October 12, 2012

Rising Korean pork supplies pressure prices

Despite Foot-and-Mouth Disease (FMD) outbreaks and pig culling in South Korea during 2010, the country's pig herd has expanded quickly to 9.4 million in 2012.

However, Korean consumption of domestic pork has reportedly been unable to keep up with the increased supply, putting downwards pressure upon prices.

Average wholesale prices for pork at the end of September 2012 stood at KRW2,802 (US$2.52) per kilogramme.

Late last month, the wholesale price for pork actually fell below the price for chicken – a rare event in the Korean market. In the first nine months this year, average pork prices were at KRW4,482 (US$4.03) per kilogramme. Pork belly prices in Korean retailers fell below KRW1,500 (US$1.35) per 100 gram for the first time in five years.

According to the Korea Rural Economic Institute, pork production will continue to rise until the first quarter next year, with on-going low pork prices increasing competition for Australian red meat. The Korean government, however, recently stated this it would buy up to 36,000 pigs during the next three months to prevent the price from falling further.