By Ana Mano and Marcela Ayres
SAO PAULO (Reuters) -Ongoing talks to open the Japanese market to Brazilian beef are focusing on supplies from three small Brazilian exporting states, upsetting other parts of the South American country’s industry that are eager to reach the high-paying customers, according to multiple sources.
Brazil, the world’s biggest beef exporter, has tried for two decades to crack the Japanese market without success. A deal would give Japan an alternative to its top suppliers, the United States and Australia, at a time when U.S. tariffs are reshaping global food trade.
Negotiations gained momentum after a state visit of Brazil’s President Luiz Inacio Lula da Silva in March to Japan, one of the world’s largest beef importers.
But the current state of talks, which focus on states representing less than 4% of Brazil’s exports by volume, worries meatpackers in the big beef-producing states of Sao Paulo, Mato Grosso, Mato Grosso do Sul, and Para.
Together, they accounted for nearly 60% of Brazil’s total beef exports, or 1.72 million metric tons last year.
A Brazilian government memo, issued after a technical visit by Japanese officials in June, showed Brasília answered “a questionnaire for the import of beef from the southern part of the Republic Federation of Brazil,” naming Rio Grande do Sul, Parana, and Santa Catarina.
Those three small exporting states were declared free of foot-and-mouth, a contagious viral disease in cattle, earlier than the other states, although Brazil acquired in May the national status of being free of the disease without vaccination from the World Organization for Animal Health. Brazil’s last outbreak of the disease was in 2006, according to the government.
The Brazilian Agriculture Ministry did not have an immediate comment on its talks with Japan.
A local government source, who asked not to be named, confirmed talks were taking place by region. The person said Brazil initially has no plans to negotiate permits beyond the three states.
Beef sector representatives, including exporters, told Reuters they hope more states will be included.
“We know talks are difficult,” said Paulo Mustefaga, head of beef lobbying group Abrafrigo, which represents Marfrig and smaller beef exporters. “The surprise for us is that this is now moving towards approval for only three states.”
Japan’s Ministry of Agriculture, Forestry and Fisheries said it was aware of Brazil’s status of being free of foot-and-mouth disease. It added that Japan is “conducting a risk assessment in accordance with Japanese procedures” ahead of issuing any export permits to Brazilian meatpackers, without elaborating.
(Reporting by Ana Mano in Sao Paulo and Marcela Ayres in Brasília; additional reporting by Kaori Kaneko in TokyoEditing by Rod Nickel)
