Russian Ban Surprises Brazil Beef Industry, Regulators

Brazil’s beef industry and its regulators were taken by surprise when Russia announced a temporary ban on imports of animal produce from three Brazilian states, citing sanitary concerns.

Officials at Brazilian industry trade groups said they didn’t know why Russia slapped the embargo on the states of Mato Grosso, Paraná and Rio Grande do Sul. Brazil’s Agriculture Ministry said in a news release that it received the news “with astonishment.”

“For the second time, the notification arrived without the technical report of Russian inspections made in Brazil even being sent to the Brazilian government,” Agricultural Protection Secretary Francisco Jardim said in the statement Thursday. He added that the alleged problems behind the ban have been dealt with, “reinforcing the feeling that there are other motives for the Russian decision, beyond technical factors.”

In the past, Russia periodically has blocked entry of beef from Brazil, the world’s largest exporter, citing health or safety concerns. The European Union also has banned imports of Brazilian beef in recent years.

According to the AFP news agency, Russia’s agricultural inspection agency on Thursday said it had uncovered lax enforcement of Russian sanitary requirements during an inspection in April. Brazil’s Agriculture Ministry said statements by a Russian spokesman about the presence of bacteria and parasites in Brazilian meat were “completely void of scientific substance.”

Brazilian meatpacker JBS SA said the ban hit three of its slaughterhouses but added that the company will continue to supply Russia from other plants in Brazil and abroad.

“JBS will maintain its exports to Russia from another eight factories operating in Brazil in regions that weren’t affected by the embargo, as well as from the production platform located outside the country,” the company said.

An agribusiness analyst at a major foreign bank said JBS rivals Brasil Foods and Marfrig Alimentos SA also have facilities in the affected states. Like JBS, the other companies should be able to shift their production to meat-packing plants in other states.

“This is not the first time the Russians have done this, or the last time,” the analyst said, noting that Russia accounts for about 10% of the three companies’ total exports, on average.

The ban may have been motivated by domestic issues such as an oversupply of beef in the Russian market, the analyst said, speaking on a condition of anonymity because he hadn’t sought clearance to talk about the subject.

“They tend to use sanitary reasons as an excuse,” he said. “At the end of the day, there’s no issue.”

Also Thursday, the European Commission demanded that Russia explain a “disproportionate” decision to ban imports of fresh vegetables from European Union countries in response to a deadly outbreak of the bacteria E. coli.

The director of Russia’s consumer-protection agency said the ban had taken effect on Thursday morning and all vegetables already shipped in from the European Union would be seized across Russia, AFP reported.