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Randall Parker Food Group

Freight Price Hike to Hit Meat Trade

Pending increases in freight prices threaten to hit EU food exporters’ profits by up to €10m per year and could lead to many companies withdrawing from selling to non-EU countries.

All of the major deep sea shipping companies are set to apply a $1,500 (€1,845) per container price increase for refrigerated goods at the start of January — upping the average container price for exporters of agri-food and fish from $3,000 to $4,500.

The move is being led by Danish shipping line, Maersk, which handles 40% of Irish food and fish exports to destinations outside the EU; but is being followed by all of its competitors.

The price increase, a pan- European policy, is aimed at alleviating losses on refrigerated container transport outside of Europe.

But the Irish Exporters Association (IEA) has said if the prices need correcting, they should be phased in over a period of time, rather than brought in at once.

The association also said that the increase will hit Irish firms hard — with many seeing their bottom line being hit by between €5m and €10m per annum, forcing many to stop exporting to non-EU nations.

“This will impact heavily on all Irish agri-food and fish exporters, who use these shipping lines for exports outside the EU; and will add an estimated 10% to their export costs.

“This is not an increase that can be passed on and will, inevitably, lead to lost export sales,” said IEA chief executive John Whelan.

The IEA estimates about €200m worth of annual meat exports from Ireland to non-EU countries will be affected by the price hike, with that figure coming to €330m and €86m, for dairy and fish exports, respectively.

Last year, China was the most important market for pork exporters; with the Chinese consuming half of the world’s pork products.

The IEA has met with the major shipping lines and has written to Agriculture Minister Simon Coveney, and Transport Minister Leo Varadkar, urging them to raise the matter at EU level.

“There are strong indicators of cartel action and restrictive business practices involved with a similar price increase across the majority of deep sea shipping lines. This anti- competitive practice, which is in violation of EU laws, must be stamped out,” Mr Whelan said.

via Freight price hike to hit exporters | Irish Examiner.

Russia, the largest buyer of Brazilian beef, is unlikely to ban all beef imports from Brazil due to a suspected case of atypical bovine spongiform encephalitis, the head of Russia’s veterinary and phytosanitary service said.

“We are analysing the data now, but we do not see enough grounds to place import restrictions on the whole country,” Sergei Dankvert said in an interview on the sidelines of a meeting with Italian diplomats.

China, South Africa and Japan suspended beef imports from the world’s top meat exporter while seeking details about the death of an elderly cow in 2010, which never actually developed the disease. None of these countries are significant buyers of Brazilian beef.

Dankvert said that if restrictions were imposed, they would most likely apply to the state where the sample originated.

Atypical BSE can arise in elderly cattle due to a spontaneous genetic mutation that causes the animals to begin producing distorted proteins known as prions. The proteins can trigger BSE, which eventually destroys the animal’s nervous system, and it is believed humans ingesting beef from a stricken animal can contract a fatal form of the disease.

A 13-year-old cow in southern Brazil tested positive for prions, a result confirmed by the World Organization for Animal Health (OIE) last week. But it died of other causes in 2010 and never actually developed the disease.

The animal was buried on the farm where it had been used for breeding purposes and never entered the food chain.

Russia, meanwhile, is also monitoring imported U.S. pork and beef for ractopamine, a feed additive, but has not turned away any meat since the monitoring regime was imposed, Dankvert added.

Russia stepped up tests last week on U.S. and Canadian meat imports for traces of the additive and demanded that both nations certify their meat as ractopamine-free. U.S. exports alone to Russia are worth about $500 million.

Ractopamine is in a class of drugs known as beta inhibitors or blockers that counteract the effects of adrenaline on the nervous system and slow the heart rate. In livestock, it promotes muscle gain.

via UPDATE 1-Russia unlikely to ban Brazilian beef | Reuters.

Russian health regulators announced formidable new barriers to the import of meat from the United States late on Friday, in a move some analysts saw as retaliation for American legislation punishing Russian officials linked to human rights violations.

The new Russian regulation requires imported meat to undergo testing for and be certified free of ractopamine, which is added to animal feed in the United States to make meat more lean.

The United States Department of Agriculture considers ractopamine safe and does not test for it. The United States exports about $500 million worth of beef and pork to Russia.

A notice published on the regulator’s Web site on Friday said the regulation would go into force immediately, and that during an unspecified “transition period” Russia will conduct its own testing. After the transition period ends, foreign countries will be required to certify their meat exports as ractopamine-free.

The announcement came hours after the Senate passed the so-called Magnitsky Act, which will deny visas and freeze assets of Russian officials who have been linked to the death of Sergei L. Magnitsky. Mr. Magnitsky was detained after accusing Russian officials of embezzlement and died in a Moscow detention center in November 2009.

Gennady Onishchenko, Russia’s chief health inspector, responded indignantly to the notion that the ractopamine ban was politically motivated or linked to the Magnitsky Act.

Mr. Onishchenko said there were serious questions about the effects of ractopamine.

“For instance, use of ractopamine is accompanied by a reduction in body mass, suppression of reproductive function, increase of mastitis in dairy herds, which leads to a steep decline in the quality and safety of milk,” he told Interfax on Saturday.

The United States Department of Agriculture on Friday asked Russia to suspend the requirement, saying it could effectively halt beef and pork exports to Russia.

American trade and economic officials are expected to travel to Moscow this week to urge the government to postpone the new requirement.

via Russia Announces Barriers on Imports of U.S. Meat – NYTimes.com.