Korea Suspends Some U.S. Beef Imports on Banned Additive

South Korea halted beef imports from a U.S. unit of JBS SA (JBSS3) after finding traces of the feed additive zilpaterol in a consignment of the meat.

The substance, banned in South Korea, was detected in a 22-ton shipment from Greeley, Colorado-based Swift Beef Co. on Sept. 24, according to a statement posted on the Ministry of Food and Drug Safety’s website today. South Korea asked the U.S. to investigate, the ministry said.

Swift, part of Sao Paulo-based JBS, accounted for 5.8 percent of 75,426 tons of purchases from the U.S. in the nine months through September this year, according to the ministry. Tyson Foods Inc. (TSN) and Cargill Inc., two of the largest U.S. cattle processors, in August halted purchases of animals fed with Merck & Co.’s Zilmax supplement, also known as zilpaterol. CME Group Inc. last month banned cattle with the additive from delivery for its futures contracts.

South Korea, the third-biggest buyer of U.S. beef before it banned imports after mad cow case in 2003, resumed purchases in 2008 amid widespread street protests against the move. It agreed to phase out beef tariffs over 15 years when a free-trade deal with U.S. took effect last year.

Japan, Asia’s biggest beef buyer, imported 515,108 tons worth 221 billion yen ($2.3 billion) last year from exporters including the Australia, the U.S. and New Zealand. China, the world’s largest meat consumer, banned U.S. beef in 2003 over mad cow disease.

Cattle futures for December delivery in Chicago were little changed at $1.32250 a pound at 6:38 p.m. Seoul time. Futures surged 8.2 percent last quarter, the first such gain since 2012.

Tyson Foods said in August that potential problems with the supplement concerned animal well-being and not food safety.

To contact the reporter on this story: Cynthia Kim in Seoul at ckim170@bloomberg.net

To contact the editor responsible for this story: Brett Miller at bmiller30@bloomberg.net

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