from 20 months the maximum age of cattle from which US beef can be imported, according to Hideshi Michino, director at the ministry's food-safety department. The threshold was imposed to safeguard against mad-cow disease, as the US found its first case of BSE in 2003. The risk of BSE may be lower in cattle younger than 30 months, scientists have said.

Brazil, the world's largest beef exporter, has shipped US$4.2 billion worth of the meat through September this year, up 5% from a year earlier, according to information on the exporter's association website. Russia is the biggest importer, buying about 20%.

JBS SA (JBSS3), the world's largest beef producer, fell the most on the Bovespa index on December 7 on speculation Brazilian exports may be halted on mad-cow concerns.