FAS/Seoul Monitoring of Media Reporting on Agricultural Issues

Today's Date:   Saturday, May 30, 2015

<5/5/2015> Korea, Vietnam sign FTA [English, CSY]

http://www.koreatimes.co.kr/www/news/biz/2015/05/123_178341.html

Korea and Vietnam signed a free trade agreement (FTA) in Hanoi, the trade ministry said Tuesday.  The pact, when ratified by the respective parliaments of the two nations, will make the Southeast Asian country Korea's 15th tariff-free trading partner and boost Seoul's exports of automobiles, electronics and beauty products.  The two nations aim to have the pack go into effect this year.  Rice, red peppers, onions and some other sensitive agricultural products to both sides were not part of the negotiations, it said.

2. ECONOMIC ISSUES

Economy showing signs of slow recovery: gov't [English, CSY]

http://english.yonhapnews.co.kr/business/2015/05/12/34/0501000000AEN20150512001800320F.html

Summary: South Korea's major economic indicators are showing signs of slow improvement, signaling the economy is pulling out of a funk during the fourth quarter of last year, the finance ministry said Tuesday.  The ministry, however, cautioned that Asia's fourth-largest economy remains gripped by such external uncertainties as a weak Japanese currency and a delay in the recovery of major economies.

3. GRAIN & OILSEED ISSUES

<4/27/2015> [Herald Interview] Korea to defend rice market in TPP talks [English, CSY]

http://www.koreaherald.com/view.php?ud=20150427000740

Korea’s top agriculture policymaker has emphasized that the government would not further open its rice market, even when the nation participates in the U.S.-led Trans-Pacific Partnership to establish a free trade zone among Pacific Rim countries.   “Our government is firmly set on excluding rice from the TPP’s list of tariff concession,” said Lee Dong-phil, minister of agriculture, food and rural affairs.

“As regards to joining the TPP, our government’s position is that we will do so after carefully weighing the national interest,” Lee said in a recent interview with The Korea Herald at the Sejong Government Complex.   The minister was responding to concerns in the nation’s farming sector following a high-level U.S. official’s indications early this month that Korea may have to lower its barriers against rice imports in order to join the TPP.   Agricultural experts predict that the U.S. is expected to put pressure on Korea either to lower its 513 percent tariff rate on imported rice or to buy a certain quantity at a far lower tariff.

4. LIVESTOCK ISSUES

S. Koreans' milk consumption rises nearly 45 times in 43 years [English, CSY]

http://english.yonhapnews.co.kr/business/2015/05/12/38/0501000000AEN20150512002600320F.html

Full text: South Korea's per capita milk consumption expanded nearly 45 times in the past 43 years as the country's dietary patterns have changed dramatically amid rapid economic growth and the introduction of Western culture, industry data showed Tuesday.  One South Korean consumed 71.6 kilograms of milk in 2013, compared with 1.6 kg in 1970, according to the data compiled by the National Agricultural Cooperatives Federation.  The intake of rice, the staple food, fell to 62.7 kg per person in 2013, while consumption of meat rose eightfold to 42.7 kg from 5.2 kg over the cited period.

The average lifespan of South Korean people rose to 82 from 59 over the 43-year period as the country became the world's 14th-biggest country by gross domestic product.  "The livestock industry has contributed to South Korea's economic development and its people's sufficient nutrition, longevity and physical buildup," said the federation.  In separate data, the total consumption of raw and powdered milk came in at 3 million tons last year, with inventory of the dairy product reaching a record high of 232,000 tons.

<4/28/2015> Korean chicken franchise hits U.S. sports stadiums [English, CSY]

http://english.donga.com/srv/service.php3?bicode=020000&biid=2015042850538

Summary: Korean chicken will hit U.S. sports stadiums, home to "fried chicken." Leading chicken franchise Genesis BBQ Group said Monday it signed a memorandum of understanding at Grand Intercontinental Hotel in southern Seoul with Levi, a unit of U.S.-based Compass Group, to set up stores and kiosks inside major sports stadiums in the U.S.

Genesis is the first Korean firm entering a country, home to chickens and franchises and particularly the U.S. sports and entertainment restaurants market. U.S. baseball, basketball and football stadiums garner world`s leading athletes with more than 4 million spectators gathering on average a day. "Annual sales from the stores and kiosks at the 92 stadiums are expected to hit 2.4 trillion won (2.2 billion dollars)," Genesis BBQ Chairman Yoon Hong-geun said. "This is equivalent to revenues from 3,000 road shops." Genesis pays Levi 20-30 percent of profit as fees.

5. MARKETING ISSUES

Precooked, Portion-Packed Rice Reports Strong Sales Growth … Due to Increase of Single Member Households and Dual-income Households [Korean, OSY]

http://news.donga.com/3/all/20150324/70286100/1

Summary: According to the industry, sales of precooked, portioned packed rice amounted to 180 billion won in 2014, up 8 percent from the previous year.  Although Korean are eating less rice due to diversified diet, demand for precooked, portioned packed rice are showing continuous growth.  The key driving force is increase of single member households and dual-income households that need convenient and cost saving way to prepare quick meals at home. 

Take-out Meal Market Shows Strong Growth … Industry Sales to Reach 3 Trillion Won Soon [Korean, OSY]

http://news.donga.com/3/all/20150313/70100205/1

Summary: Korean consumers’ busier lifestyle generates strong demand for take-out meals.  In particular, convenience store industry is making heavy efforts to offer higher quality products at value price.  For example, Seven Eleven has organized a chef team recruited from five star hotel kitchens to develop new take-out meal products.  Department stores and hypermarket stores are also expanding take-out meal sections.  Industry analysts forecast that current take-out meal sales in Korea, 2.5 trillion won a year, will soon grow to 3 trillion won.

Korean Consumers’ Mobile Shopping Increases 7.2 Times over the Last Two Years [Korean, OSY]

http://news.donga.com/3/all/20150312/70076783/1

Summary: According to the Korea On-line Shopping Industry Association, Korean consumers’ total spending on mobile shopping amounted to 13.1 trillion won in 2014, which was 7.2 times larger than in 2012.  Accordingly, sales of leading Korean on-line shopping malls via mobile gear (smart phone) orders showed a significant growth.  For example, G Market (www.gmarket.com, the leading on-line shopping mall in Korea) saw its sales from mobile orders increase from 4 percent of its total sales in 2012 to 38 percent in 2014.  Fashion goods (60 percent), children goods (63 percent) and food (49 percent) were the items that Korean consumers purchased via mobile shopping most often.

Youngnam Milk Closes Business .. High Ex-Farm Price of Raw Milk Due to Government Protection Endangers Korean Milk Processors [Korean, OSY]

http://www.hankyung.com/news/app/newsview.php?aid=2015030981031

Summary: Youngnam Milk, one of the oldest fluid milk processors in Korea closed the business in February 2015.  Market analysts point out that Youngnam’s case indicates the serious challenge that the Korean milk processing industry faces today.  Most of the Korean milk processors reportedly has seen a significant amount of loss in recent years because of the rising price of ingredient raw milk as well as stagnant milk consumption growth.  Currently, Korean government maintains high protection measures on behalf of local dairy farms in that ex-farm milk price is structured to increase each year based on increase of farm production cost and general consumer prices.  As a result, raw milk price supplied by local dairy farms has continued an increase over the years regardless of the supply-demand for milk in the market.  According to the Korea Dairy Processors Association, price of raw milk that Korean milk processors pays to the local dairy farms, 1,088 won per liter as of 2015, is over three times higher than in New Zealand (316 won) or over two times higher than in the U.S. (481 won).  On the other hand, consumption of fluid milk (retail packs) in Korea declined 4.7 percent in 2014 to 1.35 metric tons.  Despite the sluggish sales of fluid milk, local dairy farms are expected to increase the production under the government protection in the coming year.  Korea Rural Economic Institute has forecast that local dairy farms would increase the production 2.6 percent in the first quarter 2015 to 560,000 metric tons.  Therefore, much of the over-supply raw milk is likely to further increase the already high inventory of milk powder kept by the milk processors.

Korean Consumers’ Increased Attention to Northern Europe Brings New Products … Lotte Food Launches a Finland Themed Functional Yogurt Beverage [Korean, OSY]

http://www.hankyung.com/news/app/newsview.php?aid=2015030980581

Summary: Lotte Food launched “Benecall” on March 12 under license production agreement with Ricio, a Finland food company.  “Benecall” is a fluid type functional yogurt beverage that can help reduce cholesterol intake, according to Lotte.  It is reported that Korean consumers are developing interest in Northern European countries.  As a result there is increased launchings of new products in Korea that are themed around food ingredients and cuisine of Northern European countries.

6. NORTH KOREA ISSUES

<5/3/2015> Local govt's  gear up to resume aid to N. Korea [English, CSY]

http://english.yonhapnews.co.kr/northkorea/2015/05/03/17/0401000000AEN20150503000900315F.html

South Korea's provincial governments Sunday unveiled plans to resume long-suspended aid to and exchange projects with North Korea under a new inter-Korean reconciliation policy by the Park Geun-hye government.  Last week, the Ministry of Unification announced plans to promote inter-Korean exchanges in such areas as culture, sports and history to help "restore national unity and open channels for cooperation."  North Jeolla Province, which has carried out large-scale projects to support North Korea's agricultural and livestock industries, will also consider ways to resume cross-border projects, officials there said.  South Jeolla Province, located on the southwestern tip of the Korean Peninsula, is focusing on promoting exchanges with North Hamkyong Province at the northern tip.  Following the ministry's announcement, the South Jeolla government has begun to study ways to send seaweed and rice to mothers and underprivileged children in North Hamkyong.