Today's Date:  Monday, June 11, 2012

1. ECONOMIC ISSUES

World Food Price Index has been lowest in 20 months since September 2010 according to FAO.

(Korean, CSC)

http://www.hankyung.com/news/app/newsview.php?aid=2012061054471&nid=002&sid=01012014

Summary: World Food Price Index has declined to 204 in May 2012, down 4.4 percent from April 2012, down 13 percent from May 2011 as well due mainly to a sharp decrease of sugar and dairy products prices.  Sugar price has declined by higher production of major exporters such as India, EU, Thailand and Brazil.  Dairy production major exporters have increased made the price index bearish.   

2. MARKETING ISSUES

Worst Drought in 10 Years … 76% of Farm Land may Give Up Harvests if the Condition Continues [Korean, OSY]

http://news.donga.com/Society/3/03/20120611/46904105/1

Summary:  Farms throughout Korea are reportedly experiencing limited water supply due to a worst drought condition in 10 years.  The drought is expected to get worse in the coming weeks as ‘Jangma’ (a rainy season in early Summer, which is typical in Korea) is forecast to start in late June this year.  As a result, local farms are facing the risk of loosing crops, including onions, potatoes, sweet potatoes, and rice.  According to an analysis by Korea Weather Bureau, 76 percent of farm land in Korea are experiencing ‘severe drought’.  Ministry of Agriculture has been providing financial support to local provinces to help farmers find alternative water sources.

Retail Price of Imported European Whiskeys is 5 Times Higher than the Import Price [Korean, OSY]

http://news.donga.com/Economy/Market/3/0108/20120610/46900467/1

Summary: Green Consumer Coalition, a NGO group, reported on June 10 that its price survey had revealed that imported EU whiskeys are sold at five times higher price than the import price inclusive of local taxes.  The NGO group criticized that the importer and the distributor is taking 410 percent of mark up on the whiskeys.  The NGO group added that the high mark up is only possible because the whiskey market in Korea is under a monopoly distribution system by multinational whiskey suppliers.  By the way, the import price of EU whiskeys has increased 1.41 percent during the first quarter this year despite the fact that the Korea-EU Free Trade Agreement go rid of the 20 percent import duty on the products since July 1, 2011.