Russia bans US beef, pork imports over ractopamine

Beef Central, 31/01/2013

Russia has announced it will ban imports of US beef and pork from February 11, threatening a trade worth about $500 million a year to US cattle and pig producers.

Russia’s veterinary and quarantine authority Rosselkhoznadzor said it had imposed the ban after the US Food Safety and Inspection Service could not guarantee that future shipments of US beef and pork would be free of the feed additive ractopamine.

Ractopamine is used to promote leanness in meat-producing animals, and is known to increase the rate of weight gain, improve feed efficiency and increase carcase leanness. Countries such as Russia and China have banned its use on animal and food safety grounds, while US authorities argue that scientific evidence shows it is safe to use. The United Nations has agreed on acceptable levels of the drug.

Earlier this month Russia warned countries that use ractopamine, including the US, Brazil, Mexico and Canada, that imports into Russia would be inadmissible if they contained ractopamine.

“The USA is the only one country that has taken no measures to ensure compliance with said requirement,"Rosselkhoznadzor said in a statement foreshadowing the ban this week.

The US shipped 39,000 tonnes of chilled and frozen beef to Russia in 2011, representing 6.5pc of total imports, and 59,680 metric tons of pork, or almost 9 percent of total imports, according to customs authorities quoted by the Bloomberg news service.

The Voice of Russia news outlet said the move was the latest in a series of trade disputes that had triggered concerns among analysts that US-Russia relations were falling into “a Cold War pattern of tit-for-tat”.

“Since Vladimir Putin returned to the Kremlin as president last May, Russia has taken a series of anti-American steps. In recent months, his government has ended USAID programs in Russia and banned adoptions of Russian children by American parents,” the Voice of Russia reported.

“Russia on Wednesday banned imports of American meat and pulled out of an agreement with the US on law enforcement and drug control.

“The measures were widely seen as retaliation for a new American law that bans alleged Russian human rights violators from receiving US visas or opening US bank accounts.”

Canada has indicated it will be able to satisfy Russia’s ractopamine requirements from February 28, but will be subject to the same restrictions as the US until that date.

Australian beef exports to Russia slowed throughout 2012, according to Meat & Livestock Australia, with total exports down 41pc on 2011 to 32,162 tonnes swt.

MLA said that after two strong years for Australian beef shipments into the Russian market, 2012 saw a combination of factors contribute to a slower year.

“A significant depreciation in the Brazilian exchange rate, cheap product coming out of Paraguay, and resurgence in Australian manufacturing beef exports to the US manifested in reduced volumes to Russia.”

Although overall export volumes declined, the market for Australian beef can be broken into two distinct markets, chilled product and frozen product.

The vast majority of beef shipments to Russia are frozen (97pc in 2012); with Australian beef largely used for further processing. This beef competes with South American product directly, with importers very price sensitive, leaving Australian product exposed to any price decreases from South American suppliers.

High quality chilled beef, mostly going into high end steakhouses, has largely avoided the competitiveness issues associated with frozen beef. Australian chilled beef exports to Russia throughout 2012 totalled 1,109 tonnes swt, a 9pc increase on 2011 and 11pc above the five year average of 998 tonnes swt.

Australian chilled product competes for the most part with US product in the high end steakhouse market.

Russian imports of chilled US beef in 2012, January to September, totalled 816 tonnes, while imports from Australia for the same time period stood at 768 tonnes (Global Trade Atlas).

MLA also noted earlier this month that Russia’s recent succession to the World Trade Organisation (WTO) should ensure that market access (excluding technical issues) for beef and sheepmeat remains at least at stable levels over coming years.

In 2013, the overall quota for frozen beef remains unchanged, at 530,000 tonnes. Australia has access to 407,000 tonnes of this frozen quota, shared with other WTO countries, while the US (60,000 tonnes), EU (60,000 tonnes) and Costa-Rica (3,000 tonnes) all have separate access to the frozen quota.

The quota for chilled beef is set to increase in 2013, from 30,000 tonnes to 40,000 tonnes. The EU has access to 29,000 tonnes of this chilled quota, while access for other countries is set to increase from 1,000 tonnes to 11,000 tonnes.

“This will provide increased access for Australian chilled beef into the Russian market.

“Currently, chilled beef shipped to Russia outside of this quota and not classified as ‘High Quality Beef’, attract a 50% tariff. High quality beef, currently defined as any beef entering Russia at greater than €8/kg, attracts a 15% tariff, with most Australian chilled product entering under this arrangement.”


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