World Beef Report Issue 1225 Published in World Beef Report (/site/index.php/en/editions) Tuesday, 18 July 2017 00:00 Date: Wednesday, July 19th, 2017/Editor: Rafael Tardáguila China buys but resists accepting higher prices asked by the region Stronger Real curbs business with Russia Weaker dollar and post-season pushes Mercosur steer price up Chinese Group buys 50% of Uruguayan packer Lorsinal Argentina improves Hilton performance but loses sales for 6,800 tons Paraguayan beef exports in June at 20-month top US says no timetable to reopen market for Brazil

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FOB Mercosur China buys, but resists higher prices asked by regional exporters For the Mercosur region countries, the international beef market goes through a situation of uncertainties and tensions in some destinations to accept higher prices. Both Uruguay and Argentina try to transfer higher cattle prices to exports but that seems to find a firm opposition from importers. In fact, the tone in the Chinese market is a relatively stability for most cuts. In Brazil, the export market is “calm” and “it’s not easy” to find attractive options to sell the beef stocks that Brazilian packers have in cold depots, a trader commented. Even though 7-cut forequarters still get in China around US$/t 4,050 CIF, units trying to get higher prices don’t find a positive answer in the other side of the counter. At the same time, the Hong Kong market is as well reported “calm” and with “difficulties” for offal coming from the region. The source said that shin & shank from Brazil fell to less than US$/t 4,000 CIF, while the product from Paraguay is sold at US$/t 3,500 CIF. A Uruguayan exporter added that with such a low slaughter and perspectives of levelled prices for some more weeks, sales in that market are not easy. “Uruguay alone doesn’t move the needle; we depend on what happens with the offer from other markets like Brazil, Argentina and Paraguay”, the source indicated. He also said that Uruguayan plants “are unable to transfer raises of more than US$/kg 0.20 of cattle prices” into export values. The source reminded if international demand is unable to accept higher beef values, what usually happens is that they start to ask for cheaper cuts as a first option and then change to other protein sources like poultry or pork.

Europe tends to stabilize; lower offer support values Hilton rump & loin destined to the European Union tended to stabilize in operations done up to late last week. Sources in Argentina mention a “market price” between US$/t 13,400 and 13,500, beyond some brand that may obtain higher values. In Uruguay, a holiday yesterday generated a “very calm” Monday, market operators told WBR. Prices remain between stable and slightly higher product of a limited offer, particularly for spot operations. The R&L reference in Uruguay is around US$/t 12,300- 12,500 FOB, but the industry understands that the floor with current cattle prices should be US$/t 12,600 FOB. The source added that after bulky European purchases in the first two weeks of July – particularly within the 481-quota – sales seem to have reacted in a more favourable way after some “blocked” days. The euro strengthened 0.8% yesterday to US$/€ 1.15 and that provides some more support to future sales.

In Paraguay, the industry reports firmer prices for Hilton rump & loin at US$/t 11,200-11,300 FOB with “expectations” to reach US$/t 11,500 FOB by the end of the week.

Chile recovers with purchases for national holidays After several weeks in which the Paraguayan industry faced problems to improve beef prices in the Chilean market, also product of a bigger availability of Brazilian beef, the trend changed during the past. The lower slaughter in Paraguay during the first two weeks of July and a bigger interest from Chilean importers to cover the high demand generated by September’s national holidays – the highest peak of consumption – affirmed export values around US$/t 5,100-5,200 CIF for the 20-cut mix. “We now hope to reach US$/t 5,400”, a Paraguayan exporter speculated.

Stronger R$ curbs business with Russia

Even though up to mid past week there were Brazilian sales of chuck & blade in Russia at US$/t 3,500 CIF, this week the exporting rhythm fell strongly product of a stronger Brazilian currency (R$) that yesterday reached R$/US$ 3.16. “At this value, accounts changed for exporters”, a trader indicated. Meanwhile, Russia offers US$/t 2,800 CIF for Brazilian trimming 80 VL but the product is easily sold in the local market due to the big reduction of JBS sales in the past months, the source explained. Brazil tries not to saturate Egyptian market

In the last few weeks Brazilian units “loaded significant volumes” of full forequarters destined to Egypt at US$/t 3,550 CIF. “The market is now calmer because we don’t want to saturate it and throw prices down”, a trader explained, and added that the Saudi Arabian market remains “very weak”.

The US keeps demand levels Although the US beef import market showed weaker for Australia in the past week, in Uruguay an exporter assured that “demand remains fluent” with a reference for in-quota 90 CL stabilized at US$/t 4,700 FOB. The exit of Brazil, jointly with better prices, allowed growing volumes exported from Uruguay. INAC reported shipments in the week to 8 July equivalent to 2,463 tons cwe, the highest weekly volume since the second week of September 2016.

MARKETS Weaker dollar and post-season pushes Mercosur steer price up

A new frustration for Trump’s administration after the rejection of the second intent to change the Obamacare program in Congress pushed the US dollar down in world markets. These facts could impede Trump’s commitment to reduce taxes and the economy strength increasing the possibility that the Fed may be forced to stretch the time to raise interest rates, so that investments in US dollars are again less attractive. Within that context, the Brazilian currency gained 2.9% in the week and accumulates a 5% recovery in the last four. Therefore, despite the falling average price of steers in the main beef exporting states – losing another R$/@ 1 in the week to R$/@ 120 – it gained 5 US cents to US$/kg 2.53 cw. In the rest of the region slaughter-ready cattle prices as well improved, mainly due to a seasonal offer reduction. Resulting from all this, the Mercosur Steer Index (WBR/MSI) climbed 4 US cents in the week to US$/kg 2.79 cw. (/site/index.php/en/component/banners/click/106)

Brazil

Live cattle exports 53% higher in June According to data divulged by the Ministry of Industry, Foreign Trade and Services, in June Brazil exported 25,000 cattle head valued in US$ 15.6 million. In comparison with May, the number of animals sold abroad grew 23.2% but the growth was 53.3% inter-annually.

Of June’s total, 15,100 head were shipped to Turkey, by far today the main destination for live cattle from Brazil. Shipments to that market so far in the year reached 61,800 head, which corresponds to 49.3% of total live cattle exports, Scot Consultants reports.

Court authorizes sale of JBS assets to Minerva An appeal court authorized the planned sale of the South American assets of JBS SA to competitor Minerva SA in US$ 300 million while the biggest world beef processor faces a federal investigation for corruption. On Wednesday afternoon, the Federal Regional Court of the First Region of Brasilia revoked the 21 June decision of Federal Judge Ricardo Leite that blocked the sale agreement. Leite argued that the sale of nine units in Argentina, Paraguay and Uruguay could affect the investigation against the Batista family. Judge Leite works in the same court that will study the collaboration agreement signed by Wesley and Joesley Batista – who control JBS through the conglomerate J&F Investimentos SA – with public prosecutors for their participation in a huge bribery case.

JBS close to agree for millionaire debt with Brazilian creditors

Main Brazilian creditors of JBS are ready to close an agreement to refinance debts of the beef processor for near R$ 18 billion (around US$ 5.625b) that mature within one year. Negotiations take place in a moment when the company goes through turbulences linked with the corruption scandal that involves the Batista brothers. The local banks Caixa Economica Federal, Santander Brasil, Banco do Brasil and Bradesco are trying to convince Itaú Unibanco to adhere to the plan by which JBS may obtain an enlarged 12-month payment term in exchange to an advanced payment of R$ 2 billion and extra guarantees, news agency Reuters informed. Market speculations include the possibility of JBS getting rid of assets for around R$ 20 billion (more than US$6b). Newspaper O Globo speculates that next sales may involve dairy company Vigor and the cellulose plant Eldorado, with Chilean Arauco as the main candidate to acquire it.

MARKETS

Persistent downward pressure over cattle prices

The cattle market showed this week new downward adjustments on its reference prices. According to Scot Consultants, in most of the cattle regions supply is comfortable for the industrial needs, which, summed to slow beef sales in the wholesale market, drive industrial units to pressure prices further down. In Sao Paulo, the 30-day steer reference lost R$/@ 1.5 to R$/@ 126. Price drops were also registered in Mato Grosso do Sul, Rondônia and Goiás, among others.

In the short term, even though demand is expected to fall further in the rest of the month – retail prices already adjusted downwards -, the offer of finished steers is as well expected to fall, which may contribute with a scenario of stable prices in the coming days. (/site/index.php/en/component/banners/click/182)

Uruguay

Chinese group acquires 50% of meatpacker Lorsinal The Chinese group Sundiro Holding acquired 50% of the local meatpacker Lorsinal and signed an agreement to buy the other half by July 2018, members of the Uruguayan firm told WBR.

In this way, the extended sale process of the unit located in Melilla, in the outskirts of Montevideo, which in principle was to be acquired by two Chinese groups by the end of last year, comes to an end. The second group was the Foresun Group, owner of the Rosario packer, associated with a local investment group led by Lucia Viana, which finally stepped down. The market speculates with the possibility that this group could be planning the purchase of another local packer. It should be reminded that the first target of Lucia Viana in March 2015 was meatpacker Las Moras that, according to proprietor Enrique Misa, was initially bought “on word” but afterwards discarded. The amount for the Lorsinal operation is US$ 36 million. The agreement includes a fine sentence if the group decides not to complete the acquisition by July 2018. Sundiro Holding is a firm of Chinese capitals based in Shanghai, with operations started in 1988 in the motorcycle industry. It currently operates in four segments: coal, logistic and transport services, electric cars and “others” that include beef processing and sale. So far this year Lorsinal processed something more than 40 thsd cattle head, 3.1% of the overall national slaughter. Exports were around US$ 37 million, of which US$ 15.3 million (41.5% of the total) were sold in China.

MARKETS Short offer determines new raises on finished cattle prices The short offer of finished cattle faces an active demand that has no other option than to pay more to get the necessary animals. But the exigency is clear it should be for special cattle, hard to find because many oat and clover fields were delayed by rainfalls and feedlot cattle, that just starts to increase its participation in slaughter, is not yet enough to cover industrial necessities at this time of the year. A narrower gap on prices between oat/clover field and feedlot animals is now observed. The price currently handled in the market for special steers is US$/kg 3.20 cw; however, some units ignore the reference and pay US$/kg 3.25 cw and even 3.30 for very good lots, “but not all are ready to pay that value”, a market operator made it clear. On its side, female cattle travel on the footboard of this upward trend and special cows quote at US$/kg 2.95 cw as a base, while heifers easily get US$/kg 3.05. Bookings are agile, around five days. Market operators believe there’s still a way to go to reach the post-season high peak, though they coincide that this length could be covered very quickly. Perspectives include the lowest point of the offer in the second half of July instead of the second half of August as it happened in the past two years. Cattle slaughter contracts 10% in two weeks

Cattle slaughter fell further in the past week, in this case around 1,000 head, with which it accumulates a 10% drop in the last two weeks. INAC reports that in the week ended 15 July certified industrial units processed 41,595 head, 965 animals less than in the previous and 5% below the same week 2016. In this way, in three of the last four weeks the industrial rhythm was below last year, something that was rather unusual during the first half of the year. The numbers of the current week will surely be much lower as it includes a holiday on Tuesday and a national stoppage on Thursday The drops mainly came from female cattle with 1,758 head less (-8.6%), while steers grew in 962 head (+3.6%). In total, arriving cattle included 22,173 steers and 18,699 cows, So far in the year, in the case of cows only in the Easter week the activity was lower than a year earlier.

The leading units were BPU (3,523), Marfrig-Tacuarembó (3,104) and Las Piedras (2,990). Taking into account the activity in the first half of July, it’s a fact that the month’s total will be below that of July 2016, when 191 thsd head were processed, something that was not happening since April of last year, 15 months ago. Sheepmeat market keeps showing firm prices Demand in the sheepmeat market remains firm, with values that gradually correct upwards. A push in lamb offer occurred last week which was absorbed entirely by the industry. This improved category values to around US$/kg 3.35 cw. The sheep price remained steady at US$/kg 2.95 cw.

The industrial activity in the week to 15 July in the sheepmeat market totalled 7,104 head, 387 more than in the previous. Lambs were 71% of the total (5,056).

The leading units were San Jacinto (2,822), Las Piedras (2,187) and Sidercol (1,071).

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Argentina

Argentina improved Hilton performance but lost sales for 6,800 tons According to data provided by the European Commission, in the recently ended 2016/17 agrarian year, Argentina shipped 23,112 tons under the EU Hilton quota, 78% of its annual allocation of 29,500 tons. This signifies that 6,388 tons remained unaccomplished, something more than the entire quota assigned to Uruguay. Though still far from the best, Argentina’s performance – the country that by far has the biggest Hilton quota share – was better than in the past two years. In 2015/16 the country exported 22,350 quota tons (the worst performance in many years); 22,867 tons in 2014/15; 23,664 in 2013/14 and 24,336 in 2012/13, It must be reminded that till 2013/14 the Argentine quota allocation was of 30,000 tons. Brazil, the second country with the highest assigned share (10,000 tons) complied with 86% of its quota despite the problems resulting from the Weak Meat operation. Australia is third in the Hilton ranking with 7,150 tons and shipped 57% of the allocation while its neighbour New Zealand, with a much smaller share, had a better relative performance by shipping 89% of its 1,300-ton allocation. Uruguay is ranked fourth and was the country that showed the best performance by covering 99% of the 6,376-ton share with just something more than 10 tons left over.

Lastly, Paraguay as well showed a very good performance by complying with 98% of the 1,000-ton assigned share.

Up to April, Argentina is the second EU beef provider surpassing Uruguay

According to the European Commission, in the first four months of 2017 Argentina surpassed Uruguay in beef shipments to the EU. Although the difference is small, Argentina’s advantage hasn’t happened for many years. Data surveyed by Eurostat and Comext said that from January to April the EU imported 20,883 tons cwe from Argentina, while sales from Uruguay totalled 20,474 tons.

Both countries grew strongly as EU beef providers in the yearly comparison, hand in hand with a 28.9% tumbling purchases in Brazil, surely impacted by Operation Weak Meat. According to the data, the EU bought 26.8% more beef in Uruguay and 49.1% more in Argentina. Anyway, Brazil is still the main provider in the EU with 35,319 tons cwe shipped in the 4-month period. Argentine slaughter up 3.6% in 1st half of the year

Cattle slaughter in the first half of 2017 climbed to 6.15 million head, up 3.6% in the inter-annual comparison, says data provided by Ciccra. Of that total, female cattle represented 42.5%, “2.1 percentage points above the first semester of 2016”.

Meanwhile, beef production totalled 1.38 million tons cwe, 3.1% above the first semester of last year. “Once again, the lower production recovery with respect to total slaughter was product of a small 0.5% drop in the average slaughter weight”, by falling from 226 to 225 kg.

Beef exports represented 8.4% of the production According to Ciccra, the beef industry turned over the market 1.266 billion tons during the first half of 2017, which means a 3.1% inter-annual increase. Of that total, exports represented 8.4% with the domestic market taking the other 91.6%. Based on this, the annualized per capita consumption was 57.5 kg, 2.0% above the register of the first half last year.

MARKETS Export cattle prices strengthen again

The prices of export animals again had an upward push that carried best steers to move between A$/kg 56.50 and 58.50 OTH, which meant a A$/kg 1.50-2.00 improvement so far in July after the static prices observed in June. Brahman crossbreeds also climbed A$/kg 0.50 to A$/kg 52.50-54.50 OTH. Meanwhile, good and special cows improved A$ 1 to A$/kg 45.50-46.50 OTH.

(From our correspondent in Argentina: Alejandra Groba).

Paraguay

Beef exports in June at 20-month top

The growth in slaughter allowed a strong increase on Paraguayan beef exports in June. According to Customs, based on export requests, trade totalled 27,410 tons swt, the highest monthly volume since October 2015, twenty months ago.

Even below the historic peak of May, sales to Chile (9,344t) kept the high levels, while exports to Russia increased 50% in the monthly comparison (more than 2,000 additional tons) to 6,442t. Both destinations accumulate 58% of the month’s exports. The third buyer in June was Vietnam with 1,966 tons, though in the first half sales to this market contracted 31% to 8 thsd tons. Paraguayan fresh beef sales in the first semester of 2017 totalled 130,070 tons, 1.5% below the same period last year. The average export prices was US$/t 4,225, up 10.8% in the yearly comparison. This improvement comes from a recovery of prices in main destinations (Chile +8%, Russia +9% and Brazil +27%) as well as from a growing proportion of chilled beef that gets a higher average price than the frozen product. “Imminent” opening of Hong Kong

At the same time, a Paraguayan industrialist informed WBR that the acceptance of Paraguayan beef cuts in the Hong Kong market is “imminent” as the result of an audit was “positive” and the last bureaucratic details will be adjusted this week through e- mail exchanges between sanitary authorities. Cattle slaughter grows 3% in first semester

Cattle slaughter in Paraguay in the 1st half of the year ended at 1.045 million head, 3% above from the same time last year. Even though weather conditions had its incidence in the slaughter rhythm during some punctual weeks, it was considered benevolent for cattle finishing with good availability and quality pastures.

MARKETS

Cattle market keeps the firm pace

With still a rather moderate offer, cattle prices remained firm during the past week. General steers are paid US$/kg 3.00 cw, while EU-traced animals get US$/kg 3.10 cw. Bookings don’t go beyond four or five days, a Paraguayan industrialist told WBR.

A widely spread frost occurred on Tuesday morning and forecasts announce another today and that could play in favour of a higher cattle supply, the source indicated. Anyway, there are some uncertainties about the cattle availability to be expected in the post-season that starts on 15 August. (/site/index.php/en/component/banners/click/83)

North America US says no timeline to restore Brazil beef imports

Brazil needs to make progress on inspections before any timeline can be set to end a US ban on imports of fresh Brazilian beef, the US agriculture secretary said on Monday. Agriculture Secretary Sonny Perdue and his Brazilian counterpart Blairo Maggi met in Washington, D.C. on Monday to discuss the ban that went into effect on June 22. The United States has said a high percentage of beef shipments from Brazil did not pass safety checks.

After the meeting, Brazil's Ministry of Agriculture released a recording of Maggi's remarks in which he said the United States could lift a ban on imports of fresh Brazilian beef in 30 to 60 days but the final decision would be made after analysis of information presented by Brazil.

Perdue said in a statement that Maggi had pressed for a timeline for restoring imports of fresh Brazilian beef to the United States, but he said any timeline would depend upon progress being made by Brazil. JBS Food Canada reaches agreement to sell Alberta feed yard

JBS Food Canada Inc. has reached an agreement to sell Lakeside Feeders, its beef cattle feed yard and adjacent farmland in Brooks, Alberta, Canada, to MCF Holdings Ltd for around US$ 40 million. Completion of the transaction is subject to regulatory review and approval, Urner Barry said.

Under terms of the agreement, MCF will continue to supply cattle to the JBS Food Canada beef processing facility in Brooks. MCF anticipates offering employment to current feed yard and farm employees upon closing. JBS Food Canada is a diversified agribusiness involved in the feeding, harvesting and processing of cattle. JBS Food Canada includes one beef packing plant and one feedlot in Brooks, Alberta, farmland adjacent to the Brooks feedlot, and corporate headquarters in Calgary, Alberta. MCF Holdings is a subsidiary of Nilsson Bros. Inc., a livestock-based agricultural business in Alberta. Solid demand for meat favours Cargill’s profit

Global food product operator Cargill Inc. reported past Thursday a strong raise on its quarter profit based on a solid demand for beef and poultry meat and US grain exports. The company, in the second year of a restructuring program, informed that results were better in its four business areas and that income touched a two-year top. “The structural improvements done as well as favourable conditions in some markets have generated strong results”, Cargill’s executive chairman David MacLennan told Reuters. Cargill, with headquarters in Minnesota, reported that net gains increased to US$ 347 million in the quarter ended 31 May, up from the US$ 15 million profit of a year earlier.

MARKETS Higher US fed cattle prices

Packer competition for supply played a role in price ranges of fed cattle moving higher last week. The live animal sold mainly at US$/cwt 120, up from the prior week’s bulk of trade that was US$/cwt 117 to US$/cwt 118. Dressed carcass sales occurred mostly at US$/cwt 190, moving US$/cwt 2 up from week ago, Urner Barry said. Supplies soften US imported beef prices US imported beef prices moved lower last week, primarily the result of increased availability from Australia. The imported 90 CL beef indicator eased US$/¢ 5 from week-ago levels, to US$¢/lb 222 CIF. Australian exporters have been more willing to offer product available for delivery in late August and September, as concerns of limited supplies have somewhat eased recently. Meanwhile, US consumers’ appetite for domestic lean beef remains strong. Steiner Consulting Group reports a growing number of foodservice eateries are increasingly turning to domestic lean beef for their hamburgers, MLA said. Europe

EU meat production to grow just 0.4% in 2017 The European Commission (EC) published the short term food expectations in the EU. In meat production the EC expects 47.26 million tons in 2017, which will signify just a 0.4% increment and 47.33 million tons in 2018. In the particular case of beef, EC estimations include a further growth to 8.21 million tons in 2017 and a livestock reduction in 2018 resulting from the already done adaptation in the dairy sector. Specifically, beef production in 2018 will be around 8.10 million tons. Beef exports have grown 26% in the first four months of this year, the highest volume for the period in the last five years. The EC expects year exports to grow 10% to 268 thsd tons. On its side, EU pork meat production in 2017 will be around 23.44 million tons, something less than in 2016 and with expectations to remain stable in 2018. The reduction may come from higher hog prices across the EU, with values that weren’t seen since 2013, Eurocarne reports.

Oceania MLA expects higher cattle slaughter and exports for 2017 and 2018

For the first time in three years, Australian cattle prices are now lower than year-ago levels while production is higher, resulting in a downward pressure on the market that is expected to continue throughout 2017, says Meat & Livestock Australia’s (MLA) in its cattle industry projections July update. The turning point for Australian beef came in June when eastern states’ slaughter consistently tracked higher than year-ago levels for the first time since 2014, while at the same time, cattle prices dropped below year-ago levels, also for the first time in three years. These trends are likely to remain in place for the remainder of 2017 and have a significant impact on price and production expectations. Female cattle slaughter touched record lows. After the first four months of 2017, female cattle slaughter was just 973,000 head, the lowest since 1995 and representing 45% of the overall adult kill, three percentage points below the 10-year average of 48%.

But adult cattle processed across the eastern states recovered in June and are anticipated to remain above year-ago levels for the rest of 2017. The result is a small revision to the annual total, to be steady with 2016 at 7.25 million head, compared to April estimates of 7.1 million head. Momentum is expected to continue through to 2018, when 7.6 million head are anticipated to be processed.

As a result of the increase in cattle slaughter, combined with heavier carcass weights, 2017 beef and veal production is now estimated to be 2.17 million tons carcass weight (cwt), up 2% year-on-year.

Despite significant shifts in global beef markets, the forecast 2% year-on-year rise in Australian beef production for 2017 should see exports match the 1.02 million tons (swt) shipped in 2016. This would result in the fifth consecutive year above one million tons exported.

Australia: more male slaughter in May

Australian adult cattle slaughter in May totaled just below 700,000 head, up 39% from April but down 5% from the same time last year, MLA reported. It should be noted that three consecutive short trading weeks in April contributed to the considerable rise in cattle processed month-on-month. This took the total for the year-to-date (January-May) to just over 2.8 million head, an 11% decrease year-on-year. On the other hand, male slaughter in May increased 8% from year-ago levels, to almost 375,000 head. Numbers processed for the year-to-date were 6% lower year-on-year, to just under 1.6 million head. Beef and veal production for the month was down 1% from year-ago levels, to just over 200,000 tons carcass weight (cwt), offset by heavier carcass weights. The total for the first five months of 2017 eased 8% year-on-year, to just under 850,000 tons cwt. Asia

China’s GDP in Q2 grew a robust 6.9%, more than expected China’s economy expanded at an annual rate of 6.9% in the second quarter, beating the government’s target as unexpected strength in the property market kept growth humming, informed Financial Times.

The Chinese has now grown 6.9% in the first and second quarters, up from last year’s 6.7% expansion. If the trend continues, 2017 would be the first year in which China’s growth rate accelerated on the preceding since 2010.

In March China’s parliament approved a full-year growth target of “around 6.5%”. “As China goes, so go emerging markets. The solid growth helps recoveries of commodity exporters and keep 2017’s pick-up in global growth on track,” according to Bill Adams, senior international economist at PNC Bank. “The retreat of US long-term interest rates since early 2017 and the Fed’s commitment to a gradual pace of interest rate hikes are maintaining supportive monetary conditions for emerging market growths.”

INTERVIEW

Agr. Carlos Pedretti, member of the Rural Association of Paraguay and chairman of the Mercosur Meat Forum “The Mercosur Meat Forum proposes to fight for 5% of the EU beef market”

Agr. Carlos Pedretti is Chairman of the Mercosur Meat Forum that gathers cattlemen and beef industry unions in the four Mercosur beef exporting countries.

Q. Did the Mercosur Meat Forum agree a proposal on beef quotas to be offered to the European Union in negotiations towards an FTA? The participants in the Forum believe we should fight for a 5% of the EU beef trade. That’s very little, around 370 thsd tons. It won’t harm trade in none of the EU countries with such a small percentage. Q. How would you divide that volume between the four Mercosur exporting countries?

When the Forum got started in 2004, the distribution was agreed based on the past performances of the four countries. Today, those rules are outdated because exports from Paraguay changed completely between 2005 and 2017. Today Paraguay arrives in the main world importers. We only lack three markets where Uruguay arrives: the US, continental China and the EU 481- quota. Paraguay’s position is that the additional volume obtained in the EU should be divided equally between the four countries, 25% for each. Q. Do you think that Uruguay will support the decision to divide in four equal parts?

That is a decision that should be taken formally by Uruguay. Informally, Uruguayan representatives told us they will agree to have the same shares. The proposal includes that, if some of the countries are unable to comply with their entire shares, the unaccomplished volume should be distributed among the other partners. With that point clear, with no one to be harmed, it’s most probable that it could be divided by four.

Q. Is Argentina also sharing that position? Argentina said nothing about it; they said they must consult. But that is what all countries will do. We think that the plan is fair.

Q. Brazil announced its intention to leave FMD vaccination. But in the past weeks outbreaks occurred in Colombia. What is the position of the Forum?

We don’t agree with leaving vaccination. We understand it has no sense, as it has a minimal cost that brings us safety. It’s an insurance that protects our sanitary status, which is the biggest treasure of a beef exporting country. That is, obviously, the intelligent way.

We must take into account that Mercosur includes many jungle areas, like the Pantanal, with many wild animals that could be porters of the virus. The extension and ecological conditions impede an exact control of the whole region.

Besides, today we can enter in all markets with a vaccination status. That is shown by Uruguay that in a very short time will arrive in Japan.

This interview was made by Martin Olaverry and transmitted by CX16 Radio Carve directly from Paraguay.

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