FAS/Seoul Monitoring of Media Reporting on Agricultural Issues

Today's Date:   Monday, August 31, 2015

For Coverage:  August 01 ~ 31, 2015

1. BILATERAL/MULTILATERAL ISSUES

The U.S. and Japan to seek a final compromise on the Trans-Pacific Partnership free trade negotiations[CSY2, Korean]
http://www.hankyung.com/news/app/newsview.php?aid=2015072357971
SUMMARY: The United States and Japan have been continuing to take the initiative to set up the import volumes of U.S. table rice under customs-free.  The U.S. asked Japan to increase it up to 175,000 tons a year while Japan has insisted on importing 50,000 tons.  Even though Japan has considered extending the limit of import volume further this month, Akira Amari, the Minister for Economic Revitalization said “We don’t want to make it an average between both arguments.”  Reportedly, less than 100,000 tons per annum seemed their bottom-line.

Korea-ASEAN Agree to Revise the Bilateral Free Trade Agreement to Adopt "Pre-Export Country of Origin Review Protocol" [Korean, OSY]

http://www.hankyung.com/news/app/newsview.php?aid=2015082328351

Summary: Korea and 10 ASEN countries met in Malaysia on August 10 and signed on a revised Korea-ASEN Free Trade Agreement.  The revision includes introduction of "Pre-Export Country of Origin Verification Protocol" which will allow exporting traders to verify if the product satisfies the COO standards of the importing country in advance.  Under the old COO protocol, Korean exporters often failed to benefit the tariff reduction offered by the FTA because COO verification was done after the product arrived in the importing country.  In the revision, Korea and ASEAN also agreed to accept electronic COO documents.

2. LIVESTOCK ISSUES

Japan sharply lowers import tariffs on U.S. beef and pork[CSY2, Korean]
http://www.yonhapnews.co.kr/bulletin/2015/07/29/0200000000AKR20150729034100009.HTML?input=1195m
SUMMARY: As part of the Trans-Pacific Partnership pact, Japanese tariffs on U.S. beef and pork are expected to cut drastically, reported the Nikkei on July 29^th.  Japan says that it will lower import tariffs on U.S. beef from the current 38.5 percent to 9 percent over the next 15 years.  It also has planned to lower tariffs on inexpensive cuts of U.S. pork, scrapping tariffs on top grade cuts for the next decade.  Japanese government negotiating with the U.S. is preparing a Safeguard, which can apply high tariffs to U.S. imported beef and pork that are sharply increased, to protect their domestic producers.

Price of Hanwoo (Korean Beef) Meat Up 26% This Year due to Gov't Culling Program [Korean, OSY]

http://www.hankyung.com/news/app/newsview.php?aid=2015081924271

Summary: Wholesale price of Hanwoo beef meat marked 17,900 won per kilogram on average in August 2015, which was 26 percent higher than the price at the end of last year.  Surging price of local Hanwoo beef meat is due to the Korean government's culling program that started in 2012 after crash of the market in 2011 for over production.  Total number of producing cow was 1.14 million at the end of June 2015.  The number is likely to further reduce down to 1.04 million next year.

3. MARKETING ISSUES

Korean Gov't Seeks to Create a Grain Trading Company for Efficient Supply of Imported Grain [Korean, OSY]

http://www.hankyung.com/news/app/newsview.php?aid=2015083040331

Summary: Korea Ministry of Agriculture is reportedly working on a project to help create a large-scale, international grain trading company.  Korean government's goal is to secure an efficient supply of foreign grain to the Korean market by the creation of a large-scale grain trading company under Korean nationality that can compete against existing international grain majors such as Cargill.  Korea imports about 16 million metric tons of grain every year but a majority of the trade is via international grain majors.  Korean government believes that heavy reliance on the international grain majors is a serious risk to Korea's efficient and reliable sourcing of grains from the world.  However, a similar project that Korean government carried out failed two years ago (2013) when the grain trading company that was established by the Korea Agro-Fishery Marketing Corporation (under the Ministry of Agriculture) with participation by three private Korean companies closed the business.  The person in charge of the new project mentioned in a press interview that the new project will implement a different approach to the goal this time, reflecting the previous failure.  In the new plan, Korean government's role would be limited to provide financial investment to the new company that will be established by the private sector.  In particular, Harim Group, a leading broiler supplier in Korea, has recently expressed a strong interest in establishing a grain trading company as it acquired a large-scale sea freight shipping company, STX Pan Ocean in 2015.

S. Korea's beer imports surge 23.7 percent this year [English, CSY]

http://english.yonhapnews.co.kr/business/2015/08/19/12/0501000000AEN20150819002400320F.html

Summary:  South Korea's beer imports soared nearly 24 percent in the first seven months of this year, customs data showed Wednesday, amid their growing popularity among local drinkers.  The value of beer imports reached US$77.6 million in the January-July period, up 23.7 percent from $62.7 million a year earlier, according to the data by the Korea Customs Service (KCS).  The KCS attributed the increase to greater domestic demand for more diverse types of beer from across the world.  At the current pace, beer imports are expected to top the $100 million mark for the second year in a row, it said.  By country, Japan was the No. 1 exporter of beer to South Korea in the seven-month period, followed by Germany, Ireland, China and the Netherlands.

'Fruit Flavored Food & Beverages' Get Popular in Korea [Korean, OSY]

http://www.hankyung.com/news/app/newsview.php?aid=2015081032771

Summary: It is reported that many of the new food and beverage products launched recently in Korea incorporate 'fruit flavor'.  Examples include fruit flavored soju (local spirit), fruit flavored whiskey, fruit flavored potato chips, fruit flavored coffee, and even fruit flavored fried chicken.

Wine Becomes the No. 1 Imported Alcohol Beverage in Korea [Korean, OSY]

http://www.yonhapnews.co.kr/bulletin/2015/08/04/0200000000AKR20150804124800003.HTML?input=1195m

Summary: According to the Korea International Trade Association, Korea's wine imports in the first half amounted to $94 million, which accounted for 24.9 percent of overall alcohol beverage imports followed by distilled spirits, 24.1 percent.  As a result, wine became the leading alcohol beverage that Korea imported for the first time in history.  Distilled spirits have seen its share in the imported alcohol beverage market decline continuously over the years.  Distilled spirits was once as high as 70 percent  of Korea's alcohol beverage imports.

Mobile On-line Orders Account for 35 percent of Total Delivery Orders, Domino Pizza Korea [Korean, OSY]

http://www.hankyung.com/news/app/newsview.php?aid=2015080525621

Summary: Domino Pizza Korea reported that mobile on-line orders through smart phones accounted for 35.4 percent of its total delivery orders in June this year, sharply up from 23.4 percent in June 2014.  During the same period, on-line orders through PC has declined from 30.9 percent down to 25 percent.

American Avocado Sales Promotion in Lotte Mart, Seoul [Korean, OSY]

http://app.yonhapnews.co.kr/YNA/Basic/SNS/r.aspx?c=PYH20150731023400013&did=1196m

Summary: Lotte Mart launched a sales promotion on American avocado on August 1 in its flagship store in Seoul.  Each avocado is offered at 2,500 won (roughly $2.17).

Korea Customs Office Investigates 1,000 Korean Consumers for Illegal Importation from Foreign On-line Stores, [Korean, OSY]

http://www.hankyung.com/news/app/newsview.php?aid=2015080222341

Summary: Korean Customs Office (KCO) reported on August 2 that it has identified 1,000 local consumers who apparently violated import regulations when purchasing from foreign on-line stores.  KCO explained that consumers' direct purchases (importation) from foreign on-line stores is allowed only for personal, non-commercial purposes.  KCO pointed out that the 1,000 consumers violated the regulation as they purchased/imported products from foreign on-line stores for resale to other consumers in Korea.  Purchases/importation from foreign on-line store for commercial purposes (resale to local consumers) are allowed for individuals/companies that are officially registered with the local tax authority, KCO added.

4. OTHER MISCELLANEOUS ISSUES

Craze for sweets sweeps Korea [English, CSY]

http://www.koreatimes.co.kr/www/news/culture/2015/08/316_184984.html

Summary: From honey butter chips to fruit-flavored soju, sweet flavors are all the rage this year.  The level of buzz over related keywords confirms the trend.  SK Planet's social analysis system BINS 2.0's look at mentions of "sweet flavor" on social media from January to July shows they surged 135 percent from the same period last year.  SK Planet attributed the "sweet flavor" craze to the popularity of "honey," after confectionery company Haitai's honey butter chips were a huge hit last year.  The level of buzz for "honey" has risen from 214,805 mentions in 2013 to 450,385 in 2014 and 656,127 in 2015.  Honey butter chips have been in hot demand since their release.  The demand for "sweets" is also linked to Koreans' high levels of stress.

Imported fruits gaining popularity [English, CSY]

http://www.koreatimes.co.kr/www/news/biz/2015/08/123_184254.html

Summary: Fruit imports have risen sharply in recent years, riding on growing demand for variety mainly among young people.  As a result, local farmers have had a hard time struggling to protect their market share.  Annual cherry imports tripled to 13,359 tons last year from 4,982 tons three years ago. Mango imports increased more than five times to 10,599 tons in 2014 from 1,892 in 2011, grapefruit imports increased to 10,767 tons from 6,739, while pomegranate imports rose to 10,767 tons from 6,739.  Foreign fruits are increasing their presence thanks to rising popularity among younger generations.