Today's Date:     Friday, January 27, 2012

1. BILATERAL/MULTILATERAL ISSUES

ROKG begins to gather comments on FTA with China [Korean: BYK]

http://news.kbs.co.kr/economic/2012/01/26/2425075.html

Summary: The Korean government has begun a series of comment gathering in preparation of initiating the FTA discussions with China.  MOFAT stated that it will hold a number of hearings and seminars from January to February and gather comments from various sectors about the proposed FTA talks with China.

<1/25/2012>Trade with FTA partners nearly doubled in 2011[English, CSY]

http://english.donga.com/srv/service.php3?bicode=020000&biid=2012012533478

Summary: Trade with free trade partners last year has almost doubled in two years, the Korea Customs Service said Tuesday.   Korea’s trade volume with its seven free trade partners represented 27.4 percent of the country`s trade volume of 1.08 trillion U.S. dollars last year, far higher than the rise of 14.6 percent in 2009.  Korean exports to the seven partners increased by 18.4 percent to 166.8 billion dollars and imports grew 20.6 percent to 129.4 billion dollars in two years. The free trade partners accounted for 30 percent of Korea’s overall exports of 556.5 billion dollars and comprised 24.7 percent of the country`s imports or 524.4 billion dollars. The increase was largely due to free trade deals with the European Union and Peru, which came into effect in July and August last year, respectively.

<1/25/2012>Korea's FTA Negotiator Says Govt. Will Take Careful Approach on Korea-China FTA[English, CSY]

http://www.arirang.co.kr/News/News_View.asp?nseq=125196&code=Ne2&category=2

Full text: The Korean government plans to take a cautious approach, in starting a free trade agreement negotiation with China.  This is according to Korean Deputy Minister for FTA negotations, Choi Seok-young , who also told reporters that, the government WILL hear various opinions on a Korea-China FTA, by attending private and public seminars regarding this topic  His statement comes amid concerns that, such a deal WILL have a negative impact, on a number of Korean industries, including the agricultural sector.  As for Korea's trade pact with the United States, Choi is scheduled to visit Los Angeles this weekend, to meet with Assistant US Trade Representative, Wendy Cutler.

2. LIVESTOCK ISSUES

42% distribution profit per Hoengseong Hanwoo, the Korean cattle [Korean, LSH]

http://www.hankyung.com/news/app/newsview.php?aid=2012011928651&intype=1

Summary: Lotte department store and Home-Plus supermarket ranked the highest consumer prices for Hanwoo. Although Food and Mouth Disease (FMD) incidents had lowered the whole sale market price down by 22.7%, the consumer price decreased only by 6%. Consumers Union of Korea insists the reason for this comes from distributors. The profit for distribution of Hanwoo recorded 2009, 37.5%; 2010, 40.9%; 2011, 42.3%. However, a distributor from department store claims the Consumers Union of Korea (CUK) purposely distorted the number.  The number from the CUK excluded the maintenance fee for the store, labor fee, and shipping cost.

Editorial:  Beef Trade Puzzle [English: BYK]

http://www.koreaherald.com/national/Detail.jsp?newsMLId=20120125000352

Summary: Many consumers wonder why beef prices in department stores and other retail outlets remain high even as cattle prices have plummeted at livestock farms. The Consumers Union of Korea has come up with an answer.  According to a report released by the union, a top-notch 600 kg Korean cow fetches its owner about 5.8 million won on average. But the cow’s final consumer price is slightly over 10.04 million won, generating a distribution margin of 42.3 percent.  The report has found out how the large margin is distributed. According to it, the lion’s share goes to retailers ― department stores, large discount store chains, super supermarkets and other big outlets keep over 90 percent of the distribution margin, while wholesalers take less than 10 percent.

137 retailers caught for violating the COOL regulations [Korean: BYK]

http://news.naver.com/main/read.nhn?mode=LSD&mid=sec&sid1=101&oid=001&aid=0005480834

Summary: The National Agriculture Quality Management Service, under MIFAFF carried out an inspection prior to the Lunar New year holidays and caught 137 retailers that had violated the COOL requirement in selling beef products.

Farmers and government officers get caught for illegally receiving compensation for FMD [Korean: BYK]

http://news.chosun.com/site/data/html_dir/2012/01/26/2012012600021.html

Summary: Farmers and government officials were caught for falsifying the total number of swine that had been culled due to FMD and receiving compensation for animals that had not been culled.  They exaggerated the total number of swine that had been culled and received an additional compensation of 1.6 billion won.

<1/25/2012>[Editorial] Beef trade puzzle[English, CSY]

http://www.koreaherald.com/national/Detail.jsp?newsMLId=20120125000352

Summary: Many consumers wonder why beef prices in department stores and other retail outlets remain high even as cattle prices have plummeted at livestock farms. The Consumers Union of Korea has come up with an answer.  According to a report released by the union, a top-notch 600 kg Korean cow fetches its owner about 5.8 million won on average. But the cow’s final consumer price is slightly over 10.04 million won, generating a distribution margin of 42.3 percent.  The report has found out how the large margin is distributed. According to it, the lion’s share goes to retailers ― department stores, large discount store chains, super supermarkets and other big outlets keep over 90 percent of the distribution margin, while wholesalers take less than 10 percent.

KFAC Feed Lowers Livestock Feed Price 3 Percent [Korean, OSY]

http://www.yonhapnews.co.kr/economy/2012/01/26/0318000000AKR20120126083500002.HTML

KFAC Feed company, operated by the Korean Federation of Agricultural Cooperatives, announced on January 26 that it had reduced the price of its livestock feed products by 3 percent on average.  KFAC Feed said this price cut would reduce the feed cost  of local livestock farmers by 40 billion won this year.

3. MARKETING ISSUES

Price increase in imported liquor products [Korean, LSH]

http://www.hankyung.com/news/app/newsview.php?aid=2012011928861&sid=011629&nid=000<ype=1

Summary: Although Korean liquor industries are not available of increasing the price, due to the consumer price stability, Chinese beer “Qingtao” and French cognac “Camus” will increase the price up to 20%. Imported liquor products are priced after reporting unit price to the Office of Customs Administration. In spite of high expectation from customers due to the FTA, Imported liquor industry is going against it by increasing the consumer prices.

Increase in coffee consumption in Korean coffee market [Korean, LSH]

http://news.donga.com/Economy/New/3/01/20120125/43526411/1

Summary: KB Economic Institute has reported the number of specialty coffee shops in 2011, has increased by 54% compared to last year. Comparing to the year of 2006, the year when a term called “Soybean Paste Girl” has become a major buzzword, indicating a woman who eats soybean paste stew for meal (inexpensive regular meal), but drinks franchised coffee that cost more than the meal, the number of specialty coffee shops has increased by 890% and the sales value increased by 1,600% during the last five years, from 2006. Although instant coffee mix takes 64.2% of coffee market while fresh coffee beans market takes only 7.8%. The record shows, the fresh coffee bean market grows annually 19.2% during 2006 through 2011 while instant coffee mix market grows only 6.1% annually during the same period of years.

Korea is ‘Coffee Republic’ … 10,000 Cafés and 2 Trillion Won of Sales [Korean, OSY]

http://news.donga.com/Economy/New/3/01/20120125/43526411/1

Summary: According to a report by KB Economic Institute, total number of coffee shops in Korea amounted to 12,381 at the end of 2011, up 54 percent from a year before.  Total cash register sales of the coffee shops was estimated at 2.5 trillion won, up 60 percent.  According to Dongsuh, the leading supplier of packaged coffee products, instant coffee mixes still accounted for 64.2 percent (by volume) of all coffee sold in Korea in 2011.  Coffee sold in espresso coffee shops accounted for 7.8 percent of the total coffee market sales by volume.  However, sales of espresso coffee marked an average of 19.2 percent growth during 2006 and 2011, which was much higher than instant coffee mixes’ growth rate, 6.1 percent during the period.

Fair Trade Committee Approves Lotte’s Takeover of a Local Supermarket Chain with a Condition [Korean, OSY]

http://www.yonhapnews.co.kr/economy/2012/01/20/0318000000AKR20120120088700002.HTML

Summary: Fair Trade Committee announced on January 24 that it had approved Lotte Shopping to take over CS Retail, a regional grocery supermarket chain that operated a total of 176 stores under ‘Good Morning Mart’ and ‘Harmony Mart’ brands.  However, the committee ruled that Lotte Shopping must sell a Good Morning Mart store in Daejun to a third party to protect small independent retailers in the area.

4. OTHER MISCELLANEOUS ISSUES

S. Korea's makgeolli exports surge on strong demand in Japan[English, CSY]

http://english.yonhapnews.co.kr/business/2012/01/26/47/0502000000AEN20120126001900320F.HTML

Summary: South Korea's exports of makgeolli jumped in 2011 mostly thanks to spiking demand for the nation's traditional rice wine from Japan, customs data showed Thursday.     According to the data by the Korea Customs Service, makgeolli exports totaled US$52.76 million last year, up 176.3 percent from a year earlier.   That marked a 12-fold rise from the $4.42 million tallied at the end of 2008 and was the first time makgeolli exports exceeded $50 million.  The increase stemmed mostly from Japan where demand for makgeolli has been spiking. South Korea sold $48.42 million worth of makgeolli or 92 percent of its total exports to Japan last year, a 210.7 percent rise from a year earlier, the data showed.

5. MIFAFF PRESS RELEASES

► MIFAFF catches 654 violators of the COOL requirement

► QIA develops new type of lactobacillus that inhibits pathogenic virus

► MIFAFF to move full speed in developing ultra-modern agricultural site in Saemahngeum land reclamation area

► MIFAFF hopes to be able to provide more domestically caught fish by enlarging the Korea Fisheries Resources Agency

► MIFAFF holds meeting to discuss measures for coping with illegal fishing by Chinese fishermen and prevention of accidents on sea

► MIFAFF to air spray migratory bird sites in order to prevent the spread of avian influenza

► MIFAFF seeks to provide not only fresh but safe fishery products

► MIFAFF to strengthen food safety control in agricultural products being exported so that these products meet the import requirements of the importing nation

► MIFAFF Minister attends the 2012 Madrid Fusion