April 24, 2008

South Korean cattle prices plunge on US beef shipments

South Korea's homegrown breed of cattle, the hanwoo, has seen continuous price decreases after last week's agreement to resume the import of US beef.

On Tuesday, the average price of hanwwoo was KRW11,929 (US12) per kilogramme, down 16.3 percent from last month, the Ministry for Food, Agriculture, Forestry and Fisheries said.

Beef prices in South Korea have dipped since the start of April, especially this week, when prices fell by almost KRW190,000 to KRW1.9 million per head in the  Cheongju cattle market in North Chungcheong Province, and by KRW440,000 to KRW1.63 million won in the Ulsan market.

The Korean government projects that the market share of domestic beef will weaken by 5 to 10 percent after the US beef has been granted re-entry.

The ministry said that the local standards of beef are expected to fall while the prime hanwoo beef is still competitive against imports.

Furthermore, the ministry said that the pig farmers will also suffer due to the resumption of US beef imports since pork is usually considered a substitute for beef.

The number of pig-raising households shrank to 7,900 in March, down from 9800 in December, and the number of livestock fell to 8.98 million from 9.61 million in the same period.

The ministry announced Monday that hanwoo breeders will be given subsidies of up to KRW200,000 per head as well as extra compensation in case of a disease breakout.

US$1 = KRW990.90 as of April 24, 2008