MercoPress. South Atlantic News Agency

Brazilian FAM pushes beef prices in Chile

The consequences of the foot and mouth outbreaks in Brazil are already being anticipated in Chile and particularly Punta Arenas where beef prices are expected to undergo an increase of up to 20%.

On hearing of the FAM cases, Chile's Livestock sanitary services immediately banned the import of all Brazilian beef. But Chile's beef demand is 55% supplied from overseas, of which 60% from Brazil and 27% from Argentina, meaning the market will be approximately 33% short.

However the situation is even more complicated in Magallanes Region which imports 200 to 240 tons of beef monthly, 70% from Brazil, and "I can't see Argentina filling the gap", admitted Francisco Cresp, head of Central de Carnes one of the main importers.

"Although we have a good stock, we can't anticipate what will happen in December, which will have an impact in prices, probably a 20% increase".

Ramon Jacob manager of Abu-Gosch supermarkets said the ban will not have a supply impact in their stores because "we buy all our beef, high quality, from Argentina". However he admitted that "prices will suffer".

Ricardo Salles from the Free Zone Chamber praised the Chilean government's decision to ban imports "because it cost the country 35 years to eliminate the disease and at a savage cost". But consumers will suffer because the Brazilian beef acted as "a price regulator" and "imported beef was one of the more accessible options for consumers".

Anyhow the "Brazil factor" is expected to have a price impact in Argentina beef and other possible sources are limited. Paraguayan beef is banned from crossing Argentine territory and Uruguay "protects its trucking transport system".

"Only trucks certified by Uruguayan officials can load beef in Uruguay, so in most cases you end having to use Uruguayan transport which is dearer", explained Mr. Cresp.