June 6, 2005

South Korean poultry industry expects plummet in chicken prices with resumption of imports

Last week, the South Korean Ministry of Agriculture and Fisheries announced it would allow the resumption of US beef and Brazilian chicken imports in June, reports say.

US chicken imports had been banned since February 2004 when avian flu was found on a US farm while Brazilian chicken imports have been suspended due to the country's complicated quarantine procedures.

In response, South Korea's poultry industry raised concerns yesterday that US and Brazilian chickens are expected to flood the market rapidly, as those imported chickens are much cheaper than Korean ones.

For example, the price of an imported Brazilian chicken is reportedly three times cheaper than a Korean one.

Poultry industry analysts are also concerned that cheap chicken imports might pull the selling price down below production cost. This has happened before when Korean poultry prices plummeted below production cost in 2002 and 2003, hit by cheap chicken imports.

According to reports, the price of chicken fell to below 706 won/kg in 2002 and to 560 won/kg in 2003.

To compete with cheap chicken imports, the KPI urged the government to establish a system to mark the origin of the product, while upgrading the quality of local products.