August 23, 2007

US threatens Australian beef in South Korean market

Australian beef imports to South Korea is likely to drop in the coming months if the ban on US if entirely lifted, according to Peta McDougall, an analyst at marketing concern Meat and Livestock Australia Ltd. 

The return of US beef to South Korea will reduce demand for Australian product in its third biggest export market in the short term, she said.

US Department of Agriculture Secretary Mike Johanns said he expects a reply from Seoul this week on whether it will lift the ban imposed on US beef three weeks ago after a box with bone-in beef was mistakenly included in a shipment to South Korea.

The US said the mistake was due to a "packing error" that resulted in the box being mislabelled as boneless.

South Korea imported 18,511 tonnes of beef in July, of which Australia accounted for 11,448 tonnes, down 15% on year. In July, Australia accounted for 62 percent of South Korea's imports, down from 73 percent in June, while the US share in July rose to 18 percent - equal to imports from New Zealand, according to official data relayed by MLA.

Australian exports to South Korea will fall to 100,000 tonnes of boneless beef next calendar year from an estimated 130,000 tonnes this year, if US exports resume in September, both down from an actual 149,660 tonnes valued at A$832 million in 2006, MacDougall said.

South Korea banned all US beef in December 2003 after the first case of mad cow disease was found in the US. 

Australia is the world's second biggest beef exporter after Brazil.