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[garykasparov]

http://www.koreaherald.co.kr/site/data/html_dir/2007/07/24/200707240057.asp

Pig out: U.S. FTA could slash pork prices by 1/3

The bilateral free trade agreement between Korea and the United States is forecast to lift the burden on domestic pork prices, and consumers, by as much as one third of the current price, said a report yesterday.

And because of an increase in the supply of meat, the import of American beef, which resumed this April, could result in a 15 percent drop in the price of domestic pork. Further, reducing or removing the tariff imposed on pork and beef imports could cause another 13 percent of drop in the price of pork, said a report released by GS&J, an agricultural research institute run by the former head of the state-run Korea Rural Economic Institute, Lee Jung-hwan.

In the free trade pact, which is yet to be ratified, Korea agreed to lower current tariffs for beef and pork within 15 years and 10 years, respectively. Korea currently levies import tariffs of 40 percent on beef and 25 percent on pork.

The GS&J report expects that a 10 percent price drop in American pork could result in a 7 percent price drop in the domestic pork price - and a 2 percent of drop in the demand for domestic pork.

The report, which analyzed the effects of the FTA, said it expects the price of domestic pork to drop significantly and American pork will gain competitiveness in the Korean meat market - especially in boned rib sales - which accounts for about 60 percent of total meat consumption.

Refrigerated American pork imports, in particular, have been acknowledged for their good quality, taking up over 70 percent of total pork imports last year, even though they are priced 25 percent higher than Canadian pork, the report said.

It said that American pork could replace pork imports of other countries, especially Canadian pork, which currently takes up 20 percent of total imports, when the tariff on American pork is removed upon the ratification of the FTA proposals.

Over half of all Korean pork imports originated from the United States, Chile and Canada last year. American pork imports, in particular, have soared three times in the last six years, accounting up for almost 30 percent of total imports, whereas Danish pork, which took up over half of total imports in 2000, dropped to 6 percent last year.

The report expects the price of American pork to drop an average 2.8 percent per year from year 2008 (assuming the FTA is ratified by then).

The report is bad news for local farmers, who raised 9.46 million pigs as of June, up 5 percent from a year before. Pork takes up over half of the total domestic meat consumption and is the second largest agricultural product in Korea. Pork imports have jumped over threefold in the last five years, increasing by 37 percent per year since 2003.


By Jeong Hyeon-ji


([email protected])

2007.07.24

[crsandus]

Spiderpig! Spiderpig! Does whatever a Spiderpig does!

I never knew how much pork the US exported to Korea. I guess I never read about it since the beef spat always took the front pages. Cheaper sam gyeop sal is always a good thing in my eyes.