South Korea’s swine industry could take one or two years to recover from a foot-and-mouth epidemic that has boosted meat purchases by one of the world’s top pork importers.
A long-term boost to the country’s pork imports, mainly from the United States, could support U.S. hog futures already at record highs partly on the back of potential Korean demand.
Pork shipments into Asia’s No. 4 economy may rise by 20 to 30 per cent from last year’s 290,000 tonnes after nearly a third of the pig herd was culled, and the country lowered tariffs on meat imports in an effort to contain food inflation.
“When one removes that many animals from their domestic herd, it would suggest that it’s going to take, in the case of swine, a couple of years to come back,” said Martin Rice, executive director of Canadian Pork Council.
Foot-and-mouth started on Nov. 28 and snowballed to 140 cases in eight provinces within two months, triggering a cull of 2.8 million pigs and nearly 150,000 cattle.
“As the number of sows fell to 700,000-750,000 from last September’s 980,000, it will be hard for hog population to rise by the end of 2011,” Korea Rural Economic Institute said in a report.
LOWER TARIFFS TO BOOST IMPORTS
South Korea earlier this month dropped its 25 per cent tariff on up to 60,000 tonnes of pork to be imported through June to ease supply and try to contain prices that are at their highest since at least 2005.
On Tuesday a Finance Ministry official said Korea may expand the volume of tariff-free port imports if prices continue to shoot up, as consumer inflation in January jumped to a higher-than- expected 4.1 per cent, above the central banks inflation target.
Korean swine farmers strongly opposed the government’s tariff reduction, saying it threatened to destroy the domestic industry.
U.S. PORK FAVOURED
The government keeps assuring consumers that meat from foot-and-mouth-infected animals is not harmful to humans.
But consumers increasingly opt for imports, which cost less and look cleaner as all local pigs and cattle have been vaccinated against foot-and- mouth, industry sources and local media said.
Whi le U.S. January pork export results are not yet available, cash sources and traders said South Korea has likely bought 60,000 tonnes or more of U.S. pork since the start of the year.
The U.S. is the largest exporter of pork and poultry to South Korea, while Canada is the second-largest pork exporter.
The foot-and-mouth outbreak in South Korea could also slow the settling of trade disputes.
Canadian beef has been banned in South Korea since a 2003 discovery of mad cow disease. Canada has complained to WTO and a decision is expected early in 2011. The two countries have been talking to each other ahead of the decision.
“It makes it more difficult to negotiate because the people we would talk to are very preoccupied,” said John Masswohl, director of government and international relations for the Canadian Cattlemen’s Association.
“It’s the same animal health officials, same food safety officials who are working around the clock to try and contain the situation over there. It becomes a distraction.”
“Whenoneremovesthatmanyanimals fromtheirdomesticherd,itwouldsuggest thatit’sgoingtotake,inthecaseof swine,acoupleofyearstocomeback.”
– MARTIN RICE, EXECUTIVE DIRECTOR OF CANADIAN PORK COUNCIL