July 27, 2011

Cheaper European pork is making its way into the South Korea market, as retailers are taking advantage of the government's temporary reduction in pork tariffs to alleviate the country's chronic shortage of pork belly.

And with the South Korea-EU free trade agreement having gone into effect earlier this month, South Korean retailers have an added incentive to buy European pork.

Discount store chain E-mart will start selling frozen Belgian pork belly for the first time starting next week for between KRW850 (81 cents) and KRW890 won (85 cents) per 100 grams (0.22 pounds). The company said it has secured 20 tonnes of Belgian pork belly.

South Korea experienced a pork shortage after an outbreak of foot-and-mouth disease in the winter prompted authorities to slaughter more than three million pigs and cows, which caused the price of domestic pork belly to spike.

Market watchers project that an increase in imported European pork will bring prices down as well as decrease demand for domestic pork. Still, domestic pork belly dominates in terms of market share.

From January to June, only 17.6% of pork belly sold at E-Mart was imported, with the rest domestic. "But we noted that the market share of imported pork belly saw an 880% increase, or a nearly nine-fold increase, from the same period last year," the E-mart official said.

Lotte Mart currently sells pork belly from the Netherlands, Belgium and the US, and plans to import pork belly from Germany.

Market watchers say that consumption of imported pork belly is bound to rise, with the government's temporary 25% tariff reduction on frozen pork belly and 22.5% tariff reduction on refrigerated pork belly - measures that will remain in effect until the end of the year.

Also, pork belly from the EU is likely to eat up a greater portion of the local market share in the coming years as the tariff is reduced by 2.5% annually starting next year over the next decade, following the FTA.

But pork belly imports are already going up. The Korea Meat Trade Association says 75,709 tonnes of pork belly was imported in the first half of the year, a 32.5% rise from the same period last year.