July 11, 2007
Korean meat prices fall over US beef prospects
South Korean prices of beef, pork and chicken have dropped on a possibility that US beef may fully enter the Korean market stipulated on the US-Korea free trade agreement.
The Korean National Statistical Office says pork prices both domestic and imported beef fell for the first time in eight years from April to June. Domestic beef prices slipped 2 percent and foreign beef 3.7 percent year-on-year, while pork dropped 6.9 percent.
Domestic beef prices posted their biggest quarterly drop since the second quarter of 2005 when they fell 2.2 percent. For pork, it was the biggest price plunge since the second quarter of 1996 when prices tumbled 9.5 percent. Beef and pork prices last fell at the same time in the first quarter of 1999, ahead of a full beef market opening in 2001 as agreed to at the Uruguay Round of Word Trade Organization talks.
The Korea Agro-Fisheries Trade Corporation surveyed retail prices at large distributors across the country and found that the price of top-grade Korean sirloin (hanwoo) rose from W33,838 (US$1=W938) for 500 grams in June last year to W36,626 late last year. However, prices began to fall this year to as low as W32,029.
Meanwhile the price of medium-grade fresh bacon (samgyeopsal) also dropped from W8,344 per 500 grams in June last year to W7,622 this month, and chicken prices which peaked at W4,061 per 500g in August last year fell to W3,626 due to increased chicken supply in anticipation that consumers will soon shift to US meat once it fully hit the Korean market.
Bilateral talks on US beef import safety standards are due to wrap up this fall on Chuseok, or Korean thanksgiving and is seen to resume US exports of bone-in beef. This, analysts say, will push local meat prices lower.
The Korea Rural Economic Institute predicts that once US beef imports fully resume, the wholesale price of hanwoo will fall from between 6.4 percent to 39.2 percent and that of pork and chicken will also drop between 4.1 percent to 18.5 percent and 1.9 percent to 14.5 percent, respectively.
