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BSE case could boost US beef exports to Russia

By Vladislav Vorotnikov , 18-May-2012

The re-emergence of bovine spongiform encephalopathy (BSE) in the US could lead to a short-term increase in US beef exports to Russia, Russian analysts have said.

Analytical agency Kazakh-Zerno pointed out that officials in Thailand have already said that the import of US beef from the affected region will be put on hold, although imports of goods such as boneless beef under 30 months, as well as dairy products, leather, gelatin, fat and collagen, will not been affected.

Indonesia has also temporarily suspended imports of US beef and South Korea is considering the same action, with San Ho Park, a representative of the Ministry of Agriculture, stating that his department will take measures to protect the health of its citizens.

It is expected that this could lead to a 20% drop in US beef prices in Asian markets and Russia, with prices of beef from Brazil, Argentina and Australia rising by 3-7%.

Russian officials have said that they will not ban imports of beef from the US. Alexey Alekseenko, spokesman of the Federal Service for Veterinary and Phytosanitary Surveillance (Rosselkhoznadzor), said: “Rosselkhoznadzor has already been notified about this case. We asked the American side for detailed information that will allow us to draw conclusions and to co-ordinate all necessary actions. The measures we take will depend on their prompt response. We have all the tools to prevent the importation of infected animals, such as breeding stock.  We are importing a lot of genetic material from cattle from the US and Canada, but no BSE has been detected in the samples.”

Experts are therefore predicting that Russian importers will make the most of the low prices and increase imports of US beef.

“Obviously this will lead to the jump of the import of beef from the US in the short-term, and of course all shipments will be delivered under very tough veterinary controls,” said analytical agency Agrorucom.

“Russian companies now have a chance to derive a good benefit from this situation, because the purchase prices are very low, while the price for beef on the national market will not decrease by even a single ruble. The volume of beef import from the US during the first half of 2012 may rise by almost by two times compared to the level of the same period of 2011, from 14,000 tonnes (t) to 24-26,000t.”

Exports of US beef to Russia only resumed in early 2008 after a five-year ban following a previous outbreak of BSE in the US. According to Russia’s Federal statistic service, Rosstat, Russia was importing 61,000t of US beef before the ban. In 2011 it imported about 35,000t.

Figures from the US International Trade Commission suggest that the US industry lost between US$2.5bn and US$3.1bn as a result of export bans when the disease was first discovered in the US.

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