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Food News Clipping

September 2010

2010.10.04

 

South Korea, China Sign on New Container Trailer Shipping Method, which will Save as Much as 12 Hours of Shipping Time Between Two Countries [Korean, OSY]

http://news.donga.com/Economy_List

Summary: South Korea and China signed on a new container trailer shipping agreement that allows trailers carrying export containers to enter the import country and make ¡°door to door¡± deliveries to the importers.  Trailers carrying export containers will be allowed on container ships and car ferries connecting ports between South Korea and China. This new method is expected to save as much as 12 hours of shipping time.  This agreement will go into effect from October this year.

 

S. Korea, Colombia to hold 4th round of free trade talks next week [English, CSY]

http://english.yonhapnews.co.kr/n_business

Summary: South Korea and Colombia will hold their fourth round of free trade negotiations next week, Seoul's trade ministry said Wednesday.  During the five-day talks that start in the Colombian city of Cali, both sides will discuss a variety of issues such as tariff concessions and services, according to the ministry.

 

U.N. food agency to open regional meeting in S. Korea Monday [English, CSY]

http://english.yonhapnews.co.kr/business

Summary: South Korea will open a regional gathering of a United Nations food organization on Monday to discuss ways to secure enough foods in the Asia-Pacific region, the agricultural ministry said Sunday.  The biennial regional conference of the Food and Agriculture Organization (FAO), which runs through Friday in Gyeongju, 371 kilometers southeast of Seoul, will bring together about 350 agricultural officials and experts from 44 Asia-Pacific member countries, the Ministry of Food, Agriculture, Forestry and Fisheries said.  The event will be dedicated to finding out solutions to food shortages suffered in the Asian region as well as discussing ways to boost farm productivity and responses to climate changes threatening regional food production, according to the ministry.

 

2. Biotechnology Issues

 

Over Half of Corn Imported So Far This Year was ¡®GMO¡¯ ¡¦ Imports of ¡®GMO¡¯ Corn Increased 7,900 Times Over the Last Two Years and Eight Months [Korean, OSY]

http://news.donga.com/3/all/20100924/31365522/1

Summary: According to a KFDA report, out of the 1.58 million tons of corn imported through August this year, GMO corn accounted for 0.79 million tons.  Total imports of GMO corn in 2007 was mere 100 tons.  The share of GMO corn in total corn imports increased from 0.005 percent in 2007 to 50 percent this year.  South Korea¡¯s self sufficiency rate for corn remains at 0.7 percent.  It has been 15 years that GMO agricultural product appeared in the market.  Over the years no health risk has been reported in the 25 countries where GMO agricultural products were marketed for either feed or human consumption.  As a result, more people now maintain the idea that prevailing health concerns around GMO are mostly groundless.  Professor K.H. Kyung of Sejong University points out that the safety debate over GMO is rooted from the confrontation between Europe and the U.S. over the control of the international grains market.  S.C. Seo of Rural Development Agency explains that herbicide-resistant GMO crops simply contain proteins, not toxic chemical ingredients, which produce genetic effect to make the crops endure heavy dose of herbicide.  Therefore, final processed foods made of GMO corn or soybean, such as tofu or soy sauce, do not contain the protein or gene responsible for the genetic effect.  The total acreage of GMO crops is 134 million hectares around the world, which is about six times the size of Korean peninsula.  It is estimated that about 30 to 40 percent of all foods consumed in the world are made of GMO agricultural products.  The GMO Food labeling regulation, drafted by KFDA in 2008, that mandates ¡®GMO¡¯ label on all products made of any GMO ingredient is currently sitting in the government, because the government maintains a view that GMO has no serious health risk and there is no technology available that can detect GMO in processed foods.  However, consumer groups are pressuring the government for prompt introduction of stronger GMO labeling regulation.

 

3. Economic Issues

 

International Meat Price Soars to a 20 Year High [Korean, OSY]

http://news.donga.com/Economy/Market/3/0108/20100902/30935467/1

Summary: Hikes of commodity prices, including meat and wheat, bring a concern around the world for Ag. inflation.  According to an article by Financial Times(FT) on Sept. 2, international meat price has reached a 20 year high due to reduced supply from Australia and the U.S.  FAO¡¯s international meat price index rose 16 percent from last year to a highest level since 1990.  Price of lamb meat also recorded a 37 year high.  FT added that increasing demand on meat products from developing markets, such as China and Brazil, is another reason for the price hikes.

 

South Korean¡¯s Per Capita GDP to Recover $20,000 Level This Year, IMF [Korean, OSY]

http://news.donga.com/Economy/3/01/20100906/31010859/1

Summary: International Monetary Funds, IMF, forecasted in its recent report that South Korean¡¯s per capita GDP would be $20,566 this year.  South Korean¡¯s per capita GDP remained under $20,000 level during the last 3 years since topping at $21,651 in 2007.  GDP growth of South Korean economy was forecasted in the report at 6.1% this year, 4.5% in 2011, and 4.1% in 2012.

 

Engel Index Hits a Nine Year High ¡¦ Soaring Ag. Product Price is Part of the Cause [Korean, OSY]

http://news.donga.com/Economy/Market/3/0108/20100908/31038944/1

Summary: Engel Index for the second quarter this year marked 13.3 percent, meaning the food expenditure accounted for 13.3 percent of total household spending, according to Bank of Korea.  This was a nine year high since the third quarter 2001 (13.5 percent).  Analysts believe that the soaring price of agricultural products was one cause of the Engel Index hike.  In the second quarter this year, price of fresh agricultural products rose by 11.8 percent while consumer income rose 5.4 percent compared to the same period last year.

 

4. Grain & Oilseed Issues

 

MIFAFF has recently released measures to cope with the continuously declining rice prices prior to harvest of new crop. 

The government plans to purchase 400,000-500,000 MT of new crop production, which is an estimated portion excessive than actual consumption.  The government has another plan to reduce heavy ending stocks by diverting old stored rice (500,000 MT of 2005 -2008 crops) into alcohol processing and food processing to secure storage capacities in advance of harvest season. (Korean: CSC)

http://www.hankyung.com/news/app/newsview.php?aid=2010083150651

 

Rice Tariffication vanished again this year. (Korean: CSC)

http://www.hankyung.com/news/app/newsview.php?aid=201009146867

http://www.hankyung.com/news/app/newsview.php?aid=2010091472301

Summary: A high official of MIFAFF said that it is hard for Korea to notify rice tariffication to the WTO by the end of September 2010, a deadline of notification, because the progress of internal negotiation with rice farmers has been slow.  

 

5. Livestock Issues

 

S. Korea Requests ¡®BSE Free¡¯ Status to OIE ¡¦ S. Korean Beef May Find a Way to the U.S. [Korean, OSY]

http://www.yonhapnews.co.kr/economy/

Summary: Ministry of Ag. filed a request to OIE to designate S. Korea as a ¡®BSE Free¡¯ country earlier this month, which is crucial for S. Korean beef to reopen the export market in particular to the U.S.  The decision will be made within October, according to the ministry¡¯s announcement on Sept. 23.  

 

Maeil Dairy Co. Earns Carbon Emission Label Certificates on Infant Formula Powders for the First Time in the Industry [Korean, OSY]

http://finance.daum.net/news/finance/photo/MD20100928114808939.daum

Summary: Maeil Dairy Co., a leading dairy processor in Korea, announced on Sept. 28 that infant formula powders that it produces have acquired Carbon Emission Label Certificates, a voluntary standard administered by the Ministry of Environment, for the first time in the industry.  The certificate allows the subject product to include in the label the amount of carbon dioxide produced during the entire manufacturing process.  Maeil Dairy added that it has invested over 1 billion KRW into the manufacturing facility to reduce carbon emission.

 

Korea Certified Free of Foot-and-Mouth [English, CSY]

http://english.chosun.com/site/data/html_dir/2010/09/29/

Full text: Korea has been declared free of foot-and-mouth disease, which affects cloven-hoofed animals, and will now seek to resume exports of pork.  The Agriculture Ministry said the World Organization for Animal Health restored Korea's disease-free status on Monday, five months after the last case of the highly-contagious disease was reported in the nation in May.

 

According to the ministry, the animal health organization recognized the nation's quarantine efforts in the aftermath of the outbreak and its follow-up steps to eliminate the disease. Korea resumed pork exports to Japan in July, and has said it would try to do the same for the U.S. market after receiving the disease-free designation.

 

Korea will push beef exports to U.S.  [English, CSY]

Government seeks end to ban as foot-and-mouth disease outbreak has ended

http://joongangdaily.joins.com/article/view.asp?aid=2926298

Summary: Korea is seeking to restart exports of local beef to the U.S. once the country is deemed free of foot-and-mouth disease, officials said yesterday. Korea confirmed the first outbreak of the highly contagious disease in eight years in early January, leading to the suspension of the two-year-long talks with the U.S. over exports of local beef. The Ministry for Food, Agriculture, Forestry and Fisheries said the disease is considered to be under control in Korea as there have been no reported cases since May following efforts to cull and bury affected livestock by animal quarantine authorities.

 

6. Markeing Issues

 

Is Mak-Gul-Lee Hype Over? ¡¦ Growth Rate of Sales and Production Dips in the Second Quarter [Korean, OSY]

http://www.am7.co.kr/bbs/board.php?bo_table

Summary: The growth rate of sales and production of Mak-Gul-Lee (cloudy type rice wine) continued a decline in the second quarter.  Sales of Mak-Gul-Lee grew, compared to the same period last year, by 106% in April, 99% in May, and 90% in June.  Part of the industry people are worried that the explosive growth of the Mak-Gul-Lee market is finally coming to an end.

  

Sales of Home Baking Products Soar due to a Popular TV Drama [Korean, OSY]

http://www.yonhapnews.co.kr/economy

Summary: ¡°Bakery King Kim-Tak-Goo¡±, is one of the most popular TV dramas in Korea this season.  Thanks to the popularity of the drama, sales of related products have soared recently.  Among others, traders have reported soaring sales of home baking products, including bakery mixes.  According to CJ Jeiljedang, the leading bakery product manufacturer, sales of premixes have increased as much as 45 percent in July-August.

 

Soaring Fresh Produce Price Likely to Continue for More than One Month [Korean, OSY]

http://news.donga.com/Economy/Market/

Supply of fresh fruits and vegetables is reportedly limited due to the damages caused by recent typhoon ¡°Gonpas¡±.  For example, Shinsegae E-Mart hypermarket chain has so far secured only 50 percent of the target volume of Korean pear that it needs for the coming Chuseok Korean Thanksgiving Day season.  According to Lotte Mart, supply of fresh spinach is reduced to 20 percent of normal volume.  Supply of those products grown in green houses such as leek and lettuce are also down by 35 percent because of the typhoon damage.

 

On-line Sales of Food Products Shows a Rapid Increase due to Soaring Price of Fresh Agricultural Products [Korean, OSY]

http://news.donga.com/Economy/Market/3/0108/

Summary: TV home-shopping companies and Internet retailers are reporting a rapid increase of food product sales.  Sales of food products by GS TV home-shopping rose 30 percent in August compared to the previous month.  In particular, packaged Kimchi made an average of 166 sales per ¡®on air¡¯ minute.    www.Auction.co.kr reported a 22 percent increase in fresh food sales during July and August compared to the same period last year. 

 

Shinsegae E-Mart Opens Meat Processing Center [Korean, OSY]

http://news.donga.com/Economy_List/3/01/20100908/31062010/1

Summary: Shinsegae E-Mart, the leading hypermarket chain in Korea, opened a meat processing center, which will eventually provide cutting, packing, and packaging of all packaged meat products that E-Mart sells.  President B.R. Choi said in a press interview on Sept. 9 that opening of the center will help the chain lower the price of meat products while maintaining high quality.  According to the president, despite the short lead time, 90 percent of the Hanwoo beef gift packages that E-Mart will sell during the Chuseok Korean Thanksgiving Day season will be processed in the center.

 

Kimchi Disappears from Restaurants ¡¦ Due to High Price of Fresh Cabbage [Korean, OSY]

http://news.donga.com/Economy/3/01/20100928/31438551/1

According to Hanaro Mart, a head of fresh Korean cabbage was sold at a record high, 13,800 won, which was about three times higher than regular price around September in the past.  Many restaurants have reportedly dropped Kimchi from the menu due to the high cabbage cost.  Market analysts forecast that high fresh cabbage price is likely to remain until the year end.

 

78 Percent of Koreans Are Internet Users [Korean, OSY]

http://economy.donga.com/Economy_RealTime/3/01/20100930/

Summary: According to the government survey, 78 percent of Koreans were internet users as of July 2010.  The percent of internet usage by age group was: 99.9 percent (10¡¯s and 20¡¯s), 99.3 percent (30¡®s), 87.3 percent (40¡¯s), 55.2 percent (50¡¯s), and 33.8 percent (60¡¯s and older).  Among the internet users, 65.7 percent of people were participating in social networks (SNS).  64.3 percent of the internet users were shopping on internet.

 

Piji Water, #1 Player in Premium Bottled Water Market in the U.S., Launched in Korea [Korean, OSY]

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

Summary: Piji Water, the leading player in the premium bottled water market in the U.S., announced launching in Korea on Sept. 29.  The local importer is Shinsegae Food Co. 

 

7. North Korea Issues

 

Official Estimate Puts N.Korean Military Rice Stores at 1.1 Million Tons [English, CSY]

http://english.chosun.com/site/data/html_dir/2010/09/29/

Summary: South Korean and U.S. intelligence authorities believe that the North Korean military has squirreled away about 1.1 million tons of rice amid a worsening food crisis in the North, a senior South Korean government official said on Tuesday. The figure comes from a joint study by the two countries¡¯ intelligence services in 2008 of North Korea's capacity to mobilize resources in time of war.  The agencies have apparently kept an eye on the North Korean military's rice stores since then.

 

A government source said the two allies have been consistently monitoring the amount of rice stored by the North Korean military each year. "We estimate that a total of 1.1 million tons of rice has accumulated," he added, enough to feed the entire North Korean population for 110 days. According to the official, Seoul believes that North Korea has stored 500,000-550,000 tons of rice at some 300 official storage sites and 600,000-650,000 tons at 270 unidentified stores. Of that, about 500,000 tons are apparently being saved for civilians and the remaining 600,000 tons for soldiers.  The ruling Grand National Party recently brought up the question of North Korea's military rice stores amid calls for food aid to the Stalinist state.

 

8. Other/Miscellaneous Issues

 

Furniture Industry Wants Lower Tariffs on Imported Materials [Korean, OSY]

http://news.donga.com/Economy/3/01/20100902/30936123/1

Summary: The trade deficit in furniture has widened since 2000 as imports increased in a much higher pace than exports.  Imports of furniture has increased 456 percent during the last 10 years to reach $1.1 billion in 2009, while exports has increased 261 percent during the same period to reach $500 million.  Local furniture industry claims that the high import tariffs (as high as 15.67 percent) on materials such as particle board have deteriorated price competiveness of furniture made in Korea because there is no import tariffs on finished furniture products.  On the contrary, the association of Korean particle board manufactures is against the claim of the furniture industry.  The association claims that particle board manufactured in Korea is about 20 percent cheaper than imported products even under no tariff condition.

 

Sales of Imported & Frozen Fruits Surge due to High Price of Local Fruits [Korean, OSY]

http://economy.donga.com/Economy_RealTime/3/01/20100915/

Summary: According to Lotte Mart, sales of imported fruits and frozen fruits in September have increased so far by 13.4 percent and 33 percent respectively compared to the same period last year.

 

Consumer Traffic to Octopus Restaurants Reduced by More than Half due to Safety Concern [Korean, OSY]

http://news.donga.com/Society/3/03/20100917/31258052/1

Summary: Consumer traffic to octopus restaurants has reduced significantly after the Seoul city government announced on Sept. 13 that the intestine and ink of the octopus served in restaurants in Seoul contained as much as 15 times more Cadmium than the safety limit.  The intestine and ink of octopus are contained in the head, and many Koreans eat the whole octopus with a belief that the head part of octopus is good for health.  KFDA quickly released a retorting statement that the test method of the city government was flawed and eating octopus head presents no health risk.  However, the dispute between the local food safety authorities has only expanded confusion and skepticism among the general public.

 

Local Bio-Diesel Industry Faces Tougher Competition due to Deregulation [Korean, OSY]

http://economy.donga.com/Economy_RealTime/3/01/20100928

Government has announced a tax reform that will reduce the scope of tax breaks on bio-diesel from next year.  The reform will allow tax exemption only on bio-diesel made from used cooking oil.  Products made from other sources will be subject to the same level of gas tax as regular diesel (528.7 won per liter).  Diesel currently sold at gas stations in Korea contains about 2 percent of Bio-diesel, a result of mixed effect of government recommendation and low cost, but the industry is worried that the tax reform will reduce the usage of bio-diesel.  Another issue that will increase the competition in the industry is entry of large-scale conglomerates into bio-diesel business.  GS Cal-Tex, a leading petroleum processor in Korea, plans to launch bio-diesel business as early as next year.

 

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