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February 23, 2011

2011.02.23

FAS/Seoul Monitoring of Media Reporting on Agricultural Issues
Today's Date:   Wednesday February 23, 2011
For Coverage:  February 18 - 23, 2011
 
1. ECONOMIC ISSUES
 

Korea Statistics Office Monitors Consumer Prices Using 148 Surveyors [Korean, OSY]

http://economy.donga.com/Economy_RealTime/3/01/20110223/35041341/3&top=1

Summary: Each month, 148 surveyors under the Korea Statistics Office visits 22,000 retail stores in 37 local cities and check the prices of 489 designated products.  Price information gathered is sent to headquarter via PDA on the spot.  After review by headquarter, the price information is put together into the consumer price index.  In the calculation of the index, prices of different cities and product categories are weighted differently to come up with the final index that can better represent the average market price in Korea.  For example, the price of city of Seoul is given 308.4 out of 1,000 weights applied.  Rice gets higher weights than less important products such as instant noodle under product category.

 

2. GRAIN & OILSEED ISSUES

 

Functional rice is getting popular.  (Korean: CSC)

http://www.hankyung.com/news/app/newsview.php?aid=2011022178281

Summary: Despite decreasing per capita consumption of rice, special rice market has been recently increasing.  Korea has developed some rice varieties containing special functions to help children¡¯s growth; restrain the addicted from drinking alcohol etc.  The functional rice is made of adding special materials into rice varieties during cultivation, coating nutritional stuff into normal rice or developing special rice varieties.  The market size of functional rice is reportedly estimated at 6 % of total rice market worth of 8 trillion Korean won.

 

Functional Rice to See Bigger Market [Korean, OSY]

http://www.hankyung.com/news/app/newsview.php?aid=2011022178281&sid=0104&nid=004&ltype=1

Summary: Daesang, a leading food company in Korea, launched a functional rice on Feb. 21.  According to the company, this new variety of rice contains 3.6 times more lysine, an amino acid that plays a crucial role in physical growth for children, than conventional rice.  The company added that despite the on-going decline in rice consumption the demand for functional rice is likely to increase in the coming year.  Korea National Grain Institute forecasts that functional rice would account for up to 10 percent of total rice consumption in Korea in three years.

 
3. LIVESTOCK ISSUES
 

Cleanup work begins at Gyeonggi FMD burial sites [English, CSY]

Waste water being extracted in effort to lessen pollution

http://joongangdaily.joins.com/article/view.asp?aid=2932550

Summary: Amid growing fears that the millions of animals buried due to foot-and-mouth disease (FMD) will contaminate underground water sources, the Gyeonggi Provincial Government yesterday began extracting waste water from burial sites in Namyangju and Yangpyeong.  As of yesterday, roughly 3.3 million animals nationwide have been culled and some 700,000 of them have been buried at 2,017 sites in Gyeonggi, according to the central government. There are about 4,130 burial sites nationwide.

 

Imports of pork and powdered milk to be raised [English, CSY]

http://joongangdaily.joins.com/article/view.asp?aid=2932424

Summary: Korea will ¡°sharply¡± increase the amount of imported pork and powdered milk subject to its tariff quota system in a bid to ease supply shortages prompted by a massive slaughter of livestock amid the spreading foot-and-mouth disease, a senior finance ministry official said yesterday.  It also plans to add 24 more imported items, including cheese and butter products, to the tariff quota list, bringing the total number of goods to be eligible for relatively lower duty rates to 99, Vice Finance Minister Yim Jong-yong said at a meeting with other economy-related officials. The lower import duties will be effective until the end of June.

 

S. Korean imports of U.S. beef almost double in 2010 [English, CSY]

http://english.yonhapnews.co.kr/business/2011/02/22/17/0501000000AEN20110222000900320F.HTML

Summary: South Korea's imports of U.S. beef nearly doubled in 2010 from a year earlier due largely to dwindling concerns over its safety here, the government said Tuesday.   The farm ministry said the country imported 125,681 tons of beef from the U.S. last year, up 97 percent from 63,817 tons tallied in 2009.    The total effectively exceeded amounts imported by Seoul before the U.S. beef import ban went into effect in late 2003 after the first case of mad cow disease was reported in the North American country.    South Korea reopened its market to U.S. beef in 2008, although meat can only be provided from animals under 30 months old to alleviate domestic concerns about mad cow disease that can be fatal to humans.    Because of the mad cow scare, there were widespread national protests after Seoul agreed to fully reopen its market, which caused the government to ask Washington for minor modifications to beef trading conditions.

 

Vaccines could have stopped FMD [English, CSY]

But government was preoccupied with maintaining vaccine-free status

http://joongangdaily.joins.com/article/view.asp?aid=2932488

Summary: To protect less than $2 million worth of meat exports, the government has turned the country into a massive graveyard of farm animals.  Since foot-and-mouth disease broke out in November, more than 3.3 million cows and pigs have been slaughtered, livestock farmers have suffered emotionally and the country is stuck with a bill of trillions of won to compensate farmers for culled animals. Much of this could have been avoided if the government had chosen the more effective and less costly solution of vaccination instead of killing cattle and pigs.  But when vaccinations are used, the country loses its vaccine-free status, which makes its meat exports less desirable.

 
4. MARKETING ISSUES
 

S. Korea's farm imports from U.S. top US$5.3 bln in 2010 [English, CSY]

http://english.yonhapnews.co.kr/business/2011/02/21/0502000000AEN20110221004600320.HTML

Summary: South Korea imported US$5.30 billion worth of farm products from the United States in 2010, making it the sixth largest importer of grain and meat products from America in the world, the government said Monday.  The total marked the second largest annual import figure after the $5.56 billion reported in 2008, the Ministry for Food, Agriculture, Forestry and Fisheries said in a report.
 

Domino Pizza Korea Drops ¡°Within 30 Minute Delivery Policy¡± [Korean, OSY]

http://news.khan.co.kr/kh_news/khan_art_view.html?artid=201102222115185&code=990101

Summary: Domino Pizza Korea announced no Feb. 21 that it would no longer maintain ¡°30 minute delivery¡± policy that it had offered since 1990.  The announcement reflects the negative image drawn on the service by a recent death of an auto-bike pizza deliveryman.  Pizza Hut Korea also made a change in its delivery policy in that it replaced ¡°within 30 minute delivery¡± with ¡°baking within 14 minutes of order¡±.

 

¡°Ashuly Seeks to Become the Leading Restaurant Chain in Korea¡± [Korean, OSY]

http://news.donga.com/Economy/Market/3/0108/20110222/35041418/1

Summary: K.Y. Hong, president of Ashuly, the restaurant business arm under E. Land Retail Group, said in a press interview on Feb. 22 that Ashuly would continue an aggressive expansion through the coming year by adding 50 new outlets within 2011 alone.  Mr. Hong added that the expansion goal for this year should make Ashuly the largest restaurant chain in Korea by the end of 2011.  The current leader in local restaurant business is VIPS under CJ Foodville (W300 billion of sales in 2010).  Ashuly¡¯s annual sales in 2010 was W151 billion.

 

Koreans' Preference for Domestic Food Products [English, CSY]

http://www.arirang.co.kr/News/News_View.asp?nseq=112965&code=Ne2&category=2

Full text: A new survey shows that more than half of Korean consumers prefer domestic food products to imported ones.  The Korea Chamber of Commerce survey of 1,5-hundred people conducted last year found that nearly 54-percent of respondents would buy Korean food products rather than imported ones even when the price of Korean-made food is high.  Around 31-percent said that it would depend on the item, while only 15-percent said that they had no preference.  Despite the chamber's findings, the amount of imported food consumed in Korea has risen sharply in recent years.  The chamber, however, is calling for stronger measures to ease public concerns about the safety of some imported food products.

 
5. OTHER MISCELLANEOUS ISSUES
 

Korea & Japan: 2011 Annual Fish Quota Set at 60,000t [English, CSY]

http://www.arirang.co.kr/News/News_View.asp?nseq=112866&code=Ne2&category=2

Full text: Korea and Japan have agreed to set their annual fishing quotas at 60-thousand tons this year.  The Ministry for Food, Agriculture, Forestry and Fisheries said Monday that the two countries have also agreed to reduce the number of fishing boats from 900 to 870.  The two sides have put a 3-year hold on the policy of keeping GPS-based tracks of the fishing vessels which was supposed to be mandatory from next month and also removed the policy of recording the amount of fish caught at the point of boat inspection.  The ministry says that the new agreements will promote more active fishing operations.

 

Korea Trails Developed Nations in Food Security [English, CSY]

http://english.chosun.com/site/data/html_dir/2011/02/21/2011022101221.html

Summary: Korea scored the lowest in terms of food security among 33 advanced economies in the International Monetary Fund. According to a chart cited in an Op-Ed column in the New York Times on Saturday, Korea had the largest number of respondents who felt food insecurity. The chart also compared income disparity, unemployment rate, level of democracy, wellbeing, life expectancy at birth, prison population and student performance in math and science.  In Korea, 16 percent of respondents said they had been short of money to buy food in the past 12 months, the most along with the U.S. Countries with strong welfare programs such as Singapore, Denmark and Switzerland scored high in terms of food security.

 

'Tripple whammy' hits farmers [English, CSY]

http://www.koreatimes.co.kr/www/news/biz/2011/02/123_81751.html

Summary: Koreans have time-honored beliefs that misfortune never comes alone ¡ª they tend to believe that the worst-case scenario is when three disasters devastate all involved.  That seems to be the case for domestic farmers this winter when three catastrophes happened with the rapid spread of foot-and-mouth disease (FMD), avian influenza, and heavy snowfall creating the perfect storm.   The triple woes are likely to negatively affect the foundations of the farming industry because they have already claimed the lives of so many cows, pigs and hens, consequently reducing output of other agricultural produce.

 

According to the Korea Agro-Fisheries Trade Corp. (aT), the price of pork rocketed by 37.9 percent from a year ago as of the end of last week. That of chicken also jumped 24.5 percent over the same period.  With the appreciation of meat values due to the two rampant diseases, consumers have been prompted to turn to seafood and the increased demand has also caused similar price hikes. For example, the price of mackerel has leapt 42 percent from a year ago.
 

Price of seafood has skyrocketed [English, CSY]

Nearly 50 percent increase noted

http://joongangdaily.joins.com/article/view.asp?aid=2932584

Summary: As the cost of fresh produce continues to climb, the prices of widely consumed seafood such as squid, mackerel, yellow corvina and hairtail have all risen by up to nearly 50 percent, putting a further strain on citizens¡¯ pocketbooks.  Experts point to a domino effect from a shrunken meat supply due to foot-and-mouth disease driving up demand for seafood, plus unusually low temperatures in both the East and South seas, diminishing the amount of fish caught.  According to the Korea Agro-Fisheries Trade Corp. (aT) yesterday, each squid currently costs 2,898 won ($2.57) at the retail level, up 48.7 percent from 1,949 won a year ago.

 

Gov¡¯t sets sights on renewable energy [English, CSY]

http://joongangdaily.joins.com/article/view.asp?aid=2932591

Full text: Korea plans to spend 48 billion won over the next three years to support local renewable energy test projects, the government said yesterday.   The move calls for supporting test programs in solar and wind power generation fields, fuel cell sectors and research and development of parts and materials, the Ministry of Knowledge Economy said.  Of the total to be spent up until 2013, 20 billion won will be used this year, the ministry said.  ¡°Money will be used to test and certify new products made locally so they can be sold commercially, and to create a domestic market for renewable energy resources,¡± it said.

 
 

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