BRASILIA (AFP) - Brazil's president held crisis talks on Sunday (March 19) with ministers and foreign ambassadors to try and limit the damage to trade from allegations that major Brazilian producers have been selling rotten meat worldwide.

President Michel Temer even invited ambassadors to a steak dinner. He smiled as he invited diplomats to a traditional Brazilian meat restaurant called a churrascaria, saying “if you accept the invitation we will be very happy.”

Nineteen of the 33 envoys who met with him accepted the offer. But Temer had the serious mission of calming a scandal threatening the reputation of the world’s biggest beef and poultry exporting nation. The scare started on Friday when police said a two-year probe had found major meat producers bribed health inspectors to certify tainted food as fit for consumption.

The allegations has struck at the heart of the world's leading beef and chicken exporter.

Temer - whose government is already battered by a huge embezzlement scandal and Brazil's deepest recession in history - huddled first with meatpacking representatives, Agriculture Minister Blairo Maggi and Trade Minister Marcos Pereira.

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About 150 countries buy meat from Brazil, with principal markets as widespread as Saudi Arabia, China, Japan, Russia, the Netherlands and Italy. Brazil exported about US$5.9 billion (S$8.3 billion) in poultry and US$4.3 billion in beef in 2016, according to Brazilian government data.

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Singapore also imports meat from Brazil but the Agri-Food and Veterinary Authority (AVA) said on Monday (March 20) that the island does not import from the 21 Brazilian meat processing establishments which have been placed under a special surveillance regime amid the investigation.

"None of them are approved to export to Singapore," AVA said in a statement. Three of the establishments have been suspended.

So far police in Brazil have arrested at least 30 people in the alleged scheme, raiding more than a dozen processing plants and issuing 27 arrest warrants. A poultry-processing plant run by the multinational BRF group and two meat-processing plants operated by the local Peccin company were shut down, the Agriculture Ministry said.

An additional 21 establishments are under investigation, and the ministry dismissed 33 officials allegedly involved in the scheme.

Fears of trade fallout

For Brazil, the worry is that the scandal will ruin global appetites for its food.

The row comes at a sensitive time, as Brazil and other members of South America's Mercosur group are pushing for a trade deal with the European Union, a big market for Brazilian meat.

The EU ambassador to Brazil, Joao Cravinho, tweeted on Sunday that "we asked for complete, urgent clarifications from the agriculture ministry." "It really complicates negotiations," admitted Brazilian under secretary general for economic and financial affairs at the foreign ministry, Carlos Marcio Cozendey.

However, he insisted that the problems were limited in scope.

"From the criminal, corruption point of view, it's obviously a very serious incident," Cozendey told AFP. However, "based on what we know now, it won't impact the control system as a whole." He urged that any response to the crisis be "proportional" and said foreign partners should not overreact. "I hope that this is not used to unjustifiably close markets." .

Problem, what problem?

Companies in the police crosshairs denied that there was anything wrong with their products.

The authorities did not say where tainted products had been found, but noted, in a news conference in the southern city of Curitiba, that carcinogenic substances had in some cases been used to mask the odor of bad meat.

Federal police were due to give further details at a press conference on Monday.

In addition to the giant BRF firm, which owns the Sadia and Perdigao brands, companies under investigation include JBS, a world leader in meat sales and owner of the Big Frango, Seara Alimentos and Swift brands.

JBS took out a full-page ad in the newspaper O Globo to say that the federal office conducting the investigation had made no mention of health problems stemming from JBS products. The BRF group is running similar ads, saying its products pose no health risk "whatsoever." An ad in which actor Robert De Niro testifies to the quality of JBS's Seara ham - with its "authentic Italian flavour" - has gotten heavy play on Brazilian television.

But Professor Silvia Farias, who shops in a Rio supermarket, said reports that some chicken products may be mixed with cardboard are worrying.