January 26, 2011

 

South Korea cuts pork import tariff

 

 

South Korea has cut its import tariff on pork and seven more products to help meet lost supply from a national outbreak of FMD and to help contain inflation.

 

South Korea would levy no tariff on up to 60,000 tonnes of frozen pork to be imported through June, while meat imports above the volume would be charged 25% of current tariff, the finance ministry said on Tuesday (Jan 25).

 

The new measure would start from later this month.

 

"By lowering tariff and expanding imports, we expect this move will help stabilise local pork prices and lower cost burdens in domestic meat processing products," the ministry added.

 

It added the government would decide if it would extend the tariff policy, considering prices and supply after June.

 

Foot-and-mouth outbreaks in Asia's fourth-largest economy have increased to 137 cases within less than two months, triggering the culling of 25% of the domestic pig population and slaughter of nearly 5% of cattle, data from the agriculture ministry showed.

 

South Korea has culled nearly 2.5 million pigs and more than 140,000 cattle as of Tuesday (Jan 25). The outbreaks have also prompted all the livestock markets across the country to be closed for more than a month, while a small volume of meat has been traded online or by telephone.

 

The massive slaughter and market closures have helped wholesale prices of pork surge by 70% to KRW7,387 (US$6.61) per kilogramme as of Monday (Jan 24) from December's average prices while retail prices of the meat jumped by 22% to KRW9,803 per 500 gram, the agriculture ministry said.

 

The nationwide outbreaks of foot-and-mouth originated in pigs in the city of Andong in North Gyeongsang province on Nov. 28, and rapidly spread to six provinces, leading South Korea to expand vaccination nationwide.

 

The highly contagious disease also appears to have crossed into North Korea, local media said last week.

 

South Korea, a net importer of beef, pork and poultry meat, imported a combined 290,000 tonnes of frozen and chilled pork last year, mostly from the US and Canada. The breakdown of frozen pork imports was not immediately available.

 

South Korea expects a surge in domestic meat demand ahead of the Lunar New Year holidays, the country's biggest holiday when the largest number of people move around for family reunions.

 

In addition to pork, the Korean government will slash import tariff on more products such as frozen fish, powdered milk, through June following anti-inflation measures decided on January 13, the finance ministry said.

 

The government earlier this month unveiled a raft of anti-inflation measures, including cutting import tariff on items such as fish and powdered milk, and freezing government-controlled prices, while the Bank of Korea surprised markets with an interest rate rise.

 

The policy steps came after President Lee Myung-bak called for a "war on prices" in containing inflation as record-high food prices pose a headache for policymakers around the world.