Today's Date:     Wednesday, February 15, 2012

1. BILATERAL/MULTILATERAL ISSUES

Korean government starts selecting products excluded from tariff reduction under Korea-China FTA [Korean: YJY]
http://biz.heraldm.com/pop/NewsPrint.jsp?newsMLId=20120215000108
Summary: In face of launching the negotiations for the Korea-China FTA, the Korean government started to distinguish agricultural, livestock, and fishery products that would be excluded from tariff reduction.  MIFAFF announced that specialists will have discussion to pick out items that will be excluded from tariff commission.  Loss in the agricultural sector due to Korea-China FTA is expected to be massive, even greater than the loss caused by KORUS FTA.  However, since China covers vast area and information is not systemized, how much FTA will affect each product is not analyzed.

Boosting of orange imports expected to continue with KORUS FTA [Korean: YJY]
http://www.nongmin.com/article/ar_detail.htm?ar_id=198901
Summary: It looks like imports of orange will continue on the climb, affecting pears, apples, and even summer fruits like watermelons.  According to the Animal, Plant, and Fisheries Quarantine and Inspection Agency (QIA), imported oranges that went through inspection amounted to 423 cases, weighing 7,257 tons in total.  This number is almost equivalent to the figures of January, 2011 when greatest number of oranges were imported in history.   With the KORUS FTA, cheap oranges will flow in and the tariff rate will be reduced from 50% to 30% from March to August.  KREI forecasted that 13% more of oranges will be imported once KORUS FTA comes into effect.

2. ECONOMIC ISSUES

Korea’s terms of trade lowest since 2008 [English: YJY]
http://www.koreaherald.com/pop/NewsPrint.jsp?newsMLId=20120214000865
Summary: Last year, Korea’s terms of trade recorded lowest in three years since the global financial crisis.  This was due to high oil price driving import costs, whereas export gains have been moderate.  Prices of semiconductors for exports rapidly fell. Korea’s net terms of trade index for goods was 78.9 in 2011, 8.3% lower than previous year.

Processed food imports up, agricultural imports down [Korean: YJY]
http://www.nongmin.com/article/ar_detail.htm?ar_id=198904
Summary: With the recent change in eating habits, imports of processed food have increased at the expense of imports of agricultural goods.  KFDA recently announced that processed food made up 27% of imported food in 2001, but climbed 36% in 2011.  On the other hand, agricultural products fell from 70% to 59% in the same period.  This can be attributed to the fact that more people are eating out and demands for instant food have soared.  Furthermore, Korea continuously imports food primarily from the United States, China, and Australia.  However, one notable point is that Chinese imports are climbing, while American imports are relatively decreasing.

KRW 152.2 billion to be invested in R&D for agricultural and food products [Korean: YJY]
http://www.nongmin.com/article/ar_detail.htm?ar_id=198887
Summary: MIFAFF decided to invest KRW 152.2 billion in R&D for agriculture and food sectors, 13.3% up from last year’s investment.   MIFAFF will particularly focus on supporting 9 areas this year to boost their growth.  They include modernizing facilities, boosting exports, diseases, and climate change.  Most budget will be directed toward bio industry (KRW 53.2 billion), followed by developing value-added food technology (29.1 billion), high-tech production technology (20.1 billion), and export strategy technology (19.7 billion).  Moreover, MIFAFF will provide KRW 100 billion to small and medium enterprises that commercialize advanced technology.

3. GRAIN & OILSEED ISSUES

MIFAFF is to provide agricultural subsidy for cultivating processed rice, beans, and bulk feeds [Korean: CJW]
http://www.hankyung.com/news/app/newsview.php?type=2&aid=2012021449041&nid=

Summary: MIFAFF announced that it will limit subsidy distribution to processed rice, beans and bulk feeds.  Bulk feeds, high in fiber, include corn and hay.  Cabbages and spring onions are exempted from this benefit to prevent overproduction and keep prices at reasonably high levels.

Protein Content Mandated on the Label of Packaged Rice [Korean, OSY]

http://news.donga.com/3/all/20120214/44044604/1

Summary: Packaged rice will be subject to new regulation that mandates labeling of protein content from November 1, 2012, according to the National Ag. Quality Management office.  Rice of protein content 6 percent or lower will be labeled as ‘Su’, meaning superior quality in Korean.  Rice of protein content between 6.1 percent to 7 percent will be labeled as ‘Woo’.  Rice of protein content 7.1 percent or higher will be labeled as ‘Me’.  Rice that have not been tested for the protein content will be labeled ‘Not Tested’.

4. LIVESTOCK ISSUES

Beef prices on the rise, while pork price dwindled [Korean: YJY]
http://www.hankyung.com/news/app/newsview.php?type=2&aid=2012021446511&nid=901&sid=0104
Summary: The price of pork has been plummeting to a level of 30% this year.  Both wholesale price and retail price have decreased by 33.7% and 32.7% from last year’s figures respectively.  Contrastingly, beef price has slightly increased, wholesale price 8.5% compared to last year.  On the other hand, retail price has increased 2.4% in one week.  With campaigns to foster Korean beef consumption, consumption of beef has risen, while consumption for its alternative, pork has decreased.

5. MARKETING ISSUES

Seoul is the 27th Most Expensive City to Live in [Korean, OSY]

http://www.yonhapnews.co.kr/international/2012/02/15/0601360100AKR20120215058800093.HTML?template=2087

Summary: EIU, an England economic research institute released the result of world living cost survey on Feb. 15.  According to the report, Seoul ranked the 27^th most expensive city to live in around the world.  Zurich topped the list, followed by Tokyo, Geneva, Oslo, Paris, and Sidney.  For comparison, Los Angeles and New York ranked 42^nd and 47^th respectively.

Hypermarkets Report Strong Sales Growth of Imported Beer [Korean, OSY]

http://www.yonhapnews.co.kr/economy/2012/02/14/0302000000AKR20120214194100003.HTML

Summary: Sales of imported beer in  Emart showed a 56.2 percent growth so far this year compared to the same period last year.  On the other hand, other alcohol beverages marked sluggish sales growth:  local beer (-4.9%), rice wine (-2.8%), Soju (-4.7%), wine (-1.3%), hard liquor (-3.2%).  Marketers interpret that the strong sales of imported beer is something to do with the implementation of the Korea-EU FTA, which reduces import duty on European beer over seven years.

6. NORTH KOREA ISSUES

North Korean food crisis to be relieved [Korean: CJW]
http://news.naver.com/main/read.nhn?mode=LSD&mid=sec&sid1=100&oid=001&aid=0005512935
Summary: According to KREI, North Korean food crisis will be recovered thanks to increase in food supply within the area, and food aid from the international community. Based on reports from Food and Agriculture Organization (FAO) and World Food Programme (WFP), North Korea is in need of 5.4 million tons of crops with 4.6 million tons of actual production. This is about 8.5% higher than last year. U.S. plans to offer 240,000 tons of food assistance to North Korea in return for abandoning its Uranium Enrichment Program (UEP) and China will give 500,000 tons of food and 250,000 tons of crude oil.

7. OTHER MISCELLANEOUS ISSUES

KFDA to publicize cancer-causing, poisonous products [Korean: CJW]
http://news.chosun.com/site/data/html_dir/2012/02/15/2012021500187.html?news_Head1
Summary: KFDA announced to improve current KFDA regulations and issue a press release immediately so consumers would avoid using cancer-causing, poisonous products in the future.  Last Friday, the KFDA belatedly issued a warning against the harmful effect of the chopsticks made of synthetic resins.   According to a KFDA official, “From today, warning will come immediately when the regulator detects any cancer-causing substances.”

8. MIFAFF PRESS RELEASES

► Shellfish poisoning spreading between March and June from the southern coast is giving Korean
fishermen a headache

► Low-protein rice is better and healthier

► Dry-field farming should be sped up by mechanized process

► MIFAFF is recruiting agricultural development experts