(Recasts with Argentina and Chile context, background, changes
dateline, previous BRASILIA)
By Caroline Stauffer and Silvio Cascione
SAO PAULO/BRASILIA Aug 7 Russia's ban on many
western food products presents a massive opportunity for meat
and grain exports from agricultural powerhouse Brazil and a
smaller one for its Latin American neighbors.
Around 90 new meat plants in Brazil were immediately
approved to export beef, chicken and pork to Russia and the
South American nation is already working to increase its exports
of corn and soybeans sales to Russian buyers, Brazil's secretary
of agricultural policy, Seneri Paludo, said on Thursday.
Brazil's enthusiasm for Russia comes as Moscow's relations
with the rest of the West are at Cold War-era lows. Russia
banned all imports of U.S. food products and certain goods from
the European Union, Australia, Canada and Norway after President
Vladimir Putin ordered retaliation for sanctions against Moscow
over the Ukraine crisis.
In a further snub to Washington, U.S. intelligence
contractor Edward Snowden was granted a three-year residence
permit in Russia, his lawyer said on Thursday. Brazil's
relations with Washington also cooled after revelations last
year that the United States spied on President Dilma Rousseff's
As the world's top exporter of beef, chicken and soybeans,
and one of the only countries in the world with land available
to ramp up agricultural production, Brazil is a clear winner
from the embargo. But smaller countries like Argentina and Chile
could benefit, too.
"Russia has huge potential as a consumer of agricultural
commodities," Paludo told journalists in Brasilia, comparing the
"window" opened by the embargo to the "revolution" that Brazil's
exports experienced when China's commodities market opened a
Brazil's beef association Abiec said 58 of the 90 plants
were for beef - 27 for fresh meat, and 31 for processed.
Brazilian food companies, like chicken exporter BRF SA
and meat packer JBS SA, stand to benefit.
The companies did not immediately respond to requests for
JBS has businesses in the United States and Mexico as well
as Brazil but it does not sell U.S. beef to Russia.
Beef products topped Brazil's exports to Russia in the first
six months of the year, Brazilian trade data showed. Brazil
ships the vast majority of its soybeans to China and sent just
352,849 tonnes of soy to Russia between January and June.
The president of Brazil's animal protein association ABPA
said on Wednesday Brazil could cover U.S. chicken exports to
Russia and would increase exports by 150,000 tonnes per year,
though increasing pork exports would be harder.
Hong Kong replaced Russia as the top buyer of Brazilian beef
in 2013 but beef association Abiec said exports to Russia "were
certain to rise" in the second half of the year.
Brazil's other agricultural exports to Russia include sugar,
coffee, orange juice and bananas. In 2013, agricultural exports
to Russia were worth $2.72 billion.
MOSCOW STOCKING UP
In Moscow on Thursday, the middle and upper classes browsed
through aisles neatly stacked with French cheeses, Australian
wines and Spanish cured meats, in what may mark a last chance to
stock up on all luxury goods except caviar for at least a year
while the import ban lasts.
Chile, a possible alternative for European fruit, exported
$643 million of goods to Russia in 2013, mainly in processed
foods, salmon and fruit, the government's trade body said. It
declined to say if Chile is one of the countries in talks with
Russia's animal health body.
Sergio Mendes, director for Brazil's cereal exporter's
association Anec, said Brazil would need "a good bilateral
agreement" with Russia before grain exporting companies would
ship significant quantities of soy and corn there.
"The main barriers are relating to crop pests and
bureaucracy," he told Reuters. Only a few specialized companies
were currently exporting soy to Russia, Mendes said, though he
acknowledged that Brazil is perhaps the only country that could
substantially increase production if Russia's demand peaks.
Grain traders in Argentina said Brazil would benefit most
from the food bans, though there may be a residual impact for
Argentine commodities if Brazilian supplies aren't enough to
satisfy Russia's need for grains, which they said was unlikely.
"The biggest opportunities will likely be for oils and meals
rather than grains, but we think that Russia will turn to Brazil
as a supplier first, given that Brazil is part of BRICS," said
one trader, referring to the economic bloc that also includes
Russia, India, China and South Africa.
Russia has only bought small amounts of Argentine soymeal
and soybeans in recent years, according to data from the
(Additional reporting by Rosalba O'Brien and Anthony Esposito
in Santiago, Maximiliano Rizzi in Buenos Aires and Fabiola Gomes
in Sao Paulo; Editing by Todd Benson, Bernard Orr)