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Food News Clipping

January 31, 2014

2014.02.04

FAS/Seoul Monitoring of Media Reporting on Agricultural Issues

Today's Date:   Friday January 31, 2014

For Coverage:   January 15 ~ 31, 2014

 

 

1. BILATERAL/MULTILATERAL ISSUES

 

The Third RCEP negotiation completed, agreeing to form 4 work groups on cooperation norms [Korean, KSY]

http://news.sbs.co.kr/section_news/news_read.jsp?news_id=N1002200872

Summary: The 3rd Regional Comprehensive Economic Partnership (RCEP) negotiation was held in Kuala Lumpur, Malaysia for three days (until the 24th). The talks made progress in the area of cooperation norms, agreeing to organize work groups for competition, intellectual property rights, dispute resolution, and economic and technical cooperation. The 4th negotiation will be held in China this April.

 

MOTIE establishes TPP measure committee, strengthening the support for TPP [Korean, KSY]

http://biz.chosun.com/site/data/html_dir/2014/01/19/2014011900771.html

Summary: The Korean government established a TPP measure committee. Since November 2013, the government has shown great interest in the participation. Preliminary bilateral talks are being held with the 12 TPP member countries. The committee, led by Director General Choi Donggyu, is a governmental action to reinforce the bargaining power. Once the participation is confirmed, the committee will be promoted to a task force to join the TPP.

 

2. ECONOMIC ISSUES

 

Agricultural Imports of last year were $153 billion, exports were only $18 billion due to big exports of processed foods which gets only 25% customs benefit [Korean, KJM]

http://www.hani.co.kr/arti/economy/economy_general/621002.html

Summary: The Imports of agricultural products from our FTA trading partners have abruptly increased by 30% yearly, since 2007. Whereas exports of domestic products, hasn¡¯t even yet enjoyed the benefits of preferential tariff which has raised many questions of its efficiency.  A member of Korea Rural Economic Institute claims that as imported raw materials are included in processed foods of agricultural products, those imported materials play a big role in the whole Korean agricultural export market, there are struggles domestic manufacturers to gain benefits of preferential tariff when they are required to produce certificate of origin.

 

3. GRAIN & OILSEED ISSUES

 

Rice consumption on continuous decrease [Korean, KSY]

http://news.kbs.co.kr/news/NewsView.do?SEARCH_NEWS_CODE=2798670&ref=A

Summary: The amount of rice consumed by Koreans in 2013 was 67.2kg per person, which is a 3.7% decrease from that of 2012. The rice consumption per day also lessened to 184g per person. This record is less than the half of the amount consumed in 1970.

 

Self-sufficiency rate of wheat drops below 1% again [Korean, KSY]

http://www.nongmin.com/article/ar_detail.htm?ar_id=227685&page=undefined

Summary: The self-sufficiency rate of wheat in Korea dropped below 1% in 2013. According to MAFRA, the production of wheat was 19 thousand tons, with the self-sufficiency rate being only 0.9%. The downsizing of wheat from 2011 to 2012 farm has lead to a decrease in production. The wheat production is expected to rise as MAFRA plans to subsidize the wheat farms with 400 thousand won per hectare.

 

4. LIVESTOCK ISSUES

 

Current AI virus is presumed to be carried by migratory birds¡¦ AI advances toward inland areas of Chungbuk [Korean, KSY]

http://news.kukinews.com/article/view.asp?page=1&gCode=kmi&arcid=0007983952&cp=nv

Summary: According to a epidemiological investigation commission of MAFRA, the current AI virus is presumed to be carried by migratory birds. The assumption is based on three facts: the previous AI outbreaks in Korea were caused by H5N1 virus not H5N8, there have not been any traces of H5N8 virus in 2.05 million bird specimens for the past three years and, the affected area is concentrated on the west coast near the migration habitats.

 

H5 antigen was detected in ducks from the farm in Jincheon, Chungbuk. This is the first AI outbreak in Chungbuk ever since 2003. It seems that the virus is advancing toward the inland areas. Moreover, the feces from the migratory bird in Changnyeong, Gyeongnam showed positive on the test. A standstill order was imposed upon 48 farms in the 10km radius, and spraying is done by unmanned helicopters.

 

Another suspected AI report in Miryang [Korean, KSY]

http://news.khan.co.kr/kh_news/khan_art_view.html?artid=201401290909011&code=940202

Summary: Another suspected AI report was filed in Miryang, Gyeongnam, after 70 native chickens in the farm died around 10:40 PM on the 28th. It is the first time any poultry died in the Gyeongnam region. The provincial government imposed a standstill order on 133 farms in the 10km radius. The results will be out on the 29th.

 

Regulations on breeding poultry near the Migratory bird¡¯s route. [Korean, KJM]

 http://www.nongmin.com/article/ar_detail.htm?ar_id=228001&page=undefined

To prevent the expansion of AI(Avian Influenza), the government has decided to push forward with regulations on breeding poultry near migratory bird¡¯s route. Likewise, migratory birds routes will be scrutinized to alert the farmers nearby and for the time being, vehicles and people will be restricted entering the main reservoirs. 

 

Avian Influenza Spreads Further North ¡¦ Threatens Seoul Metropolitan Area [Korean, OSY]

http://news.donga.com/3/all/20140127/60420079/1

Summary: Ministry of Agriculture & Rural Affairs reported that a chicken farm in Buyeo, Chungnam province tested positive for H5N8 Avian Influenza virus on January 26.  It was the first AI case confirmed in chicken farm after a series of outbreaks confirmed in duck farms, the Ministry added.  Some 1.5 million chickens in farms within three kilometers from the AI farm would be culled as a result.  Additionally, migrating birds in Sihwa Lake, in direct vicinity of the Seoul Metropolitan Area, were tested positive for H5N8 AI virus on January 25, which suggested that AI was spreading further north.

 

8 farms diagnosed with AI¡¦ Virus also found in migratory goose [KSY, Korean]

http://www.hankyung.com/news/app/newsview.php?aid=2014012230111

Summary: The number of farms confirmed with the diagnosis of AI increased from 4 to 8. Inspection of AI is currently being done in 6 other farms. The number of poultry designated to be culled is 0.4 million in total. The virus was also detected in a winter migratory goose. The carcass was collected in Dongrim reservoir in Gochang, Jeonbuk. According to MAFRA, the H5N8 type virus found in the goose is identical to that of the Gachang ducks. This means that the whole country is under the danger of infection as this species of goose tend to wander around.

 

H5N8 AI virus detected in a duck farm in Buan for the third time, escalating concerns [Korean, KSY]

http://news.sbs.co.kr/section_news/news_read.jsp?news_id=N1002193266

Summary: Highly pathogenic H5N8 AI virus was detected for the third time in another duck farm in Buan, Jeonbuk. According to MAFRA, the virus identified in three duck farms is identical to the virus found in the carcass of ducks in Dongrim reservoir. MAFRA decided to cull all the poultry in the 500m radius.

 

Jeonbuk culls 138 thousand ducks and chickens [Korean, KSY]

http://www.yonhapnews.co.kr/bulletin/2014/01/20/0200000000AKR20140120193300055.HTML

Summary: After the outbreak of avian influenza on the 16th, 138 thousand ducks and chickens were culled and 1.96 million eggs were discarded. 7 farms in Gochang and 7 farms in Buan went under the cull. The Jeonbuk government explained that the 11 farms that held high possibility of infection were included in the cull as well.

 

Avian flu in North Jeolla found in seasonal ducks [English, CSY]

http://koreajoongangdaily.joins.com/news/article/article.aspx?aid=2983833&cloc=joongangdaily|home|newslist1

Summary: The government yesterday confirmed that avian influenza (AI) killed a flock of migratory birds at a reservoir in Gochang County.  If the birds were the source of AI outbreaks on poultry farms in the counties of Gochang and Buan in North Jeolla, more outbreaks could occur along their migratory route.  Since the outbreak of bird flu last Friday, authorities have culled 190,000 ducks and chickens at poultry farms in North Jeolla and imposed a 48-hour ban on movement of poultry raisers and their vehicles in the areas.

 

Highly pathogenic bird flu discovered at a second farm [English, CSY]

http://english.hani.co.kr/arti/english_edition/e_national/620518.html

Summary: A strain of highly pathogenic avian influenza, or bird flu, has been detected in samples taken from a duck farm in Buan County, North Jeolla Province. This was the second duck farm where suspicious signs were reported on Jan. 17. The South Korean government placed a temporary ban on transportation by poultry and livestock workers and their vehicles in North and South Jeolla Provinces and Gwangju. The banwill last until the end of today.

 

According to the Ministry of Agriculture, Food, and Rural Affairs on Jan. 19, bird flu was detected in all the samples taken from two duck farms in Buan County. After the first report was received from a duck farm in Shillim Township, Gochang County, North Jeolla Province on Jan. 16, suspicious signs were reported on Jan. 17 and 18 by duck farms in Julpo Township, Buan County. Of these reports, the Ministry announced that the H5N8 strain of highly pathogenic bird flu was confirmed in the samples collected on Jan. 17 in Julpo Township, Buan County. This was the same strain as the one found in Shillim Township.

 

Avian Flu Outbreak Tracked to Migratory Birds [English, CSY]

http://english.chosun.com/site/data/html_dir/2014/01/21/2014012100692.html

Summary: A virulent bird flu outbreak in North Jeolla Province, the fifth outbreak in the country, was caused by infected Baikal teals, making it likely that the migratory birds will spread the virus to other areas.  Health authorities are on full alert because the migratory birds, which stay in the region until February, will fly over the densely populated Seoul metropolitan area as they head north toward Russia in March.

 

Sales of Duck Meat in Retail Stores Decline as Much as 33 Percent since Outbreaks of AI [Korean, OSY]

http://news.donga.com/3/all/20140121/60294600/1

Summary: Sales of duck meat in local retail stores have reportedly declined 8 to 33 percent since outbreaks of Avian Influenza in duck farms in Junra province on January 16.  Retail stores commented that the AI scare would continue to affect the sales for at least one month.

 

Ducks in Gochang, Jeonbuk diagnosed with HPAI - 20 thousand ducks slaughtered [KSY, Korean]

http://www.yonhapnews.co.kr/society/2014/01/17/0706000000AKR20140117031100055.HTML?template=5565

Summary:  Health authorities took preventive measures when a duck farm in Gochang, Jeonbuk was diagnosed with highly pathogenic avian influenza (HPAI). The Jeonbuk provincial government received a report of suspected AI yesterday (16th).  Through an inspection of the sample brought from the farm, the outbreak was confirmed. The provincial government decided to slaughter 20 thousand ducks from the farm.  30% of the destruction has been completed by 500 workers of the farm and the government. Fortunately, no further extermination will be done, since there are no other poultry farms in the 500m radius.

 

Chilean pork to be imported customs-free [KSY, Korean]

http://www.nongmin.com/article/ar_detail.htm?ar_id=227554&page=2

Summary: The tariff on Chilean pork will be abolished. According to the Korea Customs Service (KCS), 473 agricultural items that are labeled ¡®elimination in 10 years¡¯ will be imported customs-free from this January. These items include Chilean pork, frozen fruits, kiwi, apple juice, and skates. On the other hand, customs duties will still be levied on the items such as rice (which was excluded from market opening), fresh apples, pears, and other agricultural products that discussion of tariff reduction is postponed after the DDA talks. The importation of Chilean customs-free product surged to 96.6%, and trade between Korea and Chile is expected to increase further.

 

High time for Hanwoo [KSY, Korean]

http://joongang.joins.com/article/aid/2014/01/17/13250621.html?cloc=olink|article|default

Summary: Korean Hanwoo beef cattle farms are enjoying their high time. Concerns surrounding radioactive contamination of marine products have lead to an increase in demand for Hanwoo. Furthermore, big retailers are purchasing large amount of Hanwoo as Korean Lunar New Year holidays approach. Hanwoo farms are now increasing the number of fertile cows.

 

5. MARKETING ISSUES

 

Sales of Instant Noodle Exceeds 2 Trillion Won in 2013 [Korean, OSY]

http://news.donga.com/3/all/20140127/60444397/1

Summary: Sales of instant noodle products in Korea amounted to 2 trillion won (about $1.9 billion) in 2013, up 1.5 percent from the previous year according to the industry.  Despite increased consumer attention to healthy diet and continued decline of young population, sales of instant noodle products made a solid growth partly due to launchings of new recipes and increased trend toward outdoor consumption.  Nongshim remained the leading supplier of instant noodle by taking 66.5 percent of the market sales, followed by Ottoogi (13.5 percent) and Samynag (11.7 percent).

 

Lotte-Nestle to Join Force to Expand Instant Coffee Business in Korea [Korea, OSY]

http://www.hankyung.com/news/app/newsview.php?aid=2014012770871

Summary: Lotte Food, a leading food conglomerate in Korea announced on January 27 that it had agreed to acquire 50 percent share of Nestle Korea to jointly establish Lotte-Nestle Korea.  Both Lotte and Nestle remain minor players in instant coffee mix market in Korea and the joint partnership is to expand the business.  Sales of instant coffee mix market in Korea amounted to 1.2 trillion won (about $1.1 billion) in 2013.  Nestle accounted for only 3.7 percent of the market sales while Lotte¡¯s share was even less 1.4 percent.

 

Sales of High-Caffeine Beverages will be Banned in Elementary to High Schools from February ¡¦ TV Commercials will Also be Restricted between 5 to 7 P.M., MFDS [Korean, OSY]

http://www.hankyung.com/news/app/newsview.php?aid=2014012807431

Summary: Ministry of Food & Drug Safety (MFDS) announced that sales and TV commercials of high-caffeine beverages (so called ¡°energy drinks¡±) will be restricted from February.  High-caffeine beverage is defined as products that contain 0.15 mg or higher amount of caffeine per mL according to MFDS.  One example of such product is Red Bull that contains 0.25 mg of caffeine per mL.  Sales of high-caffeine beverages will be banned in elementary to high schools as well as in public retail outlets designated by the local government.  TV commercials of high-caffeine beverages will also be banned from 5 to 7 p.m.  

 

Ourhome Co. Offers ¡°Nature Day¡± Program ¡¦ No Meat Dish for One Day in a Week [Korean, OSY]

http://news.donga.com/3/all/20140123/60372988/1

Summary: Ourhome Co., the leading contract feeding company in Korea that services over 500,000 meals a day announced on January 23 that it would start to offer ¡°Nature Day¡± program in its contract feeding restaurants.  ¡°Nature Day¡± is a consumer campaign getting popular around the world that promotes reduced consumption of meat products.  Customers of the contract feeding restaurants under Ourhome will be given a choice to eat ¡°Nature Day¡± meal, which includes no meat products, one day every week.

 

Sales of Products for Home Juice Making Soar [Korean, OSY]

http://news.donga.com/3/all/20140121/60319751/1

Summary: It is reported that more of Korean consumers are joining home juice making.  As a result, sales of related products are showing a strong growth.  According to E Mart, sales of home juice squeezer have increased 53 percent in January 2014.  Sales of ingredients fruits have also increased 13 to 474 percent (pear 394 percent, tomato 474 percent, frozen mango 64 percent, frozen raspberry 13 percent).

 

Law Makers Propose Stronger Penalties to Country of Origin Labeling Violations [Korean, KJM]

http://www.foodnews.co.kr/news/articleView.html?idxno=48986

Summary: A group of National Assembly members proposed a revision to ¡®Agricultural & Fishery Product Country of Origin Labeling Regulation¡¯ on January 20.  The revision called for stronger penalties to COO labeling violations.  The lawmakers explained that the level of COO violations in the retail and food service market still remained very high, as indicated by the fact that some 3,700 cases of COO violations were reported on average each year over the last four years.

 

Price of Local Hanwoo Beef Soars as Consumers have Less Gift Options for Upcoming Lunar New Year¡¯s Day This Year Partly Due to Outbreaks of Avian Influenza and Safety Concerns on Seafood under Radiation Leaks from Japan [Korean, OSY]

http://news.donga.com/3/all/20140120/60294028/1

Summary: Wholesale price of local Hanwoo beef marked 14,157 won per kilogram on January 18 last week, which was 15 percent higher than the price last year.  Price of gift packs of Hanwoo beef targeting upcoming Lunar New Year¡¯s Day also rose about 3 percent compared to last year according to local retail stores.  Marketers point out that Hanwoo beef has emerged as the leading gift item for Lunar New Year¡¯s Day this year partly because of high safety concerns that consumers have developed on other products, poultry meat and seafood in particular.  Demand for poultry meat is showing a sharp decline since outbreaks of Avian Influenza in local farms last week.  Safety concerns on seafood remains very strong due to continued reports of radiation leaks from nuclear power plants in Japan.

 

AB In-Bev Reacquires OB Brewery at $5.8 Billion ¡¦ Reflects Strong Potential of the Korean Beef Market [Korean, OSY]

http://invest.chosun.com/site/data/html_dir/2014/01/20/2014012002598.html

Summary: AB In-Bev, the largest beer company in the world announced that it had completed an acquisition deal with KKR (investment fund, current owner of the brewery) to reacquire OB Brewery at $5.8 billion.  AB In-Bev sold the brewery in 2009 at $1.8 billion to KKR with a right to repurchase the brewery within 5 years.  AB In-Bev commented that the beer market in Korea is expected to grow over 13 percent between 2012 to 2022.

 

Korean Consumers¡¯ Direct Purchases from Foreign Internet Retailers Exceed 10 Million Shipments in 2013, Up 40 Percent from 2012 [Korean, OSY]

http://news.donga.com/3/all/20140120/60268619/1

Summary: According to Inchon Airport Customs Office, the number of shipments brought into Korea by Korean consumers¡¯ purchases from foreign internet shops reached 10 million in 2013, up 40 percent from 2012.  The U.S. was the leading origin of the purchases by accounting for 80 percent of the shipments (8.2 million shipments), followed by Germany (480,000 shipments) and China (400,000 shipments).  KORUS FTA, which expanded duty free limit on personal purchases from foreign retailers from $100 to $200, was the key reason.

 

Premium Chocolate Shops Expand in Korea [Korean, OSY]

http://news.donga.com/3/all/20140115/60183564/1

Summary: It is reported that premium chocolate shops are expanding in Korea.  Godiva that entered Korea in 2012 with two outlets added six new outlets in the market in 2013.  Godiva is planning to open about 10 new outlets in 2014.  Lloyds Chocolate, a Japanese business, entered Korea in 202 with one outlet and added two new outlets in 2013.  Lloyds Chocolate plans to open additional outlets particularly in department stores this year.  Armani Dolche, a premium chocolate shop under the luxury fashion company Armani opened its first outlet in Korea in 2013.  There are other premium chocolate shops popping up in Korea that offer a wide variety of high-end products, mostly imported, in the market.

 

Shinsegae Food Co. Enters HMR Business [Korean, OSY]

http://www.hankyung.com/news/app/newsview.php?aid=2014011520341

Summary: Shinsegae Food, a leading food service distributor in Korea, announced that 130 products under its first HMR brand, ¡°YoRiGongSik¡± are scheduled to be launched in hypermarket retail stores within this month.  Shinsegae Food explained that its HMR products are ¡®Ready to Cook¡¯ or ¡®Ready to Heat¡¯ products and will satisfy those consumers who want quick and quality meal options.

 

6. OTHER MISCELLANEOUS ISSUES

 

Nut products are a trend in Lunar New Year¡¯s rush [Korean, KJM]

http://www.nongmin.com/article/ar_detail.htm?ar_id=228125&page=undefined

Summary: As the Lunar New Year¡¯s approaches; a unique gift set that includes mixture of traditional nut products, dried persimmons, and even apples and pears have been a hot trend in the market. According to National Forestry Cooperative Federation, the price of walnuts will increase despite the fact that walnuts crop has increased greatly due to producers preservation for the upcoming Chuseok. For the pine nut, the price has lowered thanks to increase in harvest compare to the bad crop of last year. However, chestnut price has grown due to great purchase in festive season even with the record of most crops in recent 4 years. With these changes in the nut product market, a new gift set that includes combination of nut products and fruits are predicted to flourish in the market.

 

Putting more weight on supplying environmental friendly livestock products up to 5%, until 2017. [KSY, Korean]

http://www.foodnews.co.kr/news/articleView.html?idxno=48932

SUMMARY: In order for domestic livestock industry to develop as an industry that produces qualitative and safe products, Ministry of Agriculture came up with comprehensive countermeasures that persists environmental friendly livestock products. The countermeasures are expending the supply of environmental friendly livestock products from 0.7% to 5%. The measures will minimize environment damage; facilitate supplying environmental friendly livestock products and putting focus on environmental production. Likewise, establishing foundation of distribution and consumption, and enhancing safe supply of feedstuff will lead the livestock industry to continuous development.

 

SPC group decides to purchase one billion won worth of domestic agricultural product for 5 years term [Korean, KJM]

http://www.foodnews.co.kr/news/articleView.html?idxno=48923

Summary: SPC group will be purchasing domestic agricultural product, including wheat, worth of a billion won for the next 5 years until 2018. Through their agreement contracted with Ministry of Agriculture and other agricultural association, domestic farm products will be supplied to SPC group enabling them to increase their profit by producing high qualitative goods and farming family securing their source of demand. Likewise, SPC group will export and promote domestic agricultural products to overseas through the internationally expending bread store, Paris baguette.

 

7. MIFAFF PRESS RELEASES

 

Standstill order issued in Gyeongi and Chungnam province, Daejeon, and Sejong [Korean, KSY]

http://www.mafra.go.kr/list.jsp?&newsid=155445301¡×ion_id=b

Summary: According to MAFRA, a standstill order was issued in Gyeonggi and Chungnam province, including Daejeon and Sejong city from 6:00 AM to 6:00 PM on the 27th. During this period, all the farms, facilities, vehicles related to poultry will be sterilized.

 

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 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