August 27, 2010

Korea's beef imports stay high

Korean beef imports maintained their momentum during July, increasing 21% on-year, to 21,575 tonnes swt, with shipments for the first seven months of 2010 up 21% on 2009 levels, at 146,244 tonnes swt.

The increased demand for imported beef in the Korea market in 2010 has been reflected in higher volumes from both Australia and the US, assisted by a combination of strong consumer demand and low domestic cattle slaughter.

Australian volumes for the past month increased 14% on-year, to 11,648 tonnes swt, taking imports for January to July to 76,649 tonnes swt - 9% ahead of the same period in 2009. Korean imports of US beef increased 53% in July (7,000 tonnes swt) and 56% for the first seven months of 2010, to 44,591 tonnes swt.

While positive economic conditions and strong consumer demand has helped to fuel the rise in beef imports so far in 2010, a significant fall in Korean cattle slaughter and beef production has also assisted the rise in imports. In 2009, domestic Korean beef accounted for almost 50% of total beef consumed in the market (and averaged 48% for the past five years). In 2009, Australia held the majority share of the imported beef market at 58%, followed by the US on 26% and New Zealand with 15%.

Reflecting the reduction in Korea's domestic beef production in 2010 has been a 13% on-year decline in total cattle slaughter between January and June, with Hanwoo female numbers back 16%. Over the same period, the Korean cattle herd has reportedly increased 9%, to 3.3 million head - the highest number since 1998.

Given the reduction in cattle slaughter throughout 2010 and expanding herd, Korean beef production is anticipated to increase in the near-term, which will put pressure on imported beef volumes.