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Audio: Strong Demand for U.S. Pork in Korea, but Market Fiercely Competitive

Published: Jun 03, 2015
00:00 / 00:00

You may download the audio file here




South Korea has been one of the top-performing markets for U.S. pork exports in 2015, with first-quarter exports up 43 percent in volume (57,376 metric tons) and 55 percent in value ($180.4 million) from the same period last year. U.S. Meat Export Federation (USMEF) Korea Director Jihae Yang explains some of the factors driving this strong performance.

Korea’s domestic pork production has been impacted by porcine epidemic diarrhea virus (PEDV), as well as a voluntary sow herd reduction plan that was implemented by the Korean government following a period of large production in 2012 and 2013. This has contributed to a year-over-year increase in domestic carcass prices of about 16 percent, creating a favorable market for imported pork.

Yang cautions, however, that the imported pork market in Korea is intensely competitive. Suppliers from the European Union – especially Germany and Spain – have been particularly aggressive in Korea and other Asian markets since the closure of the Russian market to EU pork. This occurred in early 2014, due to a dispute related to African swine fever. Last year Korea’s imports of pork from Germany doubled to 66,123 metric tons, and imports from Spain increased 85 percent to 44,551 metric tons. Through April, this year’s imports from Germany and Spain are up another 70 percent and 36 percent, respectively.

TRANSCRIPT:

Joe Schuele: South Korea has been one of the top performing markets for U.S. pork in 2015, with first quarter exports up 43 percent in volume and 55 percent in value from the strong pace reported last year. In this U.S. Meat Export Federation report, USMEF-Korea Director Jihae Yang discusses some of the factors driving this performance.

Jihae Yang: While the per capita consumption of pork has been increasing continuously, the domestic production cannot fill up the growing demand. Korea has had PEDV impact last year and this year and after going through the oversupply issue in 2013 and 2012, Korean producers have voluntary reduction programs of sow numbers, so that resulted in about 1.7 down in pork production this year. And because of the less production, current carcass price is about $2.25, so 16 percent increase from the same period last year. So that high carcass price will continue this summer and encourage the importer to buy more pork.

Joe Schuele: But these favorable market conditions are not lost on our competitors, as Yang explains there has been a large influx of European pork entering Korea since the Russian market closed to EU pork in early 2014.

Jihae Yang: The Russia ban is the reason why Korea and other Asian countries are receiving more EU pork. The Germany export has been doubled from 2013, and the same thing happened to the Spanish. They are very aggressive in the Korea market. To meet the growing demand of Korean importers, they even changed the carcass break method, and they changed the packaging and they changed the specifications. So Korea is a highly competitive market – 18 countries are competing in the Korean market.

Joe Schuele: For more on this and other trade issues, please visit USMEF.org. For the U.S. Meat Export Federation, I’m Joe Schuele. [audio mp3="https://www.usmef.org/downloads/Jihae-Yang-on-strong-pork-exports-to-Korea-6-01-15.mp3"][/audio]