1. BILATERAL/MULTILATERAL ISSUES

 

Hanwoo FTA Subsidy Remains in 13,545 won per Head, Incurs Domestic Farmhouses’ Anger [Korean LSH]

http://news.khan.co.kr/kh_news/khan_art_view.html?artid=201309212120345&code=920501

FTA subsidy policy was introduced in 2004 in order to compensate for the loss of farmhouse income when the livestock market opens by FTA.  This year, the government decided to set the price on 13,545 won per head but Hanwoo farmhouses are strongly arguing that the price is too low.  The Ministry of Agriculture, Food and Rural Affairs (MAFRA) announced that it was due to increase in domestic Hanwoo supply and low import contribution level of FTA.  However, the producers rebuts that when the KORUS FTA was implemented, there was no mention on import contribution level whatsoever.  Whether this was a proper step for the government or will become another obstacle to the domestic farmhouses is still under discussion.    

 

2. BIOTECHNOLOGY ISSUES

 

Ministry of Food and Drug Safety (MFDS) Refuses to Disclose Information on GMO Imports [LSH, Korean]

http://www.economysegye.com/articles/view.html?aid=20130902023570&cid=7113010000000&OutUrl=daum

Citizen Coalition for Economic Justice (CCEG) customer center requested MFDS to reveal information on GMO import to the public.  However, MFDS declined the request by saying that the information is highly sensitive and is considered trade secrets of each company. T o this attitude, CCEG points out that information on GMO does not have ‘independent economic value’ of each company which makes it legal to disclose information and that it is directly related to public food security and health.

 

3. GRAIN & OILSEED ISSUES

 

Government Purchases Additional 50,000 tons Public Rice Inventory for Next Year [LSH, Korean]

http://www.nongmin.com/article/ar_detail.htm?ar_id=222182&subMenu=articletotal

The Government decided to enlarge stockpiles of government-purchased rice next year to 420,000 tons in order to stabilize food security and market fluctuation.  In fact, rice stock as well as self-sufficiency had been decreasing last 3 consecutive years due to degradation of rice production infrastructure and international market instability. Came into effect in last July, Asean Plus Three Emergency Rice Reserve (APTERR) protocol on rice stock insists that government must hold additional 50,000 tons of rice to provide as foreign aid to any emergencies in developing countries. Thus when the domestic rice stock seems to dwindle, the government can control this stock for domestic use.  

 

MAFRA Includes Wheat and Soy in Public Granary Reserve Range [English, LSH]

http://mbn.mk.co.kr/pages/news/newsView.php?category=mbn00003&news_seq_no=1479533

Ministry of Agriculture, Food and Rural Affairs (MAFRA) reported its plan to extend storage of public buffer stock to include wheat and soy besides rice. Originally, MAFRA had only been reserving rice in order to cope with instability of supply and demand from any possible natural disasters. However, as portion of domestic wheat and soy consumption became considerable, they found it necessary to extend the range of storage. Furthermore, MAFRA also decided to mark down the interest rate of bust up fees created from breach of contract between government and suppliers. This measure will lighten the burden on domestic farmers.

 

Rice Manufacturer in Troublesome Situation as the Government Cuts Down Public Rice Supply [Korean LSH]

http://news1.kr/articles/1328133

The government’s public rice stock is close to getting used up.  Since 2008, the government has been opening offering rice stock to rice manufacturers for low price in order to deal with overflowing rice stock.  Because it was provided in desirable price; domestic manufacturers have been depending largely on the government rice by taking in 20~25 tons out of 42 tons of public stock volume.  However, the allocated supply is absolutely in shortage this year and it is expected that the provision will completely stop by next year. This will put rice manufactures in difficult situation as they have to endure burden of cost and raise the market price. The manufacturers say that they must pursue gentrification strategy to meet the consumer taste and if not, the products will lose price competitiveness.

 

4. LIVESTOCK ISSUES

 

Reduction Plan of sow results in Pork Market Stagnation [LSH, Korean]

http://www.nongmin.com/article/ar_detail.htm?ar_id=222215&subMenu=articletotal

In pig raising industry, reduction plan of sow to 100,000 led by the production companies, Korean Han-don Association and Nonghyup encountered unexpected failure. The original reduction plan of sows was promoted in order to balance out supply and stabilize pork price in the market.  Although more than a 100,000 heads were reduced, the result shows that the pork market is still suffering from unsettling pork price. This is because some farms have been curtailing the number of sows not by a recommended way but by restraining the number of sow candidates. The government insists that if there are no reduction efforts operated by each and every farm then they would not provide any subsidies nor financial support.

 

First Hanwoo export, the Pride of Korean Meat [Korean, LSH]

http://news.naver.com/main/read.nhn?mode=LSD&mid=sec&sid1=101&oid=001&aid=0006483236
Pride of Korean beef, Hanwoo will be exported to Hong Kong for the first time. National Agricultural Cooperative Federation (NACF) reported that when the exporters of Huengsung Hanwoo visited China region to promote Hanwoo export, the locals showed positive reaction. As Korea is close to gaining the status of foot-and-mouth-disease-free zone, exporters look forward to increased popularity and demand for Hanwoo. Not only that, Hanwoo has competitive price compared to that of Wagyu from Japan. Hanwoo indeed has advantage over other imported beef in terms of taste, popularity and price. Korean exporters proudly believe that Hanwoo’s superiority will be proved by this exporting plan and that this plan will be successful in spreading Hanwoo over China region.

 

[Editorial] Where does Hanwoo Stand in Open Market? [English, LSH]

http://www.hankyung.com/news/app/newsview.php?aid=2013091575731

It is reported that Hanwoo market is still as prosperous as usual in spite of worries that occurred during the establishment of KORUS FTA.  The competitiveness of Hanwoo in the beef market in terms of quality and taste is highly recognized by the consumers, still ensuring 50% of market share.  Of course, trade in agricultural sector is still vulnerable to price fluctuation and policy changes but it is a hasty generalization to say that domestic agriculture will be endangered by the market opening.  In fact, some of the industries became more thriving when the market became liberalized.  This conception will apply the same for upcoming FTA discussion with China.   

 

Hanwoo Price Expected to Recover even after Chuseok [Korean, LSH]

http://www.nongmin.com/article/ar_detail.htm?ar_id=222735&subMenu=articletotal

Summary: It is expected that price of Hanwoo will recover from slump shortly. According to Korea Institute for Animal Products Quality Evaluation, Hanwoo price in the wholesale market was knocked down to price slightly over an average year. Originally, livestock industries foresaw that oversupply of Hanwoo and economic stagnation will drag the price down until next year. However, their estimation was overturned by increased consumer demand on Hanwoo due to preference over marine products. This consumer behavior will prevent Hanwoo price from falling even after special procurements for Chuseok is over.

 

Livestock Farms Suffer from Increasing Debt [Korean LSH]

http://www.kookje.co.kr/news2011/asp/newsbody.asp?code=0200&key=20130923.22016203839

It is estimated that the livestock farmhouse debt have amounted to one hundred million won again in 4 years. The debt was caused mainly by the rise in production cost combined with dropped livestock price in the market which led to exacerbation of livestock management.  Experts worry that this tendency might decrease the number of livestock farms population which then results in weakening of the whole livestock infrastructure. 

 

5. MARKETING ISSUES

 

Korean Brewers Focus on Lunching Ale Beer … to Fight Back Strong Rise of Imported Beer [Korean, OSY]

http://news.donga.com/3/all/20130923/57784464/1

Summary: Hite Jinro, the leading brewery in Korea launched ‘Queen’s Ale’ earlier in September.  The other leading brewery OB has also announced that it would launch ale beer within this year.  Korean brewers sudden attention to ale beer is a tactic to cope with the rapid increase of imported beer which reflects a significant shift of the taste of Korean beer drinkers.  It is reported that Korean consumers’ taste is being diversified and they are looking for more choices.  As a result, imports of beef has shown double digit growth since 2010.  Currently, ale beer accounts for less than one percent of total beer sales in Korea but the shift of consumer taste is likely to boost the consumption of ale beer in the coming year.

 

Korean Retail Stores to Slow Down Their Expansion into Foreign Countries [Korean, OSY]

http://www.hankyung.com/news/app/newsview.php?aid=2013091575591

Summary: Lotte Mart is reportedly reducing the new stores it plans to open this year.  For example, Lotte’s new store opening in China is likely to be reduced down to 5 or 6 this year, a sharp drop from 20 planned earlier this year.  E Mart, another Korean retail chain has postponed its first store opening in Vietnam recently due to delayed approval from the local government.  Analysts point out that Korean retail chains are not likely to see profit from their investments in foreign countries anytime soon.  Sluggish business outcome is pressuring the Korean retailers against making further investment.