Quick response averts market scare in mad cow case

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Indonesia last year imported 20,000 tons of American beef, a tiny fraction of U.S. beef shipments

U.S. Trade Representative Ron Kirk said during a stopover in Singapore that the U.S. “absolutely respects the right of any country to protect the health of its citizens,” but said there was no evidence any contaminated product entered the food chain.

“There is no reason for any consumer to be concerned about the consumption of U.S. beef,” he said. “Thus, we would expect that Indonesia would quickly reopen its market for U.S. beef products.”

There were no immediate signs bigger consumers would follow Indonesia’s move.

In South Korea, the second- and third-largest grocery retailers had earlier pulled U.S. beef from their stores to calm worries among consumers. But one of them resumed sales within hours, citing a government announcement of increased inspections.

South Korea is the fourth-largest importer of American beef. It bought $563 million worth last year.

In Taiwan, the legislature has postponed indefinitely a planned discussion on American beef. Under pressure from Washington, recently re-elected President Ma Ying-jeou has been seeking to break a logjam on the long-running dispute.

Ma, however, is caught between growing popular opposition to U.S. beef and a parallel desire not to endanger the resumption of stalled trade talks, seen as crucial to keeping up the island’s competitive edge in global trade.

The Chinese government did not immediately respond to a request for comment, but a consultant said the BSE discovery is likely to push the government toward establishing strict criteria on American beef. But that’s only if China resumes importing the beef at all.

China imposed a ban on American beef after the 2003 case. Talks on the issue resumed in 2010, with the latest round occurring in February 2011.

Demand for beef in China has increased from 5.6 million tons in 2005 to 6.5 million tons last year, according to consulting firm Frost & Sullivan. In recent years, the Chinese have eaten more beef than the nation can produce, and 10,000 to 60,000 tons of beef have been imported primarily from Australia, Uruguay and Brazil.

Live cattle futures markets plummeted Tuesday, even before the Agriculture Department’s announcement of the mad cow discovery, but they recovered Wednesday as it became clearer that exports would not take a significant hit.

“The only two things that move the market are fear and greed, and fear moved it yesterday, but it’s coming back,” said cattle rancher Bill Donald, of Melville, Mont.

The quick response from the industry and the government helped, he said.

“The main thing with consumers is just to reassure them of the safety of our product and all the different firewalls we have in place,” he said.

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