JBS says Brazil beef exports to U.S. competitive despite tax

SAO PAULO (Reuters) - Brazilian fresh beef exports to the United States will be competitive even if subject to a 26.4 percent duty when shipped outside of a tax-free quota, Miguel Gularte, the head of JBS Mercosur, said on Friday.

The official, who is in charge of meatpacker JBS SA’s division for the trade bloc formed by Brazil, Argentina, Paraguay, Uruguay and Venezuela, believes the United States will be among the five key markets for Brazilian fresh beef as soon as 2017.

Brazil and the United States last month concluded a deal to allow for bilateral trade of fresh beef. As part of the deal, Brazil was included in a duty-free quota of 64,800 tonnes per year with other countries.

“When the quota is over, deals will still be made on a regular basis,” said Gularte, adding that sellers and buyers might adjust prices given the 26.4 percent tax to be charged.

Brazilian meatpacker Marfrig Global Foods SA, a JBS rival, announced on Sunday that it had shipped its first cargo of fresh beef to the United States, saying it was the first trade of that type ever done.

One day later, JBS SA said a container had left one of its plants heading to the American market.

Gularte said he expects Brazil to ship some 20,000 tonnes of beef to the United States this year.

“Next year, when more plants would be cleared to export, the quota should be filled,” he said.

The JBS official believes Brazilian producers will have a larger market selling beef for companies making hamburgers in the United States, since there is no shortage of that type of meat in Brazil.

He said JBS’ presence in the U.S. market should favor a larger trade flow between the two countries.

“We have a consolidated operation in the U.S., a varied and important client base. Clearly it will be easier for us to sell Brazilian fresh beef in that market,” Gularte said.

Reporting by Marcelo Teixeira, editing by G Crosse