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WTO NEWS: 1996 PRESS RELEASES

PRESS/59
18 November 1996

No recovery in sight this year for World Beef Market says WTO secretariat report

The world market for beef is in a depressed state with prices sharply lower in the major markets, and no recovery is in sight this year. The key questions overhanging the market are the impact of the “mad cow” disease on international trade and the pace of cattle liquidation in the United States. Offering possible respite to exporters is expected strong import demand from Japan, Korea and the Russian Federation.

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These are among the findings contained in WTO's annual report The International Market For Meats 1995/96 today. The report, prepared by the Secretariat in accordance with the International Bovine Meat Agreement, presents a summary of the international situation and outlook for bovine meat and specific elements of the world beef economy on a country-by-country basis as well as summaries of the situation and outlook for pigmeat, poultry meat and sheepmeat.

Among the highlights of the report are the following:

-     In the European Communities, beef consumption has dropped sharply since the outbreak of the “mad cow” crisis with consumers turning to chicken, pork and lamb. EC intervention stocks, which were virtually zero at the beginning of the year, have begun to build up again. The EC is in the process of implementing a number of measures to restore consumer confidence and to rebalance the beef market.

-     The United States is expected to become a net exporter of beef in volume terms this year for the first time since 1945 as a result of low domestic prices and favourable exchange rate movements.

-     Low beef prices in the United States have contributed to Australia and New Zealand not being able to take full advantage of wider market access for beef in the United States resulting from the Uruguay Round. Australian producers also suffered from drought. On the other hand, New Zealand has been able to raise its market share in Korea and Japan, in part at the expense of Australia.

-    In South America, Argentina's beef industry is going through a difficult phase as a result of adverse weather conditions, declining domestic consumption and lower shipments to the EC, its major overseas customer, due to the "mad cow" crisis. On the other hand, beef exports of Brazil and Uruguay are expected to expand.

-    In Asia, beef imports of Korea and Japan are expected to continue to grow at double-digit rates. This year, Japan is expected to take over as the number one beef importer in the world, a position held for many years by the United States.

-    In the WTO, two panels have been established this year to look into, respectively, complaints by the United States and Canada against EC measures prohibiting the importation of livestock and meat from livestock that have been treated with substances having a hormonal action. The panel requested by the United States was established in May, and that of Canada in October.

The International Markets for Meat 1995/96 is now available in English from the WTO Secretariat, Price: SwF15.- The French and Spanish editions will be available shortly.

World beef trade estimate for 1996

Major importers Major exporters
Country 1995

('000 tons)

1996

('000 tons)

1996/95

(% Change)

Country 1995

('000 tons)

1996

('000 tons)

1996/95

(% Change)

Japan* 940 1,030 10 Australia* 1,090 1,080 - 1
United States 954 943 - 1 EC (15)* 1,006 1,000 -
EC (15) 460 450 - 2 United States 826 962 16½
Russia 420 440 5 New Zealand 522 510 - 2½
Brazil 300 250 - 16½ Argentina 513 425 - 17
Korea 197 230 17 Brazil 210 290 38
Canada 256 210 - 18 Canada 224 285 27
Egypt 145 150 Uruguay 143 180 26

Notes: Beef and veal, in metric tons, carcass weight equivalent.

    *WTO Secretariat estimates.

Source: AMLC, FAO, UK Meat and Livestock Commission, USDA, WTO.

Note to editors:

The International Bovine Meat Agreement entered into effect on 1 January 1995. It replaced the GATT Arrangement Regarding Bovine Meat (1980-1994). The following are Parties to the Agreement: Argentina, Australia, Brazil, Bulgaria, Canada, Colombia, the European Communities (15), Japan, New Zealand, Norway, Paraguay, Romania, South Africa, Switzerland, the United States and Uruguay.

The primary objectives of the Agreement, like its predecessor, are to promote the expansion, liberalization and stability of the international meat and livestock market by improving the international framework of world trade to the benefit of consumers and producers, importers and exporters; to encourage greater international cooperation in all aspects affecting trade in bovine meat and live animals; and to secure additional benefits for the international trade of developing countries in bovine meat and live animals.