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February 21, 2014

2014.03.03

FAS/Seoul Monitoring of Media Reporting on Agricultural Issues

Today's Date:   Friday February 21, 2014
For Coverage:   February 10 ~ 21, 2014 

 

 

1. BILATERAL/MULTILATERAL ISSUES

 

Korea Australia Initial FTA... Official Signing Expected Early 2014 [Korean, BYK]

http://motie.korea.kr/gonews/branch.do?GONEWSSID=GNn7S8yLbQ

SUMMARY: Korea and Australia have initialed FTA in Canberra, Australia on February 10th.  Both sides agreed to work towards officially signing the FTA during the first half of 2014.  The agreement will enter into force as soon as possible after completing their respective domestic procedures.  The English version of agreement will be made public on Feb. 17th.

 

Assistant Minister of Trade Announces that Korea-Canada FTA Has Shown Considerable Progress [Korean, KSY]

http://www.yonhapnews.co.kr/economy/2014/02/12/0301000000AKR20140212169700003.HTML

SUMMARY: Kyung-rim Choi, Assistant Minister of MOTIE announced that Korea-Canada FTA has come close to reach a settlement. The negotiation was ceased after two parties showed disagreement on agricultural issues. The talk reopened last November after 5 years and 8 months and the 15th negotiation concluded last month. Choi also talked about participating in the TPP. He said that the participant countries are generally welcoming Korea¡¯s participation. However, it is difficult to say when exactly Korea will join since it is uncertain when the bilateral talks will finish.

 

Korea-New Zealand FTA Resumes after 4 Years [Korean, KSY]

http://news.khan.co.kr/kh_news/khan_art_view.html?artid=201402121335221&code=920100

SUMMARY: According to MOTIE, the 5th negotiation of Korea-New Zealand FTA will resume from the 17th to the 21st of February in Wellington, New Zealand. The discussion had been suspended for 4 years after two countries disagreed on the time frame for agricultural tariffs to be eliminated. This time, both parties will try to advance the negotiation with a compromised proposal. MOTIE is expecting that restarted talks with New Zealand will boost Korea¡¯s TPP participation.

 

2. ECONOMIC ISSUES

 

Korea Ranks 16th in Food Security, Lower End among G20 Countries [Korean, BYK]

http://www.nongmin.com/article/ar_detail.htm?ar_id=

SUMMARY: The food security level of Korea is 16th among G20 countries, according to KREI¡¯s report.  KREI¡¯s food security index is modified to reflect the characteristics of grain importing countries.  Korea ranked 7th in the safety and nutrition section and 10th in accessibility, but 18th in availability.   Korea¡¯s total score is 32.2 out of 100.

 

3. GRAIN & OILSEED ISSUES

 

Growing apprehension in the market as the price of international rice increases [Korean, KJM]

http://www.nongmin.com/article/ar_detail.htm?ar_id=228515&page=undefined

Summary: The international rice price is fluctuating. Recently, the price of rice from the major exporters has jumped by 17~28% in a day. According to the Korea Rural Economic Institute, California medium-grain variety rice price in the international rice market was $655 on January 23rd, $850 on the next day and on 31st, it reached $930. The experts explain that the decrease of production of California rice by 4.5%, due to the drought on the vegetative period that they had last year, and decrease in exports of rice from Thailand are the reasons for the sudden rise of the price. Therefore, it is foreseen that the international rice market will continue to fluctuate depending on the rice production of U.S.A and the export scale of rice from Thailand.

 

4. LIVESTOCK ISSUES

 

Price of Hanwoo and Pork Rises while Price of Fruits and Vegetables Falls [Korean, BYK]

http://economy.hankooki.com/lpage/industry/201402/e20140216175253120180.htm

SUMMARY: The price of Hanwoo and pork is rising while the price of fruits and vegetables is stabilizing.  According to aT, average price of Hanwoo cow is 13,707 won per kg., while price of pork is 3,578 won per kg., this month.  This is an 11.0% and 19.6% increase respectively, compared to the previous year.  The decrease in number of cows and pigs bred due to a plunge in meat price last year and increase in meat consumption due to radioactive contaminated seafood seem to be the main reason of this upsurge.  On the other hand, the price of fruits and vegetables is on a downturn.  The price of spinach is one third of the price last year (5,711 won per 4 kg. box) and the price of red lettuce fell by half (7,164 won per 4 kg. box).

 

Chicken Sales Increases Thanks to 2014 Sochi Olympic Games despite the AI Crisis [Korean, BYK]

http://www.newsis.com/ar_detail/view.html?ar_id=NISX20140218_0012729785&cID=10408&pID=10400

SUMMARY: According to Lotte Mart, the retailer is enjoying an increased demand of poultry and eggs midst the AI crisis, thanks to the Winter Olympics.  During the period of February 10th to 16th, the sales of raw chicken increased 18.8%, fried chicken 18.4%, duck 10.1%, and eggs 11.4% compared to the previous week.  It is the first time that the poultry consumption recovered within a month since the AI outbreak.

 

52% of the Housewives Say They Keep Aloof from Consuming Poultry due to AI [Korean, BYK]

http://www.nongmin.com/article/ar_detail.htm?ar_id=

SUMMARY: A survey conducted by Gallup Korea revealed that 52% of the housewives are unwilling to consume poultry due to AI.  The survey responded by 1,214 adults showed that 59%  of the respondents are fine with consuming poultry while only 37% answered that they are reluctant to do so.  However, more than half of housewives, who have the most influence in deciding the menu, are avoiding poultry consumption.

 

First Suspected AI Report from Anseong, Gyeonggi...22,000 Ducks Culled [Korean, KSY]

http://www.yonhapnews.co.kr/local/2014/02/12/0811000000AKR20140212041500060.HTML

SUMMARY: A suspected AI case was reported from a duck farm in Anseong, Gyeonggi for the first time in this area. This farm is more than 3km away from the farm in Hwaseong that was diagnosed with HPAI.  The result of brief examination showed positive. Gyeonggi quarantine authorities culled 22,000 ducks as a preventive measure. Another farm in Anseong reported avian infectious bronchitis (IB) on the same day, so the authorities vaccinated poultry in this farm.

 

Poultry Export to Hong Kong Resumed [Korean, KSY]

http://www.nongmin.com/article/ar_detail.htm?ar_id=228514&page=

SUMMARY: Poultry export ceased due to AI from January 17th was partially resumed. Assistant Deputy Minister Lee of MAFRA said that the Hong Kong authorities agreed to import poultry from the regions without outbreaks from February 9th. Export will come to a halt once again, when there are any AI outbreaks in this region. The discussion with Vietnam to reopen poultry import is also underway.

 

3,300 Hanwoo Farms in Jeonnam Closed past 6 Months [Korean, KSY]

http://www.newsis.com/ar_detail/view.html?ar_id=NISX20140211_0012714130&cID=10809&pID=10800

SUMMARY: According to Jeonnam government, 3,352 Hanwoo farms registered closure from last July to September and this January. 41.4 billion won will be provided as closure support for 46,684 cows. Around 10,000 Hanwoo farms in Jeonnam closed in past two years. 17,000 farms applied for damage compensation caused by KORUS FTA. Estimated 4.6 billion won will be reimbursed for 150,000 cows. Hanwoo farmers are complaining that they can barely break even. The feed is too expensive and although the price level of Hanwoo is recovering, it is still lower than what it used to be 3 years ago.

 

Price of Female Calf on the Rise¡¦ Hanwoo Expected Recover its Price Level [Korean, KSY]

http://biz.chosun.com/site/data/html_dir/2014/02/10/2014021002960.html

SUMMARY: Hanwoo is expected to recover its price level as the price of female calf doubled last year. According to MAFRA, Hanwoo calf was traded at the average of 1.71 million won on the 7th, which is almost double the price of 0.86 million won in December 2012. This is a result of last year¡¯s Hanwoo heifer reduction project. MAFRA slaughtered 0.1 million reproductive calves, while Nonghyup slaughtered the same number of old cows that can be bred. The decrease in the total number of cows let Hanwoo recover its price level. The rise of imported beef price also contributed to the rise of female calf price.

 

5. MARKETING ISSUES

 

Nolboo NBG Reduces Sodium Content in Its Flagship Menu by 19 Percent ¡¦ Low Sodium Diet Campaign by Korean Government Gets Consumer Attention [Korean, OSY]

http://news.donga.com/3/all/20140220/61069288/1

Summary: Nolboo NGB, a leading Korean food restaurant franchise business, reported on February 20 that it had reduced sodium content in its flagship soup, ¡®Budaechigae¡¯, by 19 percent.  The company added that it would promote the ¡®Low Sodium Diet¡¯ campaign by the Korean government in its 460 restaurants in Korea.

 

Starbucks Korea to Offer Ice Cream [Korean, OSY]

http://news.donga.com/3/all/20140218/60993344/1

Summary: Starbucks Korea announced that it had started to sell ice cream in five test shops in Seoul on February 18.  Starbucks added that more shops would offer ice cream if the test marketing shows a good outcome.  Other café chains have reportedly also added ice cream in the menu in an effort to attract more consumers.

 

Korean Consumers¡¯ Direct Purchases from Foreign On-line Shops Amounted to $1 Billion in 2013 [Korean, OSY]

http://news.donga.com/3/all/20140218/60957556/1

Summary: Korea Customs Service (KCS) reported that Korean consumers direct purchases from foreign on-line shops totaled $1.04 billion in 2013, up 47 percent from the previous year.  Total number of packages imported under the direct purchases were 11 million, up 40 percent.  The U.S. was the leading origin of the on-line purchases by accounting for 75 percent of the purchases, followed by China (11 percent) and Germany (4 percent).  Clothing was the leading product purchased on-line (19 percent), followed by health functional food (15 percent) and shoes (11 percent).

 

¡®Chu-Eum-Chu-Rum¡¯ (Soju Brand) Lowers Its Alcohol Content to 18 Percent ¡¦ Reflects Consumer Demand for Lower Alcohol Products [Korean, OSY]

http://www.hankyung.com/news/app/newsview.php?aid=2014021629021

Summary: ¡®Chu-Eum-Chu-Rum¡¯, a popular Soju brand in Korea by Lotte Liquor announced that its alcohol content would be lowered from the current 19 percent to 18 percent on February 17.  Lotte added that Chu-Eum-Chu-Rum would be the first soju brand in Korea that offered alcohol content below 19 percent in Seoul metropolitan market.  It was reported that other competitor soju brands would also lower the alcohol content.

 

Genesis ¡®BBQ¡¯ Franchise Enters Indonesian Market ¡¦ Tightened Regulations in Korea Encourages Companies to Seek Growth Opportunity in Foreign Markets [Korean, OSY]

http://www.hankyung.com/news/app/newsview.php?aid=2014021209831

Summary: Genesis Co., the leading quick-service fried chicken restaurant franchise (BBQ brand) in Korea signed a partnership agreement with Goodway Group, Indonesia on February 12.  Genesis-Goodway partnership plans to open 1,000 BBQ outlets in Indonesia by 2020.  Genesis explained that tightened government regulations restricts further expansion of the franchise business in Korea.  As a result, Genesis is seeking growth opportunity in foreign markets.  Genesis currently operates 1,800 outlets in Korea and additional 350 outlets in 57 foreign countries.

 

Sales of Hypermarket Stores Decline in 2013 ¡¦ for the First Time Since Creation of the Industry in 1998 [Korean, OSY]

http://www.hankyung.com/news/app/newsview.php?aid=2014021171171

Summary: All major hypermarket store chains in Korea reported that their sales in 2013 declined from the previous year.  Sales of hypermarket industry has continued a consistent growth since its creation in 1998 so the sales decline in 2013 is taken seriously.  E Mart, the leading chain, reported that its sales in 2013 declined 3.5 percent from the previous year.  Lotte Mart and Home Plus also reported 0.1 percent and 4.8 percent decline respectively.  Mandatory store closing  for twice a month enforced by the Korean government in late 2012 was reportedly a major reason for the weak performance of the industry in 2013. 

 

Dr. Robert Behr, COO of Florida¡¯s Natural Growers Visits Korea [Korean, OSY]

http://news.donga.com/3/all/20140211/60762319/1

Summary: Dr. Robert M. Behr, COO of Florida¡¯s Natural Growers (FNG) visited Korea and had a press interview with Dongah Daily News.  Dr. Behr pointed out that FNG¡¯s 100% fresh-squeeze grapefruit and orange juice products provide tasty and high quality juice that is not added water in the process.
 

 

McDonalds Korea Plans to Open 100 New Outlets This Year ¡¦ Half of Them will be Franchise Outlets  [Korean, OSY]

http://www.hankyung.com/news/app/newsview.php?aid=2014021034721

Summary: McDonalds Korea announced on February 10 that it planned to open 100 new outlets in 2014.  McDonalds Korea pointed out that 50 of the new stores will be franchise outlets run by individual investors.  As a result, total number of franchise outlets under McDonalds Korea will increase to 103 by the end of the year, accounting for 29 percent of all McDonalds outlets in Korea.  According to McDonalds Korea added that it would target to increase the ratio of franchise outlets to 80 percent in the long run.

 

Sales Growth of Chocolates During Valentine¡¯s Day Season Declines [Korean, OSY]

http://www.hankyung.com/news/app/newsview.php?aid=2014021034711

Summary: CU, the leading convenience store chain in Korea reported that sales growth of chocolates during Valentine¡¯s Day Season (February 1 through 15 each year) has continued decline since 2011.  Sales growth of chocolates this year (February 1 through 9) was 4.3 percent, which were much lower than previous years¡¯ (110 percent in 2011, 33.7 percent in 2012, 19..7 percent in 2013).  Marketers point out that increased number of consumers are diversifying their Valentine¡¯s day gift shopping to non-chocolate products such as clothing.

 

¡®Café NesCafe¡¯ is Offered for Acquisition [Korean, OSY]

http://www.hankyung.com/news/app/newsview.php?aid=2014020999491

Summary: It is reported that NesCafe, a café franchise business that operates some 120 outlets in Korea, is offered for acquisition.  NesCafe was brought into Korea by Doosan Group in 2003 under a brand license agreement with Nestle.  The license was acquired by CNH, the current franchiser of NesCafe Korea in 2007.  CNH¡¯s decision to sell off the business is reportedly something to do with stagnant growth of the café industry in Korea.

 

6. NORTH KOREA ISSUES

 

Agricultural Collaboration between North and South Korea Expected to Resume [Korean, BYK]

http://www.nongmin.com/article/ar_detail.htm?ar_id=

SUMMARY: The Ministry of Unification announced that it will collaborate on agriculture and forestry to improve living conditions of North Koreans through ¡°Green Detente Project¡±.  The ministry will start by supporting greenhouse and agricultural materials and expand to joint farming, afforestation, and pest control.  North Korea seems to be looking forward to this project.  Kim Jong-un mentioned that agriculture will be the main target in improving inter-Korean relations during the New Year¡¯s speech. 

The information in this report was compiled by the Agricultural Trade Office (ATO) at the U.S. Embassy in Seoul, South Korea. The press summaries contained herein do NOT reflect USDA, the U.S. Embassy, or other U.S. government agency official policy or view point. U.S. food exporters can learn more about market opportunities in South Korea by reviewing ATO Seoul¡¯s Exporter Guide and other reports available at www.fas.usda.gov by clicking on ¡°attaché reports

 

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Agricultural Trade Office, U.S. Embassy - Seoul
Tel: 82-2-6951-6848 Fax: 82-2-720-7921
Email: atoseoul@state.gov