May 7, 2007

 

FTA threatens South Korean beef farmers

 

 

Though South Korea and the United States have yet to confirm a bilateral free trade agreement (FTA),  South Korean beef producers appear to be hurt by the agreement as wholesale prices of South Korean beef or hanu has declined as producers dump beef on the market over fears of influx of American and Canadian beef.

 

Data by the Korean National Agricultural Cooperative Federation (NACF) show the average wholesale price of a female hanu calf dropped 27 percent, to 2,101,000 won, as of May 2, compared 2,878,000 won in January. The price of a 600-kilogram female hanu fell 13 percent to 4,767,000 won from 5.48 million won. The price of a male hanu calf also declined 13.3 percent to 2,012,000 won from 2,321,000 won.

 

The drop in wholesale prices has been an indication of fears by livestock farmers on South Korea-US FTA. Typically, it takes two to three years for a calf to grow to a 600-kilogram hanu, thus, price decline is affecting female calves, male calves, cow and bulls, in that order.

 

In fact, the mass-selling of hanu is becoming a nationwide phenomenon. Farmers like Sim Seong-gu, 54, at Hongseong in South Chungcheong province, said farmers have been struggling to sell cattle as bulls generally are castrated after two years but prices are falling further as it is now being sold without castration. Min Jae-gi, head of the Hongseong Hanu Association, said some has already slaughtered cows in pregnancy as farmers aren't willing to raise its prices for fear that it might not be sold.

 

Notwithstanding the concerns, imports have surged during the first four months of 2007 and are seen to continue for the rest of the year. South Korea's biggest beef exporter, Australia, has its shipments jumped to 29 percent, to 46,024 tonnes. Plans are also afoot to import bone-in Canadian beef as South Korean Minister of Foreign Affairs and Trade, Song Min-soon, told Canada Foreign Minister Peter MacKay that South Korea will resume imports of Canadian in an expected declaration of the World Organization for Animal Health on a "low-risk"

mad cow disease contamination.

 

NACF said the South Korea's full opening of American and Canadian beef imports may pose "irreversible damage to domestic livestock farmers".

 

NACF official Kim said some wholesale markets cannot even set a price range amid widespread concerns of US beef influx.

 

But Park Hong-sik, an official at the Ministry of Agriculture, said fears have just flared over the FTA dealing on US beef resumption as there are no disturbances in supply and demand with the small amount of US beef shipments come in.

 

Park said the ministry is working to appease farmers' concerns.

 

Meanwhile, unlike the plunge in wholesale hanu prices, retail prices of hanu beef are slightly changed. According to the Korea Agro-Fisheries Trade Corp, prices of the first-grade hanu rib and Australian rib fell 3.7 percent and 5 percent each, compared with January.

 

US$1 = 928.75 Korean won