GENEVA - After factors including the mad cow disease depressed global beef markets last year, 1997 looks to be a transition year for producers and traders worldwide, the World Trade Organisation (WTO) said on Thursday.
Consumption is expected to recover from the dip caused by the suspected links between infected beef and Creutzfeldt-Jakob Disease (CJD), a dementing fatal illness in humans, the trade watchdog said in a report titled "The International Markets for Meat."
However, large and growing European Community (EC) stocks are overhanging the market, it said.
"This year may well be a transition period towards a better 1998," the report said.
Referring to Bovine Spongiform Encephalopathy (BSE or mad cow disease), it said: "As for the BSE impact which has dented beef consumption far beyond the EC, the worst may have passed and consumption may recover."
The annual report by WTO economists pointed to signs that cattle liquidation in the United States is approaching its end and prices will recover as from late 1997.
This promised higher imports and better returns for Australia and New Zealand, South American and other supplies to the U.S. market.
The United States, which accounts for close to one-quarter of world beef imports, is set to import one million tonnes, a rise of nearly 10%. Second-place importer Japan will stabilise at 870 tonnes, followed by Russia (670 tonnes).
"As the U.S. supplies of cow beef decline, imports of beef (for processing) from Oceania are expected to pick up," it said. "Next year, tightening supplies of grainfed beef may also dampen U.S. competitiveness on its overseas markets."
Canada is following the cyclical patterns set by its northern neighbour and production is set to further increase, the report said.
In the 15-member EC, beef and veal production remained almost unchanged last year at 7.9 million tonnes. It is forecast to decrease by about one percent, with increases expected only in Ireland, France and Portugal, according to the WTO.
EC consumption decreased by seven percent to 6.9 million tonnes last year and is expected to rise by two percent to 7.07 million tonnes this year, it added.
Australia is on track to remain the top beef exporter, with 1997 volume forecast at 1,080 tonnes, a rise of 6.5%.
The EC is predicted to remain the second top beef exporter, but its export volume is forecast to drop five percent to 910 tonnes, followed by the United States at 860 tonnes, a rise of 1.5%.
In Asia, last year's import growth in Japan and South Korea was significantly below earlier expectations, the WTO said.
"In Japan, the impact of BSE, food poisoning due to E. coli bacteria, and the yen depreciation led to the first decline in imports after years of double-digit growth," it said.
"This year's prospects are highly uncertain, depending on factors such as consumer confidence in meat safety and further exchange rate developments," the report added.
An outbreak of foot and mouth disease in Taiwan, which supplied 40% or 380,000 tonnes of Japan's pork imports last year, has left a big gap in the Japanese market, the WTO said.
"While large stocks have so far prevented a shortage of pork in Japan, prices in the major supplying countries, the EC (Denmark) and the United States, have risen sharply," it added.
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