Agricultural, forestry, fishery output up 1.2% [English, CSY]
Full text: Output of Korea’s agricultural, forestry and fisheries sector rose to a new high of 43.52 trillion won ($40.66 billion) last year on a jump in forestry production, the government said yesterday. The total output grew 1.2 percent from a year earlier when the country produced 42.99 trillion worth of agriculture and forestry products, according to the Ministry for Food, Agriculture, Forestry and Fisheries. Agriculture production, including that by the livestock industry, rose 0.8 percent on-year to 41.67 trillion won while production by the forestry industry jumped 13.2 percent to 1.85 trillion. Production of food grains, such as rice, dropped 18.9 percent from 2009 to 7.99 trillion won, apparently reflecting a change in the national diet. Output by the livestock industry, on the other hand, rose 6 percent on-year to 17.47 trillion won. “The increase was partly caused by a rise of meat prices, but it still shows our people’s diet is changing,” the ministry said. Production of vegetables rose 10.6 percent to 8.35 trillion won with output of fruits rising 2.1 percent to 3.58 trillion won.
2. LIVESTOCK ISSUES
Farmers, milk producers finally strike deal [English, CSY]
Consumers will pay more for dairy products
Summary: Dairy farmers and milk producers reached a long-delayed agreement yesterday on a hike in the price of raw milk, a move feared to make milk products more expensive and add to inflationary pressure. The agreement, immediately effective from yesterday, calls for raising the average price of raw milk from the current 704 won ($0.66) per liter to 842 won. The compromise was reached after several rounds of negotiations between the Korea Dairy and Beef Farmers Association and milk companies that began June 21. The dairy farmers’ association had demanded an increase of 173 won per liter, claiming the current price did not even cover their costs. The current price of raw milk was set in 2008 and has remained unchanged since. Milk companies, however, offered to raise the price by only 81 won, although they later offered a 130 won increase.
Livestock Market Suffering ahead of Chuseok Holiday [English, CSY]
Summary: Cattle farmers in Korea's northeastern Gangwon Province are still having a hard time due to the outbreak of foot-and-mouth disease this past winter. However, the situation in areas that were not affected by the viral disease that affects cloven-hoofed animals is even worse. Since government compensation is concentrated on disease-hit areas, the farms that were unaffected are having an even more difficult time to cope with soaring feed prices and the fall in cattle prices. The cost to purchase a cow has dropped 20 percent compared to last year, while animal feed prices have almost doubled.
[Interview : Cho Mun-jin, Livestock farmer] "The price for cows dropped by about 40 percent. Before, there were many cows that cost around 10 million won, but now they are being sold for less than six million." Even though pork prices are soaring, pig farms are also struggling to make ends meet. Foot-and-mouth disease resulted in killing most of the pigs in the country, and only a small number is left to sell during the weeks leading up to Chuseok on September 12th, one of the country's biggest holidays.
3. MARKETING ISSUES
Summary: Leading hypermarket store chains are in trouble as many of their new stores that are currently under construction will be affected by the strengthened zoning regulation that prohibits opening of large-scale retail stores within 1 kilometers from a designated traditional market. The zoning regulation, strengthened from 500 meter radius to 1 kilometer radius due to a revision earlier this year, is scheduled to go into effect from September 1, 2011. According to top three leading hypermarket store chains, a total of 41 new stores currently under construction by the companies are located within 1 kilometer radius from designated traditional markets. Retailers argue that those new stores that were already under construction when the revision was made should not be subject to the strengthened regulation.
Summary: According to the Korea Customs Office, the number of Korean travelers who hand-carried European goods exceeding the $400 duty-free ceiling into Korea was 1,056 in July, up 34 percent from the same month last year. Watches (up 153 percent) and handbags (up 58 percent) showed the highest increase. The 8 percent import duty on both European watches and handbags have been eliminated since July 1. On the other hand, hand-carrying of European wine did not show a significant increase. According to the Customs Office, any European good under $1,000 value hand-carried by the traveler benefits the same import duty elimination/reduction under the FTA. However, products exceeding the existing $400 duty free ceiling is subject to local taxes, such as value added tax or liquor tax.
4. OTHER MISCELLANEOUS ISSUES
S. Korea's fisheries output inches down in H1: report [English, CSY]http://english.yonhapnews.co.kr/business/2011/08/16/0501000000AEN20110816002100320.HTML
Summary: South Korea's fisheries output edged down during the first half from a year earlier due mainly to sluggish deep-sea fishing output, a government report showed Tuesday. Fisheries production amounted to 1.626 million tons during the January-June period, down 0.3 percent from 1.630 million tons caught in the same period a year earlier, according to the report by Statistics Korea.
Full text: The government plans to expand the supply of 15 agricultural and fish products likely to be in high demand for Korea's thanksgiving holiday, Chuseok, which falls on September 12th this year. At a meeting hosted by the agriculture ministry Tuesday, authorities agreed to almost double the supply of products including napa cabbage, apples, and eggs two weeks before the holiday. And the ministry said some 25-hundred farmers' markets will be set up where people can buy local produce 10 to 30 percent cheaper.
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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