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China seeks extra testing of U.S. pork for feed additive

A man works in his shop selling pork products in Shanghai September 28, 2007. REUTERS/David Gray
A man works in his shop selling pork products in Shanghai September 28, 2007. REUTERS/David Gray

By Theopolis Waters

CHICAGO (Reuters) - China wants a third party to verify beginning March 1 that U.S. pork shipped to the country is free of a feed additive used to promote lean muscle growth, a U.S. Meat Export Federation spokesman told Reuters.

The reasons for China's timing and motives for additional verification on the ractopamine additive were unclear, but stirred speculation ranging from a political agenda to protection of that country's pork industry.

The move by China, the world's biggest producer and consumer of the meat and the third-largest market for U.S. pork, baffled analysts since Beijing has not recently reported finding ractopamine in any pork from the United States.

The step does, however, come on the heels of Russia barring imports of U.S. meat worth $550 million a year due to the same feed additive.

Officials from the China's quarantine bureau, which oversees the safety of food imports, declined to make immediate comment, while a spokesman said the country's commerce ministry was unaware of the move.

There was concern that China's requirement for third-party testing could hurt U.S. pork exports to the Chinese mainland and Hong Kong, valued at $886 million last year.

"We have just been notified (by U.S. suppliers) and are checking details with the quarantine authorities," said a trader with a large state-owned pork importer in China.

Beijing maintains that there are serious concerns about ractopamine, despite scientific evidence that it is safe. The United Nations has agreed on acceptable levels.

The quarantine bureau in May rejected a consignment of U.S. pork after tests found traces of the drug.

Steve Meyer, president of Iowa-based Paragon Economics, said: "My guess is they are trying to protect the domestic industry. They are trying to throw up roadblocks. That is always a possibility when you are dealing with Russia and China."

He said that any move by China to ban pork imports from the United States would benefit exporters such as Canada, Brazil and the European Union.

ZERO TOLERANCE

Joe Schuele, communications director of Meat Export Federation, a trade association for U.S. meat producers, said: "There has been communication from the China regulatory agency with U.S. officials that suggests this will be a March 1 requirement."

"China has a zero-tolerance (ractopamine) requirement for pork. The issue is how do you satisfy the third-party verification requirement when U.S. pork is already ractopamine free," said Schuele.

China in the past barred imports from some U.S. companies that shipped meat with trace amounts of the feed additive.

"We are still seeking specifics in terms of what China will accept in order to satisfy the third-party verification requirement. Those are key details for pork exporters, who want to keep U.S. product moving into this market," he said.

Lean hog futures at the Chicago Mercantile Exchange fell sharply on rumors of the Chinese action, and extended losses in after-hours trading.

There was also concern over the fate of pork that was already on its way to China.

"There is a lot of product en route to China anytime because it's a large volume market. It's going to be a high priority that's for sure," Schuele said.

The U.S. Trade Representative's office said it was looking into the issue but did not immediately have a comment.

"China may be responding with trying to become a little more protectionist and they're upping the ante at the government level," said Mike Zuzolo, president of Indiana-based Global Commodity Analytics.

Or, the Chinese may be on the verge of achieving their goal of building a strong domestic hog production industry to the point to where they can be more selective about the type and amount of product they will allow in, he said.

(Additional reporting by K.T. Arasu in Chicago, Doug Palmer in Washington and Niu Shuping in Beijing; Editing by Gerald E. McCormick, Steve Orlofsky and Joseph Radford)

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