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Food News Clipping

October 2010

2010.11.08

 

KoreaKorea Signs Free Trade Agreement with EU ¡¦ Super Supermarket (SSM) Issue could Block Ratification in EU [Korean, OSY]

http://news.donga.com/Society/3/03/20101007/31674240/1

Summary: South Korea-EU Free Trade Agreement requires ratification by national assembly in each country to take effects.  One of the key issues that are likely to block the EU assembly from moving forward to ratification is Korean government¡¯s restriction on ¡°Super Supermarkets (SSM)¡±.  SSM is small size grocery supermarkets that large scale Korean retailers have launched to expand into neighborhood markets where there are no room to accommodate large-scale stores (hypermarkets).  Korean government has proposed a regulation that prohibits SSM stores within 500 meters from ¡°traditional markets¡±, which has met strong opposition by large scale retailers, in particular Tesco Korea who has been most active in expanding into the SSM business.

 

Korea Signs Historic Free Trade Deal With EU [Enlgish, CSY]

http://english.donga.com/srv/service.php3?bicode

Summary: Korea signed a historic free trade agreement with the European Union Wednesday, creating a network with the world¡¯s single biggest economic bloc. The Korea Institute for International Economic Policy and the Korea Labor Institute said the agreement will increase Korean exports to the EU by 2.53 billion dollars and EU imports by 2.17 billion dollars per year over the next 15 years. The deal will also create up to 253,000 jobs. Korean agriculture, however, is expected to suffer an annual deficit of 31 million dollars over the same period.

 

Gov't to submit EU FTA ratification bill to parliament in Oct. [English, CSY]

http://english.yonhapnews.co.kr/n_business/2010/10/06/

Summary: The government will submit the South Korea-European Union (EU) free trade pact ratification bill to the National Assembly within the month so the country can begin follow-up measures as soon as possible, officials said Wednesday.  The Ministry of Strategy and Finance said with the official signing of the bilateral free trade agreement (FTA) in Brussels earlier in the day, both sides are provisionally committed to implementing the pact starting on July 1, 2011.

 

Momentum of Korea-EU FTA Must Not be Wasted [English, CSY]http://english.chosun.com/site/data/html_dir

Summary: The signing of the FTA should be used to give momentum to the stalled Korea-U.S. FTA which, despite having been signed in June 2007, has yet to be ratified due to opposition from the U.S. Senate and American automakers. The Korea-EU FTA has bolstered Korea's leverage when it comes to U.S. demands to renegotiate portions of the deal. The government must take a comprehensive approach that takes diplomatic relations and security concerns into consideration and ensure that additional negotiations are wrapped up soon so the deal can be finally ratified.

 

Once FTAs with the EU and the U.S. take effect, Korea will be able to emerge as the free-trade hub of Northeast Asia and allow Seoul to gain an advantage in FTA talks with China and Japan. If the opportunities brought by the Korea-EU FTA are utilized effectively, new growth opportunities will emerge for the Korean economy. The National Assembly must ratify the pact as soon as possible.

 

Korea and Colombia seek trade deal [English, CSY]

http://joongangdaily.joins.com/article/view.asp?aid

Summary: Korea and Colombia will hold their fourth round of free trade negotiations next week, the Ministry of Foreign Affairs and Trade said yesterday.  During the five-day talks to be held in Cali, Colombia, the two sides will discuss a variety of issues such as tariff concessions and services, according to the ministry.  In a June meeting, both sides made progress on trade barriers, telecoms and other issues. The two countries held their first round of free trade negotiations in Seoul last December.

 

Pro-free trade body urges quicker ratification of free trade pacts [English, CSY]

http://english.yonhapnews.co.kr/business/2010/09/30/

Summary: A pro-free trade organization urged the South Korean government and parliament Thursday to approve free trade agreements with the United States and the European Union (EU), saying quicker ratification would help the country benefit most from the trade accords.

 

United States continues push for revisions to the KORUS FTA prior to the G20 Summit [Korean: BYK]

http://news2.kukinews.com/article/view.asp?page=

Summary: The United States continued to demand that Korea make changes to the KORUS FTA for automobiles and beef.

 

 

None

 

3. Economic Issues

 

¡°Price of Key Consumer Products in Korea Should be Comparable to International Price¡±, President MB [Korean, OSY]

http://www.ytn.co.kr/_ln/0101_201010121224579333

Summary: President MB Lee reportedly mentioned in the cabinet meeting on October 12 that price of key consumer products, including food and agricultural products, sold in Korea should be lower or similar to international prices.  President Lee placed an order in the meeting that price of 52 key consumer products closely monitored and imports of related products discussed if deemed necessary to stabilize the market.

 

Import Tariffs to Be Lifted on Napa Cabbage, Radish [English, CSY]

http://english.chosun.com/site/data/html_dir/

Full text: The Agriculture Ministry plans to temporarily waive tariffs on all imports of napa cabbage and radish until the end of the year to stabilize prices and deal with supply shortages.  Through the measure, the ministry expects cabbage prices, now at an all time high of more than W10,000 (US$1=W1,127) per head, to go down later this month.

 

In addition to importing 100 tons of napa cabbage the government also plans to add 50 tons of radish to its import list from China within this month. But critics say this may only be a temporary fix to boost supply and not a long-term solution to prevent future shortages.  Napa cabbage is a main ingredient in the most popular type of kimchi, the staple spicy delicacy of Korea.

 

Prices for basic necessities hit 2-year high in Sept. [English, CSY]

http://english.yonhapnews.co.kr/business/2010/10/07/

Summary: Prices for daily necessities in South Korea jumped to a two-year-high in September mainly due to a rise in costs of agricultural products caused by inclement weather, a government report showed Thursday.  The report by Statistics Korea said prices for 152 essential products such as food, household miscellaneous goods, clothing and fuel rose 4.1 percent on-year last month, the highest hike since the 4.8 percent in October 2008.

 

Of the 152 reviewed products, 116 items, or 76 percent of the total, rose compared to the year before, it said. Prices for 19 products fell, while those for 17 items on the list remained unchanged. The statistical office said prices of many fresh vegetables such as cabbage, spinach, cucumbers and garlic rose more than 100 percent on-year, while those for lettuce and squash more than tripled. Prices for gas used for cooking, soap and tissue paper also increased by around 10 percent.

 

Gov¡¯t to Maintain Zero Percent Import Tariffs on Radish and Chinese Cabbage Until Year End [Korean, OSY]

http://news.mt.co.kr/mtview.php?no=2010100510225243714

Summary: Gov¡¯t cabinet meeting on October 5 decided that import tariffs on radish and cabbage will remain at zero percent throughout this year.

 

Cabbage crisis causes kimchi crunch [English, CSY]

http://joongangdaily.joins.com/article/view.asp?aid

Summary: Korea is going through a kimchi crunch after this year¡¯s weird weather led to rising prices for Chinese cabbage, used in the main form of kimchi. Within two days this week, cabbage prices doubled.  Company cafeterias have cut down on the amount they offer employees, some restaurants are charging for kimchi refills, and moms and grandmas do not know what they¡¯ll do in November and December, the traditional season for making homemade kimchi.

 

Seoul to remove tariff on Chinese cabbage, radish [English, CSY]

http://english.yonhapnews.co.kr/business/2010/10/01/

Summary: South Korea will temporarily remove its tariffs on cabbage and radish imports and bring in 150 tons of the fresh vegetables from China in an effort to help curb their soaring prices, the government said Friday.  The country currently imposes a 27 percent import duty on fresh white cabbage and 30 percent tariffs on radishes. The vegetables are used to make kimchi, a staple side dish for South Koreans.

 

4. Grain & Oilseed Issues

 

Korean Statistical Information Service (KOSIS) has recently released its estimates of 2010 rice production at 4.35 million metric tons (MMT) based on the nationwide survey of 6,808 rice standard fields conducted by KOSIS from September 15-24, 2010 to gauge domestic rice production for 2010, which is the lowest level of rice production estimate since 1980 as well as down 11.6 percent from last year¡¯s.  KOSIS added that major reasons of rice reduction have been caused by the reduced acreage and lower yield affected unfavorable weather condition. (Korean: CSC)

http://www.nongmin.com/article/ar_detail.htm?ar_id

 

Surging International Grain Price May Increase Meat Price in Korea Next Year [Korean OSY]

http://economy.donga.com/0113/3/0113/

Summary: Futures market price of corn and soybean hit year-high in October.  According to Chicago futures market, price of wheat, corn, and soybean recorded $264, $208, and $417 per ton on October 8, which was 35.4%, 41.5%, and 10.3% higher than one year earlier.  Many market analysts showed worries over possible ¡°Agflation¡±, and Korean grain industry traders and government agencies forecasted that the surging international grain price will put a pressure on the price of meat produced in Korea in the coming year.

 

Russia Extends Grain Export Embargo Until July Next Year, AFP [Korean, OSY]

http://www.yonhapnews.co.kr/international/2010/10/23/

Summary: AFP reported on Oct. 23 that Vladimir Putin, Russian Prime Minister, had decided to extend the embargo on grain exports until July next year.  Russian Ministry of Ag. announced on Oct. 20 that total grain harvest this year would be 10 percent less than last year due to unfavorable weather condition.

 

5. Livestock Issues

 

BBQ under investigation...for mislabeled chicken [English, CSY]

http://www.koreaherald.com/national/Detail.jsp?newsMLId

Summary: A branch of Korea¡¯s highest-selling fried chicken franchise is under investigation for allegedly falsifying labels on their menus, police said Monday. The records of BBQ Chicken¡¯s flagship restaurant are currently being reviewed over charges that it falsified the country of origin labels of certain items on their menu as being domestic. The restaurant was subjected to a search and seizure on Sept. 27, as part of an investigation that ¡°has been going on for a while,¡± police officials said.  BBQ chicken said that it was a simple mistake, caused by a single supervisor at their Songpa-gu location.

 

The investigation started after a routine inspection on April 22 found that the restaurant had labeled their ¡°Boneless Cracker Chicken¡± and their ¡°BBQ Drumsticks¡± on their menu as domestic even though the products also contained chickens from Brazil and the U.S.

 

MIFAFF Minister believes the import conditions for Canadian beef should be tighter than U.S. beef [Korean: BYK]

http://news.naver.com/main/read.nhn?mode=LSD&mid

Summary: Minister of Agriculture stated during the National Assembly audit that he thinks that the import conditions for Canadian beef should be stricter than those for U.S. beef. He added that as Korea is only importing beef from under 30 months from the United States, the age limit for Canadian beef should also be under 30 months.

 

Fluid Milk Producers Drop Price by 9 to 14 Percent as Fair Trade Committee Investigates Price Fixing [Korean, OSY]

http://www.cbs.co.kr/nocut/show.asp?idx=1605023

Summary: Seoul Dairy Co. and other fluid milk producers dropped price as much as 14 percent earlier this week.  Many market analysts believe that the price decrease is a gesture to cope with the on-going investigation by the Fair Trade Committee for price fixing.  If the investigation reveals any proof of price fixing among the suppliers, there will be heavy amount of fine charged to the suppliers.  The price drop is likely to alleviate the government penalty.

 

MIFAFF States that the Avian Influenza found in a duck farm is low pathogen [Korean: BYK]

http://www.mifaff.go.kr/gonews/content_view.jsp?newsid

Summary: MIFAFF announced on Oct. 16 that the avian influenza found in a duck farm in Yeasan, Choongchungnam-do, was found to be a low pathogen AI (H7/N7)

 

Australia beef exports hit by appreciation of the Australian dollar value [Korean: BYK]

http://www.hani.co.kr/arti/international/

Summary: Australia is beginning to loose its price competitiveness in its beef exports due to the appreciation of the Australian dollar value.  In September, 2010, total beef imports from Australia marked 89,737 MT whereas the import from United States marked 68,519 MT.  The market share for the first nine months was 48.1 percent for Australia and 36.7 percent for U.S. beef.  The import number is based on the amount that cleared quarantine inspection and does not match with actual customs cleared amount. 

 

 

Packaged Kimchi Producers Raise Retail Price by 18 to 25 Percent [Korean, OSY]

http://economy.donga.com/Economy_RealTime/

Summary: Jong-Ga-Jip, the leading producer of packaged Kimchi that has over 60 market percent, announced that it will raise the retail price by 18 percent from October 5.  Other packaged Kimchi producers have announced similar price increases.  Price of both fresh Korean cabbage and packaged Kimchi are likely to remain high until main harvest season of fresh Korean cabbage starts around later part of October.

 

30 Traditional Wet Markets Are Being Closed Each Year [Korean, OSY]

http://kr.news.yahoo.com/service/news/shellview.htm?linkid

Summary: According to a report by the Bureau of Small to Medium Size Business, there were a total of 1,550 traditional wet markets throughout S. Korea as of 2008, which was 145 less than five years earlier.  In other words, each year about 30 traditional wet markets were closed due to the expansion of modern, mass retail industry.

 

Shortage of Cabbage in Korea Disrupts Cabbage Supply in China [Korean, OSY]

http://kr.news.yahoo.com/service/news/shellview.htm?articleid

Summary: A Gwangzou newspaper reported on October 13 that price of cabbage in China has surged because of sudden rise in purchases by Korean importers.  According to the article, Korean importers have purchased harvest rights of many cabbage farms in Shandong peninsula, a leading producing area of cabbage in China.  As a result, price of cabbage has surged from 550 yuan to 850 yuan per ton in China.

 

Mak-Gul-Lee (Korean Rice Wine) Fever Still Continues [Korean, OSY]

http://www.yonhapnews.co.kr/economy/2010/10/13/

Summary: Sales of Mak-gul-lee (cloudy type Korean rice wine) in leading hypermarket chains remained strong in September, which indicates that consumers¡¯ strong interest in this traditional local liquor is likely to continue for some time.  Sales of Mak-gul-lee in Shinsegae E-Mart and Lotte Mart grew 43% and 176% respectively in September.  It has been two years since Mak-gul-lee fever started in Korea, and many market analysts have suggested recently that the fever will be on a decline in the second half of this year.  However, the sales results so far this year has confirmed opposite trend.

 

Sales of HMR Products Increase 67% in Shinsegae E-Mart Stores [Korean, OSY]

http://economy.donga.com/Economy_RealTime/3/01/

Summary: Shinsegae E-Marts reported that sales of Home Meal Replacement products has increased 67 percent so far this year compared to last year.  The hypermarket chain added that it will increase the number of single serving HMR products in the store to 200 by the end of this year to attract more single and DINK (duel income, no kid) customers to the store.

 

Fresh Cabbage Price Declines Rapidly [Korean, OSY]

http://economy.donga.com/Economy_RealTime/3/01/=1

Summary: Retail price of fresh cabbage is on a rapid decline.  Price survey revealed that leading hypermarket chains were selling at as low as W2,670 per head on October 21, which is quite lower than the highest level, W9,800 per head, surveyed on Sept. 28.  As more farms start to ship new harvests through November, retail price of fresh cabbage is likely to decline further.

 

Hypermarket Stores Launch Smart Phone Shopping Tools [Korean, OSY]

http://economy.donga.com/Top_Feed/3/0113/

Summary: Shinsegae E-Mart, the leading hypermarket retailer, introduced on Oct. 22 several shopping assistance tools targeting customers with smart phones.  ¡®E-Mart Today¡¯ application allows customers to locate the nearest E-Mart store and promotions offered by the store.  ¡®Shopping Planner¡¯ provides shopping tips and product details on over 10,000 recommended products developed based on sales performance and customer comments database.  ¡®E-Mart Menu¡¯ provides recipes on over 600 Home Meal Replacement products sold in the store.  Customers can even participate in Social Network Service (SSN) through these E-Mart smart phone applications while shopping and exchange product information and shopping tips.

 

Large-Scale Retailers Oppose New Retail Industry Regulation Proposal that will Restrict Super Supermarket Business by Large-scale Retailers

http://economy.donga.com/Economy_RealTime

Ruling party and opposition party have agreed to vote for the ¡°Retail Industry Development Law¡±, which is currently pending in the national assembly, by the end of this year.  The decision has brought a strong opposition among the large-scale retail companies.  The proposed law, if implemented as drafted, will ban opening of small grocery stores by large-scale retail companies within 500 meters from designated ¡®traditional industry protection zone¡¯.  Large-scale retailers estimate that about 30 percent of major retail markets in Korea will be affected by the zoning restriction.  Large-scale retailers have been trying to expand with Super Supermarkets (SSM), small size grocery stores, in recent years into neighborhood markets in congested metropolitan areas, while the market for large-scale hypermarket stores is rapidly coming to a saturation point.

 

CEO of Shinsegae E-Mart Attends ¡®E-Mart Monthly PL Convention¡¯ to Strengthen Private Label Business [Korean, OSY]

http://stock.nate.com/news/section/read?section

Summary: Mr. Yong-Jin Jung, CEO of Shinseage E-Mart, attends ¡®E-Mart PL Convention¡¯ every month to encourage more aggressive efforts in the company on private label (PL) business.  ¡®PL Convention¡¯ is a new tool that Shinsegae has adopted.  Held every month, the event features hundreds of newly developed, candidate PL products for internal evaluation by top executive officers of the company, including the CEO Jung.  E-Mart has emphasized that most of the PL products are developed in partnership with small to medium size suppliers, which helps local economy while offering wider shopping options to the consumers.

 

Winter Kimchi Making Will Cost 30 Percent More This Year [Korean, OSY]

http://economy.donga.com/3/0113/

Summary: Due to high price of many agricultural products, the cost of Kimchi making in preparation for the coming winter months should be about 30 percent higher than last year, according to an analysis by Lotte Mart, a leading hypermarket store chain.  Major items surveyed include fresh cabbage (25 percent increase in price), fresh radish (31 percent increase), garlic (90 percent increase), dried red pepper (19 percent increase), and fermented shrimp (20 percent increase).

 

Farm co-op sells cheap cabbage  [English, CSY]

Summary: Nonghyup move comes as Korea¡¯s food price increase exceeds OECD average

http://joongangdaily.joins.com/article/

Nonghyup, the nation¡¯s agricultural co-op, said yesterday that it will sell 3 million heads of Napa cabbage by the end of November at a discount in an effort to ease the nation¡¯s sudden cabbage shortage and stabilize prices.  The move came as Korean food prices in August posted the second-highest increase rate among advanced nations.

 

Korea¡¯s food prices posted the second-highest on-month growth rate at 5.7 percent in August among the Organization for Economic Cooperation and Development (OECD) countries for the second month in a row. The average food price increase among OECD members was 1.4 percent.

 

Imported Chinese Cabbage Auctioned in Garak Wholesale Market for the First Time [Korean, OSY]

http://economy.donga.com/0113/3/0113/

Summary: Forty tons of fresh Chinese cabbage imported by aT (government agency under the Ministry of Ag.) for price stabilization was auctioned in Garak Wholesale Market on October 18.  Winning bid price was quite lower than what aT expected (W600 per head), which indicated that the supply of fresh cabbage was getting better.  The auction of imported fresh cabbage meant a lot to the distributors in Garak Market because no imported fresh cabbage had been transacted in the market since its inception in 1985.  Traders in general who participated in the auction commented that the quality of cabbage was not optimum due to the long transportation time from China, and most of the cabbage auctioned would be heading straight to Kimchi manufacturers due to the poor quality.

 

7. North Korea Issues

 

China promised to supply DPRK with 500,000 MT of rice by January 2011.  DPRK requested the economic aid to China in the summit held in China for August 2010. (Korean: CSC)

http://news.khan.co.kr/kh_news/khan_art_view.html?artid

 

 

ROKG Freezes the Blend ratio of Vegetable oil in Diesel Fuel at 2 percent in 2011 [Korean, CSY]

http://news2.kukinews.com/article/view.asp?page

Summary: The ROKG plans to announce the revised biodiesel supply plan next month (November). The revised plan contains that the biodiesel blend ratio at 2 percent until 2013 and the tax break for biodiesel will be stopped from 2011 except for biodiesel made of recycled cooking oil. The biodiesel made of vegetable oils (soybean and palm oil) will be excluded for tax waiver from next year.

 

Global Warming Happened 2.5 Times Faster in Korea [Korean, OSY]

http://news2.kukinews.com/article/view.asp?page=1&gCode

Summary: According to a report released by the Ministry of Environment on October 11, average temperature of Korean peninsular rose 1.5 degree over the last 10 years, which was 2.5 times higher than the world average.  The average annual temperature of Korean peninsula during 1991 to 2000 was 13.5 degree Celsius, which was 1.5 degree higher than the temperature during 1912 to 1990.  The report forecasted that the acreage of citrus farm in Korea will grow 36 times by 2040 due to the rise of temperature.  Food poisoning incidents were also forecasted to increase 26.4 percent.

 

Kimchi storage items get boost from cabbage prices (JoongangDaily, OHY)

http://joongangdaily.joins.com/article/view.asp?aid

Consumers, hit by rising cabbage prices, are exploring ways to stretch out their supplies of kimchi and resorting to growing their own vegetables to deal with the kimchi crunch.  According to Auction, one of the nation¡¯s biggest shopping Web sites, sales of airtight storage containers for kimchi soared 64 percent from Sept. 10 to Oct. 9. Other popular products include home vacuum packaging devices, which can help keep kimchi fresh for longer periods by sucking out the air from the wrapper after being sealed

 

MIFAFF to provide explanation about the country-of-origin labeling requirements [Korean: BYK]

http://www.mifaff.go.kr/gonews/content_view.jsp?

Summary: MIFAFF will host a series of conferences throughout the nation and try to provide explanation to the relevant industry about the most updated regulations for country-of-origin labeling.  The explanation for the Seoul area will take place at 2 p.m. on October 25.

 

RDA develops new citrus variety [Korean: BYK]

http://www.ytn.co.kr/_ln/0103_201010170534212662

Summary: RDA announced that it had developed a new variety of citrus and that it was in the process of distributing the seedlings to the citrus farmers.  These new varieties will be used to replace the old citrus trees and will also avoid paying royalties to Japan who had developed the previous citrus varieties being grown in Jeju Island.

 

Part of the Cadmium Octopus was from China [Korean, OSY]

http://news.chosun.com/site/data/html_dir/2010/10/

Summary: Prosecutors office investigation revealed that part of the octopus that was used in the safety test of the Seoul city government last month was imported octopus from China.  The test found high amount of cadmium and caused a scandal over the safety of eating locally caught octopus because a follow up test by KFDA indicated opposite result.  Prosecutors office has arrested two traders for violating country of origin label regulation by selling imported Chinese octopus as locally caught octopus.  By the way, even after the dispute with KFDA, Seoul city government still maintains health recommendation that head and intestine part of locally caught octopus should not be consumed due to potential risk of cadmium and other heavy metals.

 

MIFAFF appointed the First Vice Minister Kim, Jae Soo as the head of a task force to reform agricultural subsidy program.  The Task force is supposed to reform the subsidy program to help Korean agriculture equipped with competitive edge by the end of 2010. (Korea: CSC)

 

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

 

Korea plans to expand the assistance budget of ODA to 4 trillion Korean Won (equivalent to 0.25 percent of GNI) by 2015, up 2.66 trillion Korean Won from current 1.34 trillion Korean Won (equivalent to 0.1 percent of GNI) in 2010.  70 percent of Korean ODA is to make direct support to individual countries while 30 percent indirect support through the UN. (Korean: CSC)

http://news.joinsmsn.com/article/aid/2010/10/26/

 

 

The information in this report was compiled by the Agricultural Trade Office (ATO) at the U.S. Embassy in Seoul, South Korea. The press summaries contained herein do NOT reflect USDA, the U.S. Embassy, or other U.S. government agency official policy or view point. U.S. food exporters can learn more about market opportunities in South Korea by reviewing ATO Seoul¡¯s Exporter Guide, Retail Food Sector Brief, and other reports available at www.fas.usda.gov by clicking on ¡°attaché reports¡±.

 

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Agricultural Trade Office, U.S. Embassy - Seoul
Tel: 82-2-6951-6848 Fax: 82-2-720-7921
Email: atoseoul@state.gov