Animal diseases could lead to world trade losses of $10 billion in 2004 - UN

With disease outbreaks such as bovine spongiform encephalopathy (BSE) and bird flu affecting about a third of global meat exports, the United Nations Food and Agriculture Organization (FAO) warned today of losses of up to $10 billion in the $33-billion-a-year meat and live animal trade if import bans extend throughout 2004.

The losses, likely to accrue to the 12 countries facing export bans or market constrains as a result of disease concerns, do not include the costs of disease control measures, losses to producers and consumers through destabilized markets and fluctuating prices, and the general costs to the industry, the Rome-based agency said.

The impact of the current bird flu epidemic in Asia on small poultry producers may be considerable, with over 100 million birds estimated to have died or been culled over the past two months. In particular, producers in export-dependent countries like Thailand, which has culled some 36 million birds or 25 per cent of its domestic flocks, will increasingly lose income as local prices drop sharply.

In the case of BSE, countries around the world have banned beef imports from the United States and Canada, which account for more than a quarter of global beef exports (around 1.6 million tons, valued at approximately $4 billion). US beef exports, after reaching 1.2 million tons in 2003, are expected to drop to 100,000 tons in 2004 if bans remain in place for the entire year, the US Department of Agriculture estimates.

Both Canada and the US, accounting for 4 million tons or 50 per cent of world exports of poultry meat, as well as nine Asian countries, have documented bird flu outbreaks. While these have not been reported in commercial flocks in North America, a prolonged ban on exports, which constitute 15 percent of US production, will put downward pressure on all of the country's meat prices.

As a result of poultry and beef import bans, FAO expects demand for substitutes such as pork to increase significantly. This is already visible in Japan where shortages of beef and chicken have led to a 40 per cent surge in pig-meat prices in February.