FAS/Seoul Monitoring of Media Reporting on Agricultural Issues

Today's Date:   Tuesday, June 30, 2015

For Coverage:  June 01 ~ 30, 2015

1. ECONOMIC ISSUES

<6/15/2015> Korea suffers worsening drought [English, CSY]

http://www.koreaherald.com/view.php?ud=20150616001127

Summary: Farmers and residents in northern parts of the country Tuesday repeated requests for help to survive an escalating drought here that has left riverbanks dry and crops withering.  Meteorologists predicted continued sunshine in the coming days, meaning that government efforts could ultimately fail to offset falling crop yields and rising vegetable prices, worsening consumer sentiment and escalating public fears of water deficits in areas far away from those hardest-hit.

Minister of Agriculture, Food and Rural Affairs Lee Dong-phil vowed earlier Tuesday to muster 62.5 billion won ($56 million) to fight this year’s drought. The money will provide water to struggling farms. Over 16,000 soldiers, policemen, and officials will deliver the water, Lee said.   Signs showing the drought’s overwhelming effects on South Korea continued to increase public fear that the water deficit was worse than expected.    Lettuce prices rose by 176 percent in the first half of June, the Korea Rural Economic Institute, a public think tank, said. Radish prices rose to 743 won per kilogram, higher than prices from last year that stood at about 500 won per kilogram.

<6/9/2015> S. Korea's farm exports drop 8.1 pct on-year in May [English, CSY]

http://english.yonhapnews.co.kr/search1/2603000000.html?cid=AEN20150609003000320

Summary: South Korea's exports of farmed goods shrank significantly last month with shipments of both fresh foodstuff and processed products slipping, the government said Tuesday.   Outbound shipments of agricultural and food products amounted to US$480.4 million in May, down 8.1 percent from the same month last year, according to the Ministry of Agriculture, Food and Rural Affairs.  The drop was partly attributed to large cuts in exports to Japan and Russia, both of whom have experienced weakening currencies over the past months, removing price competitiveness of not just farmed goods but any product from South Korea.

<5/27/2015> Import farm price index hits 7-year low in April [English, CSY]

http://english.yonhapnews.co.kr/search1/2603000000.html?cid=AEN20150527002100320

Summary: Prices of imported farm products hit the lowest level in more than seven years in April mainly due to a drop in international grain and vegetable costs, government data showed Wednesday.   According to the data by the Korea Customs Service (KCS), the price index for imported farm produce stood at 95.1, down 1.9 percent from 96.9 the month before and 98.1 tallied a year earlier. It was the lowest reading since 89.9 reached in December 2007.  The service said the drop was mostly due to weaker prices for key staples, such as grain.   While prices for grain, vegetables and some fruit fell, those for spices like garlic and ginger, as well as for processed foods, such as flour, rose.

2. GRAIN & OILSEED ISSUES

<6/11/2015> Korea’s support for rice value chain development in West Africa [English, CSY]

http://www.koreaherald.com/view.php?ud=20150611001096

Summary: South Korea and the FAO have agreed to work together in implementing the project on “Capacity Development and Experience Sharing for Sustainable Value Chain Development in Africa through South-South Cooperation” to support several West African countries in their national rice development programs.   The project will build on and scale up the positive achievements and lessons learned from ongoing projects and programs, which target the commercialization of the agricultural sector in the beneficiary countries. The ongoing initiatives generally adopt a value chain approach, focusing on increased production and productivity, added value, quality improvement and enhanced market access.

South Korea is providing a budget of about $2 million to support the project in three countries in West Africa, while the FAO is facilitating the implementation of the project through its Regional Office for Africa. The project will contribute to a more modern and profitable agricultural sector through the design and implementation of evidence-based agriculture and rural development approaches, policies and programs for rice in these countries.

3. LIVESTOCK ISSUES

<6/12/2015>U.S. beef making a comeback in Korea [English, CSY]

http://www.arirang.co.kr/News/News_View.asp?nseq=180409

Summary: Once considered poisonous, U.S. beef is regaining its allure in Korea.  America is now expected to trample Australia to become the number one source of beef imports in Korea.  The U.S. Meat Export Federation says, Korea imported 2,527 tons of American beef during the first ten days of May, edging out Australian imports. This is the first time Korea has bought more from the U.S. than Australia in seven years, since Korea lifted the import ban on American beef in 2008. Korea had banned U.S. beef imports in 2003 after a mad cow disease was confirmed in America.

The rising demand for U.S. beef comes despite its expensive cost.  Between January and April, the average import price of American beef per metric ton stood at 7,988 US dollars, 32-percent higher than the price of Australian beef.   The U.S. Meat Export Federation's Korea branch says the absence of mad cow disease for several years seems to have gradually changed Korean attitudes.   They also attribute the rising demand to quality.

<6/13/2015> Harim Group proceeds with Pan Ocean merger [English, CSY]

http://koreajoongangdaily.joins.com/news/article/article.aspx?aid=3005334&cloc=joongangdaily%7Chome%7Cnewslist1

Summary: Harim Group, a major livestock and animal feed group in Korea, will move forward with its takeover of troubled dry bulk carrier Pan Ocean.   Pan Ocean creditors and shareholders approved the deal on Friday.  Harim, partnering with JKL Partners, participated in the bid last year and was picked as the preferred bidder in December.   The company paid over 1 trillion won ($895.5 billion) for the deal earlier this month.  Harim said it expects great synergy from the merger, as it has been in need of reliable and efficient transportation for the grain and corn it uses in its feed.   Harim is the country’s biggest livestock company, and its livestock business generates annual sales of around 4.8 trillion won. Its animal feed business is also the biggest among private companies, with annual sales of 1.2 trillion won.

4. MARKETING ISSUES

"Delivery Speed Is the Key Competency", Local TV Home Shopping Companies Offer 'Same Day Delivery Service' [Korean, OSY]

http://www.hankyung.com/news/app/newsview.php?aid=2015061433411

Summary: CJ O Shopping Co., a leading TV home shopping company in Korea announced on June 15 that its 'same day delivery service' will be expanded to cover the whole regions in Korea.  CJ added that it would be the first home shopping company in Korea that offers the 'same day delivery service' in the entire market.  Other TV home shopping company's same day delivery service is currently limited to major metropolitan areas in the market.  'Same day delivery service' delivers the product ordered before noon by the evening of the same day.  It is expected that other TV home shopping companies will also expand the service in the entire market sooner or later because speedy delivery service has become the key consumer attraction factor in the industry.  Some of the local grocery retailers have made one further step in the delivery service earlier this year to offer 'order by 4 p.m. for delivery in the evening' service.

A Cup of Coffee in Hotels in Seoul is Sold at 10,770 Won ($10), Most Expensive Around the World [Korean, OSY]

http://bizn.khan.co.kr/khan_art_view.html?artid=201506291620001&code=920401&med=khan

Summary: Hotels.com reported recently that Seoul was the most expensive place around the world for coffee price in hotels.  According to the price survey by Hotels.com done in 28 countries recently, the price of a cup of coffee in hotels in Seoul was 10,770 won (about $10) on average, which was more expensive than other key cities around the world such as Tokyo (9,420 won), Beijing (8,510 won), Hong Kong (8,190 won), London (6,760 won), and New York (5,960 won).

Jeju Shilla Hotel Reopens on July 1 after Two Weeks of Voluntary, Precautious Closure for MERS Risk [Korean, OSY]

http://www.sisafocus.co.kr/news/articleView.html?idxno=125729

Summary: Jeju Shilla Hotel, the most outstanding five star hotel in Jeju island, a key tourist destination in South Korea, announced that it will resume normal operation on July 1.  The hotel closed its door on June 18 voluntarily after a tourist who was affected with MERS (Middle East Respiratory Syndrome) virus reportedly visited the hotel.  The voluntary closure of operation for 13 days was a measure to make sure that the hotel was free from the virus.  Over the closure period, no guests or visitors to the hotel prior to the closure reported MERS infection.

Sales of "Super Grains" Hikes in Supermarkets [Korean, OSY]

http://www.hankyung.com/news/app/newsview.php?aid=2015063031711

Summary: Home Plus, a leading hypermarket store chain in Korea, reported that its sales of "super grain category" which includes oats and lentils peas grew 15 times during the first half this year compared to the same period last year.  To further expand the sales, Home Plus is scheduled to launch a sales promotion on the category from July 2.

5. NORTH KOREA ISSUES

Yonhap: (2nd LD) (Yonhap Interview) WFP On Standby For Possible N. Korea Drought[English, CSC]
http://english.yonhapnews.co.kr/search1/2603000000.html?cid=AEN20150610010652315

<6/9/2015> N. Korea's crop production may fall 20 pct in drought: S. Korea [English, CSY]

http://english.yonhapnews.co.kr/search1/2603000000.html?cid=AEN20150609004000315

Summary: North Korea is likely to see its food production fall by up to 20 percent this year from 2014 if a shortage of rainfall continues until early July, a Unification Ministry official said Tuesday.   In May, precipitation in North Korea reached 57 percent of the average rainfall recorded between 1981 and 2010, according to the official.   In 2014, the North reported its smallest rainfall in 15 years and the United Nations has warned that North Korea is likely to suffer from serious food shortages this year due to drought.   North Korea's crop production could decline by 15 to 20 percent this year compared to last year if it continues to see a rainfall shortage until early July, the official said.   The North is expected to see its food production fall by only 5 to 10 percent if the lack of rainfall continues into early June. In that case, North Korea is believed to be focusing on producing maize as an alternative to rice.

6. OTHER MISCELLANEOUS ISSUES

Attached is a photo of the parking lot at Lotte Jamsil [English, BYK]

Attached is a photo of the parking lot at Lotte, which used to be filled with tourist buses that Chinese tourists had rented.  However, after the MERS you can barely find a tourist bus.  This photo was taken at around 7 pm on June 19, 2015.

<6/15/2015> MERS outbreak fueling economic uncertainty: finance minister [English, CSY]

http://english.yonhapnews.co.kr/search1/2603000000.html?cid=AEN20150615002953320

Summary: The outbreak of Middle East Respiratory Syndrome (MERS) in South Korea is fueling economic uncertainty at a time when private spending is just showing signs of recovery, the top economic policymaker said Monday.   Speaking to lawmakers at the National Assembly in Seoul, Choi Kyung-hwan said while the spread of the respiratory illness has not seriously impacted the economy as a whole for now, it has the potential to pose downside risks if the situation drags on.

7. MIFAFF PRESS RELEASES

<6/12/2015> Gov’t offers new emissions goals [English, CSY]

http://koreajoongangdaily.joins.com/news/article/Article.aspx?aid=3005293

Summary: The government rolled out four possible scenarios for carbon reduction goals ranging from 15 to 30 percent, which satisfy neither environmentalists nor businesses.   These goals are based on a new calculation of carbon emissions in 2030 based on gross domestic product growth of 3.08 percent annually, plans for new energy supplies and recent international oil prices.  The reduction goals announced for the four scenarios would be easier to meet than the current goal of 30 percent under business activities as usual (BAU) in 2020 that was set in 2009, which has stirred opposition from manufacturers as being too strict and threatening their competitiveness against China and Japan.  A study by 15 energy and economy-related research institutes estimates Korea will emit 782.5 million tons of carbon dioxide annually in 2020 and 850.6 million tons in 2030.  The four scenarios for emissions in 2030 are reductions of 14 percent, 19 percent, 25 percent and 31 percent.  The four scenarios will undergo public hearings before being finalized and submitted to the United Nations by end of this month.