Sat, Dec 27, 2003 page12

• Japan bans all US beef products

  BARRED MARKET After a laboratory in the UK confirmed that a cow from Washington state had BSE, Japan banned both raw beef and also processed foods containing beef

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  Japan, the biggest importer of US beef, said it will ban imports of the meat and order a recall of meat already in the country after a laboratory in the UK confirmed a cow from Washington state tested positive for mad cow disease.

  Japan will also ban processed products containing US beef, the Health, Labor and Welfare Ministry said in a statement. US beef has been barred from its three biggest export markets -- Japan, South Korea and Mexico -- and 10,410 pounds of raw meat have been recalled in the US.

  Mad cow disease has been linked to contaminated animal feed and the US hasn't provided details on the source of the feed fed to the Washington state cow or whether that feed is shipped elsewhere in the US, an official at Japan's agricultural ministry said earlier today, who declined to be named.

  The laboratory in Waybridge, England, yesterday confirmed US tests announced on Tuesday that found the cow had the disease, the US Department of Agriculture said in a statement.

  "We consider this confirm-ation," department spokeswoman Alisa Harrison said in an interview.

  The disease, known as bovine spongiform encephalopathy, or BSE, has been linked to a lethal brain-wasting disease in humans that was blamed for 120 deaths, mostly in Britain. The UK killed millions of animals to eradicate mad cow disease, which surfaced in herds in 1986.

  The US yesterday urged Japan, the biggest buyer of its beef, to lift the temporary suspension on imports of the meat imposed earlier this week.

  "All beef products that we provide to Japan are safe," the US Embassy in Tokyo said in a faxed statement. "Japan is a valued customer for US beef exports with an annual trade at US$1.8 billion."

  The US$175 billion US beef industry, the world's largest exporter of beef and related products, may face billions of dollars in losses if consumers shun the meat.

  US cattle producers can expect to lose as much as US$3 billion if exports are halted for six months, and that period "is the best we can hope for," said Chris Hurt, a professor of agricultural economics at Purdue University in West Lafayette, Indiana.

  Overseas markets account for about 10 percent of US beef sales, and dumping that meat into the domestic market will slash prices 12 percent to 16 percent, Purdue University's Hurt said.

  Japan probably will demand that the US test every animal for the disease before slaughter, Hurt said.

  Japanese consumption of beef dropped after the nation's first case of mad cow disease was confirmed in September 2001, eroding US$2 billion of combined annual sales for US, Australian, New Zealand and Canadian exporters.

  Japan, South Korea and Mexico accounted for 89 percent of US beef exports this year through Dec. 11, according to US Agriculture Department statistics. Japan imported 251,200 tonnes, South Korea imported 218,100 tonnes and Mexico bought 196,100 tonnes.

  Shares in McDonald's Holdings Co Japan Ltd fell as much as 4.3 percent today to ?1,990, for a three-day drop of 10 percent. Even though the hamburger restaurant gets all of its burger beef from Australia, investors are concerned Japan's suspension of US beef imports will raise prices.

  Shares of McDonald's, the world's biggest hamburger-restaurant chain, fell US$1.32, or 5.2 percent, to US$23.96 in New York Stock Exchange trading Wednesday. The market was closed yesterday for the Christmas holiday. Tyson, the world's largest meat processor, dropped US$1.08, or 7.7 percent, to US$12.90.
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