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Mad cow fears drag E.Europe beef demand, prices down

Mad cow fears drag E.Europe beef demand, prices down

East European authorities proclaim the region to be mad cow free, but that has not stopped fear of the disease from depressing beef consumption and prices, analysts said on Monday.

Beef prices in most central and east European states fell by between two and four percent in January compared with December and were seen declining further.

"It's a major problem. Since beef loses the confidence of consumers, the whole livestock sector is in danger," said Czech Agriculture Minister Jan Fencl.

East Europeans say they have escaped bovine spongiform encephalopathy (BSE) mainly because the region's farmers have relied on grazing, which is low cost, rather than meat-and-bone meal which has been blamed for the spread of the disease.

Poland, the Czech Republic, Hungary, Slovakia, Bulgaria, Russia and Ukraine have banned imports of beef, beef products and meat-and-bone meal from countries where BSE hase been found.

Last week, central and east European states agreed to harmonise efforts to keep their countries free of BSE and step up testing to restore consumer confidence in beef. DROP IN BEEF CONSUMPTIONBut losses by Czech farmers due to the decline in beef demand are estimated at up to one billion crowns ($28 million).

"Consumption has seen a massive drop in January, to a third of last year's level. I sold 100 cows a month last year, now it's no more than 30," said Vladimir Zavrel, director of meat distributor Zenap Trading in southeastern Moravia.

Stanislav Stanek, head of the association of meat breeders in the Czech Agricultural Chamber, said:

"This is the worst timing. Cattle have been taken from pastures and the meat is ready for slaughter, but no one is buying it, not even at ridiculously low prices."

In Poland, demand is down and prices fell by four percent in January.

"Beef is not as popular on Polish tables as other kinds of meat, but worries over BSE discourage people from buying," said Witold Choinski, head of the Warsaw office of the Association of Polish Meat Producers, Importers and Exporters.

Last year, consumption of beef in Poland was 7.5 kg per person, of poultry 14 kg and of pork 39 kg.

The Slovak Agrarian Market Information (ATIS) said the BSE crisis had made an impact on Slovakia's demand for beef.

"Supply is exceeding demand...In the short term, a significant fall in the price of cattle is expected," ATIS said.

But the Slovak Food and Agriculture Chamber attributed a recent slump in beef sales and a 1.8-percent decline in prices to a typical post-Christmas decline.

Hungarian demand for beef has also dropped, said Andras Krajcsovicz, chief executive officer of farm company Friz Tej Rt.

Krajcsovicz said he saw no future in breeding meat cattle in Hungary, despite farm ministry plans to boost their number.

Hungary's beef consumption has been stagnating at around 4.5 kgs per capita for years, down from 7.0 kgs in the 1980s.

Russia relies heavily on meat imports and some Russians are scared of eating contaminated food although the authorities say the country has so far avoided BSE.

"We're already getting calls from meat factories asking for checks so they can label their products clean," Sergei Rybakov of the All-Russian Research Institute for Animal Health said.

Russia imported around 1.2 million tonnes of all kinds of meat last year, while total consumption was around six million tonnes, according to figures from the Russian Meat Union.

BULGARIAN BEEF PRICES UP ON DEFICIT, EXPORT DEMANDIn contrast to most other states, Bulgarian beef prices rose some five precent in early February compared with January, despite steadily declining consumption.

Prices were set to jump another 10 percent by April, traders and meat prosessors said. "Beef prices are likely to rise further due to a monthly deficit of 3,000 tonnes caused by the import ban and intense exports of calves to the Middle East," said Meat Processors Association's Executive Director Ira Pavlova.

Bulgaria exported 39,120 calves in January-November last year, compared with 7,410 in 1999 and 2,162 in 1998.

Traders said export demand for Bulgarian calves rose because the country's 682,000 cattle were considered free of BSE.

PORK, POULTRY PRICES MAY RISE

Analysts say pork and poultry prices in some east European states may rise due to a shift in consumption after the traditional post-Christmas slump in meat sales is over.

As pork and poultry consumption is already high in the region there is little scope for major further price increases in these commodities, but some movement is evident.

The Czech statistical bureau said retail sales of poultry rose by 3.7 percent month on month in January.

In Poland, pork was stable but poultry edged up 1.4 percent month-on-month in January.

Prices of turkey have shown a significant rise in Hungary recently, according to the local Livestock Farmers Association.

Bulgaria's pork prices rose 1.9 percent in January, month-on-month, and jumped another eight percent in February, traders said.

(Additional reporting by Alan Crosby in Prague, Krisztina Than in Budapest, Juraj Draxler in Bratislava, Ewa Krukowska in Warsaw, Pavel Polityuk in Kiev and Samantha Shields in Moscow).


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