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South Korea Agribusiness Q2 2010

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An electronic version (mostly PDF, but can be Excel or PPT), which is either available for immediate download or will be sent via email by the Publisher of the report. The licencing for an electronic version is for use by the purchaser ONLY.

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Market

Agriculture, Farming & Raw Materials

Report Type

Market Research

Country

South Korea

Published

5 February 2010

Number of Pages

59

Report Delivery

Download

Delivery Lead Time

Immediate

Publisher

Business Monitor International

File Format

-

The price of this market report covers 4 quarterly reports on this sector. This quarterly report will be downloadable instantly as a PDF document, with the 3 remaining reports delivered at regular intervals throughout the year.

The new year started badly for South Koreas agribusiness sector. On January 2 foot and mouth disease (FMD) was found in cattle on a dairy farm in Gyeonggi-do. The government destroyed all the animals on the infected farm and tightened quarantine rules to try and prevent the spread of the disease. Despite this, the initial outbreak was followed by four further outbreaks in the middle of the month. These are the first outbreaks of the disease since 2002. The two previous outbreaks in 2000 and 2002 cost the industry KRW300bn (US$261mn) and KRW150bn respectively. With the experience gained from the previous outbreaks, the government should be able to bring the current outbreak under control more quickly and we do not see the economic cost being as high this time around.

The FMD outbreak followed hot on the heals of the appearance of H1N1 swine flu on farms in the country. The disease first appeared in December and by late January, 18 outbreaks had been reported, the majority in North and South Gyeongsang provinces. This saw the price of pork briefly fall as wary consumers avoided the meat, despite assurances of its safety. Further worries were caused by the discovery of low pathogenic avian flu in wild ducks in December.

Away from livestock, the Korean government is still struggling to formulate policy to deal with a surplus of rice supplies. In 2009/10, Korea will bring in another bumper crop of the grain - we have revised up our forecast to 4.91mn tonnes in response to a data release by Statistics Korea. With domestic demand on a long-term declining trend and Korean rice too expensive for large scale exports, the government is struggling to support prices in the face of the abundant stocks.

With this in mind, there was news of a large increase in demand for Makgeolli, traditional Korean rice wine. In the first 10 months of 2009, production was up 37.8% according to a Statistics Korea report. The government is trying to promote an increase in the use of rice in food processing to create extra demand for the crop.

The government has also recently stepped up purchases of agricultural land to make it easier for Koreas farmers, the vast majority of whom are well into retirement age, to leave the sector. The government of President Lee Myung-Bak is hoping to make the sector more commercial, moving away from the traditional model of inefficient smallholder farmers propped up by government subsidies. Reforms to the cosseted agricultural sector are always controversial. In the long term, however, reform is desperately needed as the cost of subsidies rises and few younger people who could serve in reforming production are drawn to the sector.

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Select License Type

Electronic License

Electronic License

An electronic version (mostly PDF, but can be Excel or PPT), which is either available for immediate download or will be sent via email by the Publisher of the report. The licencing for an electronic version is for use by the purchaser ONLY.

£635.00

Change Currency

GBP EURO USD

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