Russia is the new friend of the British meat consumer, Moscow's decision to ban imports from the EU locking a huge additional tonnage of product into the western European market and therefore guaranteeing more downward pressure on prices. The main impact is likely to be on the beef market, as Russian buyers were almost the only remaining large customers for EU suppliers of this commodity even before the FMD crisis. BSE scares on the continent late last year provoked import bans by an array of third countries, including some such as Egypt and Libya which had been crucial markets for Irish processors. The Russians not only kept buying but stepped up their purchasing and among continental and Irish exporters was growing optimism on future volumes and profitability because genuine commercial trade seemed to be replacing former food aid shipments. This continued during the first few weeks of the FMD crisis. But beef trade sentiment deteriorated sharply early in the week as news of the Russian ban circulated, prompting warnings from Brussels of likely disruption in the internal EU market. Just days earlier agriculture commissioner Franz Fischler had been talking of stability returning to the beef sector, partly because exports had held up better than expected. With the Russians no longer bidding, EU exporters have lost about a quarter of their third country pigmeat trade and 40% of their beef sales to the world market. Trapping this tonnage inside the EU has obviously adverse implications for pig producers' and pork processors' returns in view of the uncertainty over access to North America and Japan, but in the beef sector the pressure is intensified by changes in Brussels policy switching the emphasis of supply management from the purchase for destruction scheme to intervention and other storage subsidy mechanisms. However, the short term outlook for the UK beef market is less clear. Several major slaughterers report cattle becoming scarce as producers hold back stock in the hope of FMD compensation proving more lucrative than the softening market prices. {{M/E MEAT }}

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