Meatpacker JBS suspends Brazil beef output amid import bans

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SAO PAULO (Reuters) - Brazil's JBS SA JBSS3.SA, the world's biggest meatpacking company, announced on Thursday that it had suspended beef production at 33 of its 36 plants amid the corruption scandal that has caused some of the country's biggest export markets to ban Brazilian meats.

Agriculture Minister Blairo Maggi said a police investigation, which alleges that meat processors paid bribes for inspectors to turn a blind eye to unsanitary or irregular activity, was exaggerated and wrongly challenged the quality of one of the country’s most important exports.

But it has battered demand for Brazilian meats since Friday nonetheless.

JBS and BRF SA BRFS3.SA, the world's largest poultry exporter, are among dozens of firms targeted in the meatpacking industry investigation by Brazil's Federal Police. Both companies have denied any wrongdoing.

Egypt became the latest country to halt imports of Brazilian meat on Thursday.

The move followed partial or complete bans by China, Mexico, Canada, the European Union, Saudi Arabia, Japan, Switzerland, Hong Kong and Chile over the past week.

Australia is expected to seize on China’s suspension of meat imports from Brazil, the world’s biggest beef and poultry exporter, to clinch a deal soon on beef exports.

JBS shares fell 1 percent in Sao Paulo on Thursday, accumulating a 10 percent drop over the past week.

The meatpacker said its Brazilian plants would resume production next week at about two thirds of capacity, adding that the company is focused on maintaining employment of its 125,000 workers in Brazil.

Reporting by Tatiana Bautzer and Brad Haynes; Additional reporting by Anthony Boadle in Brasilia; Editing by Sandra Maler and Tom Brown