Korea
안녕하세요! - Annyong Ha Sae Yo! - Greetings!
This section includes a range of information on the Korean market, including the latest statistics on beef, sheepmeat and offal imports and exports.
Daily News
If you would like to receive a daily news update of clippings relating to beef in Korea and market developments on a daily basis, please contact korea@mla.com.au
(Please note these are extracts from Korean press and may not represent the views of MLA, and are available to MLA members and stakeholders only).
MLA Korea Daily News (Sample 26 June 2007 - PDF 72KB)
Market developments
US beef return in Korea - August 2008
US export volumes in August have been in line with the expected rate of around 8,000-9,000 tonnes/month (40% of 2003 levels). However, sales of the product appear to have been disappointing leading to forecasts of high stocks of US beef and losses by importers.
In the first three weeks of August, a total of 8,524 tonnes swt of US beef was exported to Korea, bringing the total to 11,822 tonnes since the lifting of the US ban on US beef at the end of June 2008 (USDA). According to the quarantine authority (NVQRS), a total of 5,85o tonnes swt cleared quarantine inspections from 30 June up to 20 August.
Reportedly the majority of cleared US beef is currently being kept in warehouses, as major Korean retailers and restaurant chains have decided not to sell US beef yet, taking public sentiment into consideration. US beef has so far only been sold in neighbourhood butcher shops and smaller restaurants, particularly in regional areas. Several industry analysts predict an ongoing discrepancy between demand and supply for US beef in Korea, leading to high stocks of the product. While US beef is not displacing sales of Australian product, at this stage, Korean importers have been reluctant to buy due to the drop in demand associated with the anti-US beef protests and the possibility of a fall in imported beef prices.
Back to top
Initial impact of US beef return in Korea - July 2008
The return of US beef into the Korean market impacted both the wholesale market and consumer demand throughout July. With the distribution of 5,700 tonnes of boneless US beef products in Korea during the first week of July, the wholesale market was reportedly very quiet.
US beef was primarily sold in online shopping malls and small butcher shops. Major Korean retailers, such as E-Mart, Homeplus and Costco stated they would not start to sell US beef until consumer confidence had returned.
The return of US beef decreased overall beef consumption in Korea during July, with enquiries from Korean importers back 50% compared with the same period last year. Adding to the reportedly slower demand, most Korean buyers increase beef stock at this time of year in order to satisfy consumer demand for Chuseok (national holiday) starting 13 September.
In order to restore Korean consumers' confidence and trust in beef, the Korean government introduced a country-of-origin labelling regulation for beef products sold at retail, food service and catering.
Back to top
Korea delays US beef again - 3 June 2008
Korean authorities have again delayed the final administrative steps to allow US beef quarantine inspections and imports to resume. The delay was announced Monday following a request by the ruling GNP party. It is unclear how long the latest delay will last. Read more...
Back to top
US beef import conditions - 30 May 2008
The Korean government announced the final US beef import terms (sanitary and phytosanitary standards, SPS) , paving the way for quarantine inspections to commence. There have been a number of delays in the official implementation of the April agreement to recommence imports of US beef, with 337 official complaints by civil and farming groups, as well as unanticipated consumer uproar and country-wide anti-government street demonstrations. Read more...
Back to top
Study reveals gains to Australia from FTA with Korea - 22 April 2008
The Minister for Trade, Simon Crean, has welcomed the key findings of a non-government study into the feasibility of a free trade agreement (FTA) between Australia and Korea. The study suggests particular gains from cuts to Korean agricultural trade barriers. Read more...
Press release - DFAT 22 April 2008 (Word Document)
Read the full report (PDF 804KB)
Back to top
Market re-opened to US beef - 18 April 2008
On Friday 18 April a decision was announced on the revision of US beef import protocol for the Korean market. Following lengthy talks between trade officials and quarantine experts in Korea last week, a full but phased reopening of the market was negotiated. Read more...
Fact sheet on the revised protocol - US Trade Representative 18 April 2008 (PDF 34KB)
Press Release - US Trade Representative 18 April 2008 (PDF 20KB)
New OIE recommendations – May 2007
Members of the World Organization for Animal Health (the OIE) officially classified the US as a ’controlled risk’ region for bovine spongiform encephalopathy (BSE). This classification ostensibly allows US beef to be exported from cattle of all ages, including bone-in product and offal - except specified risk materials
The US government now hopes to leverage OIE's BSE ruling in its efforts to fully re-open both Japan and South Korea, though both have said the classification alone would not prompt them to modify their current import policies.
’Controlled risk’ is the middle level of the OIE’s three-tiered classification system. It indicates that, while a country has a history of BSE cases, it has proven it can contain the disease. OIE recommends that ‘controlled risk’ countries be allowed to export beef from cattle under 30 months of age, with specified risk materials removed.
While Japan, South Korea and the US are all members of the OIE (as is Australia and 151 other nations), member countries are not obliged to adopt OIE’s recommended trade rules. According to Yonhap News, South Korean officials have said the OIE rating is not binding, and that countries involved need to agree on details of opening the market.
Back to top
FTA Agreement Reached
Following lengthy negotiations, the US and Korea announced a proposed and broad-ranging Free Trade Agreement on 2 April 2007. This agreement (expected to commence in 2008) includes the elimination of the 40% tariff on US beef imports to Korea over 15 years.
Read the US Korea FTA Issue Brief 3 April 2007 (PDF 66KB)
The potential impacts of the US re-entry
Australian beef export volumes and values to South Korea continue to be largely governed by changes, and anticipated changes, to protocols regarding the importation of US beef.
At the time of writing, the clearance of US beef was again suspended, with no formal agreement between Korea and the US regarding changes to import protocols necessary to restart the trade (see box B3).
US exporters have been unable to consistently meet the current access protocols for bone-out beef (with no bone chips) from cattle less than 30 months of age with specified risk materials (SRMs) removed. The US is seeking an easing of these protocols to include bone-in beef from cattle of any age. Korea appears willing to allow bone-in beef, but only from cattle under 30 months at this stage.
Despite the unofficial link between the beef import issue and the ratification of the Korea–US FTA (which seems likely to be delayed until early 2009), a new protocol agreement may be reached between Korea and the US by early 2008, allowing for bone-in beef from under 30 month old cattle. US licensing and inspection procedures are also likely to be amended to ensure the removal of all SRMs.
On this assumption, around 100,000 tonnes of US beef is forecast to enter the Korean market in 2008 (45% of the 2003 level), building to 200,000 tonnes by 2012 (90% of 2003 imports) – see figure B14. From 2010, US beef imports could also begin to benefit from falling tariffs under the proposed Korea–US FTA (see appendix).
Following the US re-entry, Australian beef export volumes to Korea are expected to decline, although Australia should retain a larger market share than pre-BSE, particularly in family restaurants and at retail. However, customer loyalty is unlikely to be as significant as in Japan.
Adding to the slowdown in exports to Korea in 2008 is the expectation of a continued high A$ and modest cutbacks in Australian grassfed and grainfed beef supplies. Hence, Australian exports to Korea are forecast to fall by 26% in 2008, to 110,000 tonnes – still 77% higher than in 2003 (see figure B16). This will leave Australia with a 46% share of the imported beef market, compared with a 23% share in 2003.
Korea continues to offer good prospects for renewed import growth over the medium to long term, particularly once the BSE concerns dissipate, the economy recovers and the current expansion in domestic beef supplies slows. The Korean market has been through a rocky period since import liberalisation in 2001 and still appears to have significant development potential once the market stabilises further.
(extract from Australian cattle and sheep Industry Projections, 2008)
Back to top
More information
|