French brace for ‘massive’ imports of South American beef

A free trade agreement in the works between the EU and the Mercosur members Argentina, Brazil, Paraguay and Uruguay would pit small French farmers against their much bigger South American counterparts. (AFP)
Updated 17 January 2018
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French brace for ‘massive’ imports of South American beef

SAINTE-CÉCILE, France: Cedric Mandin, who raises some 800 Charolais cows with his brother in France’s Vendee region, is the fourth generation of his family to own their farm, and he fears he will be the last.
The source of his worry is a huge trade deal being negotiated by the EU and the four Mercosur members Argentina, Brazil, Paraguay and Uruguay — an accord whose signature seems closer than ever.
If the treaty goes through, “we would be in an impossible situation, untenable,” said Mandin, 44, who inherited his 270-hectare farm 20 years ago.
“Today we’re paid between €3.60 and €3.70 per kilogram of meat, but our production costs are €4.50 a kilo,” he said while chain-smoking cigars.
“We already have a deficit and face a difficult situation on our farms. If on top of that we add these massive imports of South American beef in Europe, we’re liable to see prices collapse.”
France’s cattle industry, the largest in Europe, has been facing a deep crisis of rising costs and lower prices — against a backdrop of falling meat consumption.
Many ranchers are barely able to make a profit, while debt levels have been rising.
“We’ve been in a crisis for four years, four years that we’ve been trying to streamline everything, clamp down everywhere, cut our costs to the limit,” said Mandin, shrugging his shoulders.
“There comes a point where you can’t cut any more — in terms of competitiveness we’ve tried everything.”
If the EU and the South American countries reach the agreement, at least 70,000 tons of Mercosur beef could enter Europe each year, free of custom charges.
European negotiators consider this an enormous amount, while the South American side says it falls well short of what is necessary.
The new imports would represent just one percent of Europe’s total beef production, and 4.5 percent of France’s output.
But ranchers say the current market structure could not absorb the increase, which would come on top of the 65,000 tons the EU has agreed to allow in from Canada as part of a trade deal.
That assessment is shared by Philippe Chotteau, chief economist at the French Livestock Institute, who said the lower-priced beef will “aggravate the crisis.”
He estimates that retail prices could fall 10 percent, while the national FNB cattle institute says 25,000 to 30,000 jobs could be lost in France.
“French farmers will be the losers in this deal,” Mandin said while walking among his white cows, sheltered in a barn from the harsh winter.
Beyond the economic threats, many French ranchers also say they are worried about insufficient tracing and food security regimens in Mercosur countries, pointing to the scandal over rotting Brazilian meat passed off as safe last year.
Several countries imposed bans on meat imports from Brazil, the world’s largest producer.
“Our animals are tracked since birth. Over there, at best when they leave the ranch,” Mandin said.
“I can tell you the name of the father and mother of my cows. There is genuine traceability throughout the animal’s life. We’re trying to defend this French uniqueness.”
But after two decades of stalled talks, negotiators have made large strides in recent months and appear determined to reach a free-trade deal, taking advantage of a global leadership void in the wake of US President Donald Trump’s election.
The European Commission wants to strike a deal early this year, before a window of opportunity might close with elections expected next year in Brazil.
France, however, has said it does not want to “rush” on the matter, given the potential impact on its hard-hit beef producers.
“The content has to take precedence over the calendar,” Jean-Baptiste Lemoyne, France’s secretary for foreign trade, said in Brussels in November.


First Abu Dhabi Bank to start commercial banking in Saudi Arabia this year

Updated 7 min 25 sec ago
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First Abu Dhabi Bank to start commercial banking in Saudi Arabia this year

  • FAB is the latest foreign bank attracted by openings in Saudi Arabia
  • It had already completed its first debt capital markets transaction in the kingdom through its investment banking business
DUBAI: First Abu Dhabi Bank (FAB), the largest lender in the UAE by assets, said on Monday it will launch commercial banking operations in Saudi Arabia by the end of this year.
The bank, which was granted a commercial banking license in Saudi Arabia earlier this year, has been expanding its staff in the kingdom as it seeks to benefit from the government’s drive to move the economy beyond oil revenues.
It appointed Abdullah Abubakr as head of private banking in Saudi Arabia as of this month, according to his LinkedIn page.
FAB did not respond to a request for comment on his appointment.
FAB is the latest foreign bank attracted by openings in Saudi Arabia. The bank said it had already completed its first debt capital markets transaction in the kingdom through its investment banking business. In February, it was granted a license to conduct arranging and advising activities in the securities business. The bank also on Monday reported a 16 percent rise in third quarter net profit as net interest income and fees and commissions edged higher.
FAB made a net profit of 3.02 billion dirhams ($822 million) in the three months ending Sept. 30, up from 2.61 billion dirhams in the prior-year period, it said in a statement. SICO Bahrain had forecast FAB’s quarterly profit at 2.87 billion dirhams.
FAB’s performance was helped by lower net impairment charges during the quarter, with impairments falling 23 percent to 435 million dirhams. Loans and advances rose to 354 billion dirhams as of Sept. 30, up 8 percent from the same period of last year. Deposits totaled 455 billion dirhams, up 20 percent from a year earlier.