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Pork Higher in South Korea
Monday, August 18, 2014 7:35AM CDT

By Richard Smith
DTN Japan Correspondent

TOKYO (DTN) -- Higher prices for pork in South Korea will not create a gold mine for foreign exporters, whose product is oversupplied in the market.

April retail pork prices averaged 1,929 won ($1.86) per 100 grams, reaching last year's July-August peak season average price between 1,830 to 1,917 won ($1.76 to $1.85), the daily JoongAng Ilbo reported.

The newspaper reported several factors have led to the price increase, including higher temperatures and an avian flu outbreak earlier this year.

As summer heat hit the Korean Peninsula much earlier than in previous years, many people started taking outdoor trips earlier, resulting in higher demand for the staple pork belly, the JoongAng Ilbo reported.

The newspaper reported more people have opted for pork as an alternative to poultry after the avian flu outbreak, driving up prices.

The retail industry has said that a shrinking number of females in the domestic swine herd also reduced meat supplies.

The newspaper reported Korea Institute for Animal Products Quality Evaluation figures show one kilo of pork retailed for 5,583 won ($5.37) in June, a record high for this year, up from 4,457 won ($4.29) recorded in March.

The value of pork shot up 25 percent from April to June, the JoongAng Ilbo reported.

That would be where imported pork would come in, and particularly U.S. pork, tops in South Korea's imported pork market since 2005.

Korea International Trade Association (KITA) figures provided to DTN by MEF South Korea director Ji-Hae Yang show U.S. pork took a 37% market share in January-April.

As consumers feel domestic pork prices are high, market watchers say more imported beef and pork will be sold during the late June to early August meat high demand season, Yang said.

Yang said consumers usually eat chilled pork at home, so U.S. chilled pork will be a substitute for local pork.

The major processed meat companies use both fresh and frozen U.S. pork, Yang said.

"They control the quantity of imported or domestic pork based on price, so it is predicted that more U.S. pork would be used while the domestic pork price is high," she said.

The porcine epidemic diarrhea (PED) outbreak in the U.S. reduced volumes and pushed up export prices, but Yang said that should not be a problem for South Korea's use of U.S. pork.

"Due to the PEDv outbreak, the pork price rise has been expected, so importers already have imported more (U.S. chilled) pork in January-April, 8% higher than the previous year," an import rise from 2,188 to 2,355 metric tons, she said.

U.S. frozen pork for its part went down 2% during the same period, from 41,733 to 41,011, the KITA figures show.

But Yang talked about use of imported pork already in South Korea, and pork importers have taken in much more than what the market really needs, meat importer ARA director Hwan-Kyu Kim told DTN.

ARA imports pork from Europe and the Americas, as well as beef from Australia, New Zealand and the Americas.

Pork importers imported so much product out of fear there would be a shortage during summer and the following seasons because of PED and other supply pressures, that it has become hard even to find meat warehousing space in the country, Kim said.

The KITA statistics do show a 6% year-on-year total increase, from 106,295 to 113,186 tons.

"The soaring domestic pork prices will not lead to visible increase in pork imports," Kim said.

Earlier in the year, meat consumption had been affected by the MV Sewol tragedy, Kim said.

The South Korean ferry capsized April 16 while carrying 476 people, mostly students from a high school. Only 172 survived.

Following the incident, South Koreans felt guilty for partying and even dining and laughing together when they had to watch those teenagers sinking into the sea without being rescued, Kim said.

"That definitely affected meat consumption."


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