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Update on Korea’s First-Quarter Beef, Pork Imports

Korean-Beef-VM-Imports

South Korea’s March imports of beef/beef variety meat increased 23 percent year-over-year to 26,672 metric tons (mt), including strong growth from the United States (8,914 mt, +31 percent) and Australia (15,101 mt, +28 percent). First-quarter growth (80,230 mt, +5 percent) was also driven by Australia (42,743 mt, +10 percent) and the U.S. (29,880 mt, +8 percent), while imports were smaller from New Zealand (6,948 mt, -22 percent).

On a value basis, first-quarter imports from the U.S. were up 25 percent to $192 million, with U.S. market share increasing from 40 percent to 43 percent. The average unit value for U.S. chilled beef entering Korea in the first quarter was 21 percent higher than the Australian average. For frozen beef, the difference was 36 percent.

Korea’s pork/pork variety meat imports in March surged 20 percent to 32,129 mt. This was driven by strong growth from the European Union (15,438 mt, +67 percent), while imports were lower from other major suppliers. For the first quarter, Korea’s total imports were up 2 percent to 92,392 mt, with larger imports from the EU (40,017 mt, +29 percent) offsetting lower volumes from the U.S. (34,672 mt, -8 percent), Canada (8.863 mt, -20 percent) and Chile (6,155 mt, -28 percent).

Korean-Pork-VM-Imports

Korea’s imports from the EU are primarily frozen bellies from Germany. Germany and other EU suppliers likely benefited from Korea’s high domestic prices, as customers stocked up on pork belly for the upcoming barbecue season. Prices on imported bellies in January-February were up slightly from 2013, but started to increase more dramatically in March (+8 percent year-over-year) and have been nearly 20 percent higher this month.

Germany’s main export markets (outside the EU) for pork muscle cuts in 2013 were Russia, China and Korea. Without access to Russia, and with a major plant delisted for China earlier this year (now relisted), Germany has been aggressively growing exports to Korea. Germany’s hog prices have been rebounding since early March but are still down 4 percent from a year ago. Under the Korea-EU FTA, duties on frozen bellies from the EU are currently 16.3 percent and will be reduced to 14.3 percent on July 1 (down from the original, a base rate of 25 percent).

The most commonly imported items from the United States are picnics and butts. Prices for these cuts have surged due to PEDV-related shortages in the U.S. and in anticipation of tight supplies in the future. U.S. wholesale prices for picnics, trimmings and butts are 70 to 80 percent higher than they were last year. Duties on picnics and butts from the United States are currently 8 percent, also down from a base of 25 percent. On a positive note, Korea’s pork variety meat imports from the U.S. were up 14 percent in the first quarter to 2,307 mt.

Korea’s first-quarter chilled pork imports were down 14 percent to 2,785 mt. Chilled imports from the U.S. were down just 3 percent to 1,676 mt, while imports from Canada (375 mt, -49 percent) and Chile (318 mt, -39 percent) declined more sharply. Chilled pork imports from Mexico were up 64 percent to 410 mt.

Import data source: Global Trade Atlas