Today's Date:  Wednesdy, June 27, 2012

1. BILATERAL/MULTILATERAL ISSUES

Proving “Countries of Origin” is hard job for Korean small companies [Korean, HYD]

http://news.hankooki.com/lpage/economy/201206/h2012062121101221500.htm

Summary:  Small and medium sized Korean export companies are having difficulties in proving “Countries of Origins” to export their products into USA. They are unhappy because they cannot make more money even though KORUS FTA era has come. Much more than that, if discovered something other countries’ ingredients mixed in their products, after they got Certified Countries of Origins of the products, they have to pay back all the money what they earned from discounted tariff under the KORUS FTA.

2. GRAIN & OILSEED ISSUES

Shortage in supply of crops if drought continues until next week [Korean, SLK]

http://www.hankyung.com/news/app/newsview.php?aid=2012062578461&intype=1

Full Text: The damage caused by drought is serious, especially on spring onion, sweet onion and potato. If there is no sign of rainfall during next week, the possibility of shortage in supply of crops may occur.

 A researcher at the Korea Rural Economic Institute (KREI) presented a report on ‘Trend and prospect on changes in supply of agricultural products caused by recent drought’. According to the report, precipitation rate in Cheongnam and JunBook province has been only 9 and 20 percent of the previous year, damaging the vegetables growing on bare ground.

 Therefore, the production of spring onion is predicted to decrease by 30 percent in July and August. Spring onion is mainly harvested in bare ground which may have been more damaged by the drought. The production of medium and late harvest variety onion will drop by 26 percent, maintaining its high price until next month.

 The problem for cabbage is the high temperature. Shipment of most spring cabbages were done last month but cabbages grown on bare ground is in bad condition due to high temperature in Ho-Nam and Chung-Book province.

 Director of agriculture center in KREI, ByeolRul Kim said “Lack of shipment combined with anxiety started to affect the price of cabbage.” With supermarkets securing larger quantity of cabbage since regaining their authority to be in business on holidays and increasing demand from houses to make kimchi before monsoon  have caused imbalance between supply and demand.

 Potato, facing drought at the period when they should be enlarging its size in May and June, will show 18 percent decrease in production compared to the previous year. Yet, increased cultivation land of potato will be able to solve the problem of shortage in supply. The cultivating land of ginger has increased more than 18 percent from the last year, offsetting the damage in the production as well.

 Director Kim said “The toughest crisis in supply chain in crops will be in early next week. If the drought continues, crops on farm will dry out, lowering its quality.” Fortunately, rice planting has been done almost 98.5% already and areas lacking in water is only 0.4%, which will cause no problem in the supply of rice.

3. MARKETING ISSUES

Quota tariff extended on 44 items such as pork belly and sugar [Korean, KSH]

http://beauty.hankooki.com/news/articleView.html?idxno=1442

Summary: Quota tariff will be extended on 44 items such as pork belly and sugar. 5 more items including the orange concentrate and petroleum product will be newly added on the list.

Ministry of Strategy and Finance also announced the regulation proposal regarding the second half quota tariff.

Quota tariff allows a low tariff rate to be applied, within the limits of 40% point of the original rate temporarily. This system is set in order to stabilize the price level and to balance the supply and demand.

The tariff policy was announced 26th and will be applied starting from 1^st of next month.

In addition, quota tariff on pork belly will be kept until the end of the year since its supply is never enough and the demand is expected to rise in the upcoming summer vacation season.

Quota tariff on dried chiles will also be kept for it is not produced enough because of climate change.

In case of quota tariff on sugar, which was controversial, will be extended and applied until next June.

4. OTHER MISCELLANEOUS ISSUES

Domestic sugar manufacturers against the ROK’s action to extend zero duty period on the imported table sugar [Korean, KJH]

http://joongang.joinsmsn.com/article/172/8582172.html?ctg=

Summary: Among the 44 products decided by the Ministry of Strategy and Finance (MOSF) to continue to be subject to lower tariffs until the end of this year, the two items of table sugar and raw sugar will be subject to zero duty until June, next year. The Ministry said that although int’l sugar prices tumbled, domestic prices have not gone down, and this measure is aimed at driving down local prices of sugar through its competing with imported table sugar in price. However the domestic sugar manufacturers involved, refuted this action saying it’s the gov’s favoring the imported sugar to stabilize prices of the country.