FAS/Seoul Monitoring of Media Reporting on Agricultural Issues

Today's Date:   Friday January 30, 2015

For Coverage:  January 15 ~ 30, 2015

1. BILATERAL/MULTILATERAL ISSUES

New governmental FTA policy; increase market opening to expand emerging countries [Korean, HTJ]

http://www.nongmin.com/article/ar_detail.htm?ar_id=246886&subMenu=articletotal

Summary: Korean government is planning to expand FTA policies to open up opportunities for emerging countries.  MOTIE assistant secretary Gyung-rim, Choi announced that they will start increasing negotiations with emerging countries from this year.  In order to achieve this, they are planning to come up with ODA strategies to enhance favorable relationships with those countries. Also they are planning to collect opinions from companies about FTA as well as undergo negotiations with existing FTA countries.

2. BIOTECHNOLOGY ISSUES

GMO food contents labeling became mandatory [Korean, HTJ]

http://www.yonhapnews.co.kr/bulletin/2015/01/24/0200000000AKR20150124028800017.HTML?input=1195m

SUMMARY: According to the MFDS, food producers should indicate GMO content facts regardless of quantity or rank for the contents.  Originally, producers did not have to label whether GMO is contained or not in their products as long as GMO is not included in top five contained materials, thus consumers are not aware of it.  The MFDS also announced that only the important information (precautions, shelf life, 5 main ingredients, whether or not containing of allergic raw materials and storage method) will be indicated on the products while extra information can be found using Quick Response (QR) code.

3. GRAIN & OILSEED ISSUES

Korean rice in international markets [Korean, HTJ]
http://heraldk.com/2015/01/28/%ED%95%9C%EA%B5%AD%EC%8C%80-%EC%88%98%EC%B6%9

As

Korean rice market is fully liberalized this year, Korean government revised relevant regulations to allow domestic rice to be exported without any restriction.  The revised regulations will come into effect March this year.  This means that high ending stocks caused by bump crop in 2014 shall be balanced by rice exports.  However, Korean rice is relatively high price in the world market, leading negative prospects for export.  Korean retail marketers in Southern California said that Korean rice has never been competitive in American market.  They have failed selling even small amount of Korean rice so far.  One food company confessed that export quantity of Korean rice will be very limited because Korean rice was sold in the event of Korean festival in LA amid Korean local government providing supports.

Domestic rice consumption per capita recorded the lowest [Korean, HTJ]
http://www.ytn.co.kr/_ln/0102_201501280003279609

SUMMARY: According to Statistics Korea, each  Korean consumed an average 65.1kg of rice in 2014, which decreased by 3.1% compared to that of 2013.  This quantity is almost half (47.4%) of that for 1970, then the highest recorded.  However, other grain consumptions including coarse grains, soybeans, sweet potatoes and potatoes have increased for the most recent 2 years and reached 8.7kg per capita, up 7.4% from 2013.  Among them, coarse grains and beans have grown rapidly, increasing by 25% and 19% respectively.  However, total grain consumption per capita were 73.8kg, down 2% from 2013.   

Regulations on rice export will be abolished [Korean, HTJ]

http://www.yonhapnews.co.kr/economy/2015/01/26/0301000000AKR20150126145600030.HTML

SUMMARY: Rice export restriction will be completely lifted from March this year in Korea.  MAFRA is under legislation procedure to abolish the export regulation as rice market opening have already started from this year.  Also, they are planning to abolish regulation related to export prices. With these procedures, MAFRA expects to increase rice exports, stabilizing rice supply and demand with rice industry being competitive.

Direct payment for rice cultivation farm to expand [Korean, HTJ]
http://www.ccdailynews.com/news/articleView.html?idxno=745326
SUMMARY: Governmental direct payment system for rice cultivation will be increased up to 1,000,000 Korean won per hectare this year. With this increase on the direct payment system, a total of 43.4 billion Korean won will used to help the rice cultivating farms.  Also, the direct payment for upland crops is planned to be increased from this year.

4. LIVESTOCK ISSUES

Consumers are worried as FMD spreads [Korean, HTJ]
http://news.naver.com/main/read.nhn?mode=LSD&mid=shm&sid1=101&oid=022&aid=0002775955

SUMMARY: Consumers are still worried about the spreading of FMD.  According to Trend Monitor, a market research institute, 68% of consumers responded that they are worried about the spreading of FMD.  This result is lower than that of the survey taken after the 2010 FMD outbreak, where 81.3% of the consumers were worried.  14.8% of consumers think imported beef is safer than domestic beef during FMD outbreak, which is expected to lead to a slight increase in imported beef demand.  The preference for domestic meat over imported meat is still over 50% for almost all meats.  Australian beef was selected as a price competitive beef (52%), which is higher than Hanwoo (20.9%) and beef produced from Holstein cattle (12.7%).

Meat consumption stays stable during FMD spread [Korean, HTJ]
http://www.nongmin.com/article/ar_detail.htm?ar_id=247097&subMenu=articletotal

SUMMARY: It does not look like the spreading of FMD is affecting the consumption of livestock products in Korea.  According to the livestock products distribution industry, price of Hanwoo have increased slightly this month, compared to last year before the FMD broke out.  Prices of pork have slightly decreased, which experts say is due to a seasonal effect.  Price of poultry also increased slightly.  Livestock distribution researcher Gyu-sung, Jung said that this is because consumers now don’t have typical anxiety over FMD and also due to a drop in sensational news reports.

Half of Koreans have interest in American beef [Korean, HTJ]

http://www.fnnews.com/news/201501271530197643

SUMMARY: According to USMEF and Gallop Korea’s survey on consumer’s perception on U.S. beef yesterday, Korean consumers who responded American beef is safe was 44.7% which  increased by 6.7%, compared to that of 2012.  Those who respond that it is not safe was 42.9%, which is decreased by 7% and it is the lowest ratio since 2012.  Also, over the half of consumers (50.2%) responded that they are willing to eat American beef and 50.9% of consumers responded that they are willing to eat American high quality brand beef.  Meanwhile, beef consumption in Korea has increased in both restaurants and home compared to June 2013.  Taste was a main factor for selecting beef followed by its safety, price and country of origin.

Meat exports have decreased because of FMD and HPAI [Korean, HTJ]

http://www.yonhapnews.co.kr/bulletin/2015/01/19/0200000000AKR20150119025300030.HTML?input=1195m

SUMMARY: According to the MAFRA and aT, export quantities of fresh duck meat have decreased drastically by 88.7% last year.  Also, quantities of fresh and processed chicken have decreased by 26.6%.  Pork was slightly increased by 0.23% thanks to the increased processed pork export (74.6%).  However, as HPAI and FMD are sporadically occurring now, meat exports are still expected to suffer hardships in Korea.

Lamb and horsemeat products are becoming popular in Korea [Korean, HTJ]

http://imnews.imbc.com/replay/2015/nw1800/article/3622860_14761.html

SUMMARY: Lamb and horsemeat’s demand is now increasing in Korea.  During January to November 2014, import quantity of lamb is almost $40 million, which is a 63% increase compared to 2013.  This rate is even higher than other meats including pork (33%), beef (21%), and chicken (9%) during the same period.  This is because Korean consumers have the perception that lamb is a healthy food, containing lower fats. Additionally, Koreans tend to consume specific parts of pork more, including pork belly, making its price high.  With this reason, other parts of pork, lamb and horsemeat demand is now increasing.  According to Statistics Korea in 2013, Koreans consumed 46kg of meat a year including pork (21kg), chicken (12kg), and beef (10kg).

Import price of beef rose 24.8% [Korean, HTJ]
http://www.yonhapnews.co.kr/bulletin/2015/01/23/0200000000AKR20150123092000002.HTML?input=1195m

SUMMARY: According to the Korean Customs Service (KCS), the import price index was 117.8 in December 2014, which increased 9.6% compared to that of 2013.  Also it has increased 2.1%, compared to that of November 2014.  Among those increases, livestock products increased 21.7%, followed by 6%, and 2.7% of agricultural and fishery products, respectively.  Specifically, beef and pork increased by 24.8%, 26.4% respectively, whereas chicken was decreased by 4.9%.  Almost all product prices were increased except for grains among agricultural products.  All the fishery product prices were increased as well.

FMD does not affect livestock product sales [Korean, HTJ]

http://www.yonhapnews.co.kr/bulletin/2015/01/24/0200000000AKR20150124002400030.HTML?input=1195m

SUMMARY: HPAI and FMD did not affect livestock sales directly in Korea.  According to the E-mart, one of the biggest discount chain stores in Korea, the sales of beef and pork have increased for 9.9% and 1.5% respectively.  Poultry sales were also increased for 13.5%, compared to the same period of last month.  One employee from the E-mart said that the HPAI and the FMD did not affect the sales because they already prepared stocks for sale and consumers were not influenced thanks to the government’s fast measurement.

Increasing imported beef, crisis for Hanwoo industry [Korean, HTJ]
http://www.nongmin.com/article/ar_detail.htm?ar_id=246914&subMenu=articletotaL

SumMARY: The volume of imported beef is now steeply increasing in Korea.  According to MFDS, the volume of imported beef was 280,521 tons last year, which is an increase of 9.1% compared to that of 2013.  Australia showed the biggest growth with 150,893 tons (53.7% of total import), followed by U.S. (104,952MT), New Zealand (20,960MT), Canada (2,739MT).  Chile, Uruguay and Mexico have also exported beef to Korea for about 117MT ~ 441MT.  One beef market association official said that this is because consumers want cheaper imported beef due to economic recession.  National Hanwoo Association official said that government should set up comprehensive measures to increase competitiveness of the Hanwoo industry.

FMD can occur on vaccinated swine if immune system is not perfect enough [Korean, HTJ]

http://www.yonhapnews.co.kr/society/2015/01/22/0706000000AKR20150122093900030.HTML

SuMMARY: QIA director Yi-seok, Joo announced in yesterday’s briefing that FMD can occur in vaccinated swine if the immune system is less than perfect.  He also said that even though swine with 100% antibody have recently been infected with FMD, effectiveness of the vaccine itself has been proved.  MAFRA is planning to develop Korean-oriented FMD vaccine after completion of a vaccine research center this August.  They also plan to send virus samples to the Fulbright research center to verify the effectiveness of the vaccine and expect to receive the result next month.

FMD occurred on 100% antibody formed swine [Korean, HTJ]

http://news.donga.com/3/all/20150122/69215495/1

SUMMARY: According to MAFRA, 100% antibody_treated swine have been infected with the FMD virus yesterday. Some experts argued that the vaccine was not that effective and some others argued that this might have occurred because Korean FMD virus type and foreign introduced vaccine type are different. About this argument, the MAFRA announced that it is unreasonable to argue the vaccination was not effective since there was high rates of antibody formation.

Australian poultry imports to resume [Korean, HTJ]

http://news.sbs.co.kr/news/endPage.do?news_id=N1002795790&plink=ORI&cooper=NAVER

Summary: The MAFRA confirmed that Australian poultry is AI virus free and no additional HPAI have occurred recently.  The Australian government previously announced that they are AI virus free since February 2014.  The MAFRA is planning to resume import on those products if there is no additional objection after collecting opinions about this issue.

Continuing U.S. HPAI affects the Korean poultry industry. [Korean, HTJ]

http://www.nongmin.com/article/ar_detail.htm?ar_id=246819&subMenu=articletotal

Summary: Korean broiler industry is worried as U.S. HPAI keep continues. This is because U.S is a main exporter of grandparental chick stocks (GPS). Poultry experts forecast that as the HPAI and GPS import limitation continues, domestic broiler stocks will be deficient by the first quarter of 2016. Experts recommend that broiler farms should maintain proper breeding numbers to prevent the contraction of the broiler industry.

Canadian beef sales out paces U.S. beef sales in Korean market [Korean, HTJ]
http://realfoods.heraldcorp.com/realfoods/view.php?ud=20150119000120&sec=01-75-04&jeh=0&pos

SUMMARY: Lotte-Mart, one of the biggest marts in Korea announced that Canadian beef sales have out paced sales of U.S. beef, taking 9.5% of total market share. U.S. beef sales was directly affected by Canadian beef which was introduced to the Korea market during the 2^nd half of 2014, loosing over 6% of total market share. Also, according to Korean customs, the import volume of Canadian beef has increased over 2.5 times than that of 2013.

HPAI movement stop order will not affect poultry sales [Korean, HTJ]

http://www.yonhapnews.co.kr/bulletin/2015/01/16/0200000000AKR20150116148600030.HTML?input=1195m

SUMMARY: Korean distribution industry expected that HPAI movement stop order will not affect poultry sales. According to distribution industry, this is because raw chicken product is not included in this order. Also, they expect that consumers are not affected by this order because distribution companies have already prepared stocks to sell while this order is in place e.

MAFRA is worried about oversupply of Hanwoo after 2018 [Korean, HTJ]

http://www.yonhapnews.co.kr/bulletin/2015/01/16/0200000000AKR20150116153400030.HTML?input=1195m

SUMMARY: According to MAFRA, the demand for Hanwoo semen has increased 7.4%, compared to last year.  Due to increased demand of Hanwoo, the calf number is also expected to increase after this April. MAFRA said that they are worried about oversupply of Hanwoo after 2018 and also said that voluntary supply and demand control is needed to relax this situation.

Governmental field investigation on Japanese fishery has finished [Korean, HTJ]

http://www.newsis.com/ar_detail/view.html?ar_id=NISX20150117_0013420689&cID=10101&pID=10100

SUMMARY: Kyoto News announced that Korean governmental investigator group has finished field investigation on Japanese fishery. This is the second visit to Japan for them after last December’s visit for investigation purpose. Followed by this, related government agencies including MOF are expected to have profound discussion to make a decision on lifting the ban placed on Japanese fish imports.

Tension rises in the distribution industry due to FMD spread [Korean, HTJ]
http://www.newsis.com/ar_detail/view.html?ar_id=NISX20150115_0013417046&cID=10401&pID=10400

SUMMARY: MAFRA ordered a ban on the movement of FMD related workers and vehicles.  Due to this order, the distribution industry is worried that pork and beef prices will rise as well as cause a setback in the distribution of meat products before the Lunar New year’s day.  One of the major supermarkets in Korea said that the price is stable now but next week will be the important period in determining whether the price will increase or not.

5. MARKETING ISSUES

Koreans Eat Less Rice [Korean, OSY]

http://news.donga.com/3/all/20150128/69319703/1

Summary: According to the government data, each Korean consumed 65.1 kg of rice in 2014, down 3.1 percent from the previous year.  The government report pointed out that Korean's rice consumption was likely to continue to decline in the coming years due to the trend of diversified food consumption as well as consumer's health concern for getting too much carbohydrate from eating rice.

KRA to Increase Races that Allow Open Competition Between Imported Horses and Local Horses ... Race Horse Owners are Against the Plan [Korean, OSY]

http://news.donga.com/3/all/20150126/69275065/1

Summary:  Korea Racing Authority (KRA) has planned to increase the number of thoroughbred races that run both imported horses and local horses to raise the level of quality of thoroughbred races in Korea.  According to KRA, the new policy will increase the percentage of races that allow open competition between imported horses and local horses from current 12 percent to 16 percent of total KRA races.  KRA has also planned to increase the import price ceiling on imported horse from current $30,000 to $50,000 per head.  The new policy is scheduled to take effect in February 2015.  KRA explained that the new policy is needed to attract more consumers to KRA races.  According to KRA, low race quality has been the key reason for sluggish growth of consumer traffic to KRA races.  As an indicator, KRA's annual income from race ticket sales has increased only 0.7 percent since 2002.  However, race horse owner's association has opposed to the new initiative, claiming that the new policy will destroy the foundation of local horse breeders considering the big quality gap between imported horses and local horses.  KRA replied that the new policy will still allow limited competition between imported horses and local horses because KRA will also introduce measures to support local horses in the race.  For example, total number of imported horses registered in KRA races will be limited not to exceed 25 percent of total horses registered in KRA races.  Imported horses will also be handicapped for local horses' equal winning opportunity in KRA races.

Australian Wine Seeks to Recover in Korea with Free Trade Agreement Deal [Korean, OSY]

http://news.donga.com/3/all/20150121/69214635/1

Summary: Korea-Australia Free Trade Agreement (FTA), implemented on December 12, 2014 has eliminated 15 percent import tariff on Australian wine imported into Korea immediately upon implementation.  As a result, leading Korean retail store chains have lowered the retail price of Australian wine by 8 to 16 percent.  In addition, many retail stores have launched special sales promotions on Australian wine to attract consumer traffic.  Marketers in general believe that Australian wine will be able to recover some market share in Korea this year due to the FTA.

'Paris Baguette' Bakery Store Chain to Offer Premium Coffee ... Cafe Industry Faces New Competition [Korean, OSY]

http://news.donga.com/3/all/20150119/69172160/1

Summary: Paris Baguette, the leading bakery store chain in Korea announced that its 3,000 stores in Korea will start to offer premium quality coffee on January 21.  According to Paris Baguette, the coffee beans are directly sourced from top quality farms around the world.  The company added that the price of the coffee will be about 30 percent cheaper than major cafe chains such as Starbucks.  Because of the strong presence of Paris Baguette stores throughout the market, existing cafe chains are showing concerns for the launching of premium coffee by Paris Baguette.  

Korea's Beer Imports Reach $100 Million for the First Time in 2014 [Korean, OSY]

http://www.hankyung.com/news/app/newsview.php?aid=2015011933001

Summary: According to the Korea Customs Office, Korea's imports of beer totaled $116 million in 2014, up 24.5 percent from the previous year.  In terms of volume, imports totaled 119,467 metric tons, up 25.5 percent.  Japan was the leading exporter of beer to Korea (31,914 metric tons), followed by Netherland (17,821 metric tons), Germany (16,688 metric tons), and China (11,490 metric tons).

6. OTHER MISCELLANEOUS ISSUES

Over half of food materials are imported [Korean, HTJ]

http://www.yonhapnews.co.kr/bulletin/2015/01/27/0200000000AKR20150127066700030.HTML?input=1195m

SUMMARY: Domestic food materials are now below 33% of total food materials.  According to MAFRA and aT’s report on food materials consumption, quantities of domestic food materials was 31.2% of total.  Domestic food materials usages have increased in potatoes, garlics, and beef, while soybeans and red pepper powders have decreased.  Food processors said they are using domestic materials because of consumer’s preference (33.3%), while they are using imported food materials because they are cheap (63.9%).

Increased attentions on lobsters [Korean, HTJ]
http://kr.wsj.com/posts/2015/01/26/%ed%95%9c%ea%b5%ad%ec%9d%b8%eb%93%a

SUMMARY: Koreans used to be able to enjoy lobsters only at a fancy restaurant at a high price.  However, lobsters are now easily seen even in sandwiches these days, as its prices are decreasing in Korea.  One agricultural analyst explained that this is because lobster’s demands in U.S have fallen down, making suppliers to lower its price.  Thanks to KORUS FTA’s lowered tariff, U.S lobster’s import quantities are beating those from Canada now.  Originally, lobsters from Canada were over 67% of total lobster imports in 2002.  Now lobsters from U.S. are over 57% of total import which is more than Canadian’s.  Total import quantities of lobsters have increased by 375% since its first import started in 2009, totaling $74 million in 2014.  According to KREI, Korea is one of the top seafood consuming countries in the world, consuming 54.9kg per person in 2012.

69% of Koreans have intention to pay more for healthy foods [Korean, HTJ]
http://www.hani.co.kr/arti/economy/economy_general/674774.html?_fr=mt5r

SUMMARY: Nielsen Korea, a survey institute, announced yesterday that 69% of Koreans have the intention to pay more for healthier foods, only if the foods are from trustful producer.  88% of survey respondents were agreeable with higher price of organic foods and natural foods.  They are also planning to purchase more healthy foods including vegetables (30%), fruits (28%) and nuts (23%).  However, 54% of respondents answered they will not give up taste of food for healthier dietary life, which is a higher percentage than world average (38%).

Opposition on Japanese fishery import [Korean, HTJ]
http://www.newsis.com/pict_detail/view.html?pict_id=NISI20150121_0010546750

SUMMARY: Civil associations including the citizen radiation monitoring center asserted yesterday that they are opposing to the government’s announcement on Japanese fishery import. They claimed that the government should not resume the Japanese fishery imports as well as the government should ban all the food imports from Japan.

Korean government plans to reopen Japanese fishery imports [Korean, HTJ]
http://news.tvchosun.com/site/data/html_dir/2015/01/16/2015011690035.html
SUMMARY: The Ministry of Oceans and Fisheries (MOF) announced that they are planning to reopen Japanese fishery imports. The Korean government has been regulating the entire fishery imports from Japan for about 16 months after the radiation spill occurred in Fukushima, Japan.  MOF spokesperson said that they are planning to make a decision on this issue after the MFDS investigation and profound discussion between related government agencies.

Australian cherries entering Korean market [Korean, HTJ]

http://www.nongmin.com/article/ar_detail.htm?ar_id=246591&subMenu=articletotal

SUMMARY: Australian cherries are entering the Korean market at relatively cheap price with 0% duty under the Korea-Australia FTA.  The Import price of those cherries are expected to be around 47 US dollars per 5Kg box compared to 64.5 US dollars during the same period of last year.  This is a new concerned issue for the Korean government because they had expected that the KOR-AUS FTA will only affect prices of dairy products, pork and table grape.

FTA effect on grape price [Korean, HTJ]

http://www.nongmin.com/article/ar_detail.htm?ar_id=246604&subMenu=articletotal
SUMMARY: As the Korean government gradually opens up the domestic table grape market with FTAs, it is now making grape’s price fluctuate. According to the KREI report on effect after FTAs, the retail price for imported table grape even went up, compared to the price before the FTAs.  A KREI researcher said that a more profound investigation on FTA damage is needed as well as the development of substitute species..