UPDATE 2-Egypt bans some Brazil beef, Russia undecided after BSE

Mon Dec 17, 2012 3:21pm EST

* Partial bans may indicate limited trade fallout

* Analyst says Brazil beef exports to keep growing

* Three minor importer countries ban Brazil beef

By Reese Ewing and Melissa Akin

SAO PAULO/SKOLKOVO, Russia, Dec 17 (Reuters) - Egypt, the third-largest importer of Brazilian beef, banned purchases from Parana state where a case of atypical mad cow disease was confirmed this month, Brazil's agriculture ministry said on Monday, while Russian authorities mull a similar move.

Yet, both foreign markets are likely to continue to buy large volumes of beef from other Brazilian states, underscoring the still-limited impact of the atypical case of bovine spongiform encephalopathy (BSE), commonly called mad cow disease, on Brazil's grass-fed beef industry.

Russia, Hong Kong and Egypt, which took more than half of the 896,000 tonnes of beef that Brazil has exported this year through September, continue to import its beef. Hong Kong has so far imposed no restriction on imports of Brazilian beef.

The head of Russia's VPSS animal and food safety agency said on Monday it was unlikely to ban all Brazilian beef imports over BSE concerns, but if restrictions were imposed, they would more likely apply only to Parana state where the sample originated.

Brazil is the world's largest supplier of beef.

"We are analyzing the data now but we do not see enough grounds to place import restrictions on the whole country," Sergei Dankvert told Reuters on the sidelines of a meeting with Italian diplomats in Skolkovo, Russia on Monday.

Russia has not imported Brazilian beef, chicken or pork from Parana, Rio Grande do Sul or Mato Grosso states for about a year, after it closed imports from those states over sanitary concerns. Russia still imported more than 212,000 tonnes of beef over the first nine months of 2012 from other states in Brazil.

Brazil's agriculture ministry confirmed Egypt's suspension of beef purchases in an email to Reuters after the Valor Economico newspaper reported earlier in the day that Brazil's embassy in Cairo was verbally notified by Egyptian authorities.

Egypt bought more than 99,000 tonnes of beef through September from Brazil.

So far only Japan, China and South Africa have halted imports of all Brazilian beef since Brazil announced on Dec. 7 that a 13-year-old cow that died in 2010 in Parana tested positive for the protein linked to the development of BSE.

These countries are all minor importers of Brazilian beef.

"It's easy to restrict beef imports at this time of year when trade flows slow down," said Mauricio Palma Nogueira, the head of local beef and dairy consultancy Bigma. "Most likely, Brazil will see continued growth in annual beef exports."

The elderly cow, which was kept for breeding purposes, never developed BSE and died of other causes. But it tested positive for the causal agent for BSE, a protein called a prion, which can arise spontaneously in elderly cattle.

In this condition, which was confirmed by the World Animal Health Organization (OIE), animals are classified as having 'atypical BSE,' which may or may not go on to cause the BSE disease, Brazilian agriculture officials said.

A similar case of atypical BSE occurred in the United States in April. Like the Brazilian cow, that animal never entered the food chain bu t th e United States managed to avoid any restrictions on its beef exports.

Brazil's 200-million-head cattle herd is almost entirely pasture raised until the final few weeks before slaughter, when the cattle are confined and fattened on feeds.

It is a very different system of beef production than that which led to the mad-cow disease outbreak in Europe in the 1980s and 1990s, where animals were fed remains of other animals including brain and nervous system tissue which sometimes carried prions that cause the disease.

Nervous system tissue is removed and incinerated from Brazilian cattle during processing at its meat plants.

"If you look hard enough, you'll find prions in herds anywhere in the world," said Nogueira. "With the OIE keeping Brazil at minimal risk and the cow never having manifested the disease, Brazil will likely follow the course of the United States with little impact on exports."

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