The Hankyoreh, Seoul
S.K. cattle prices fall in anticipation of U.S. beef imports
Rapid rise in pace of U.S. beef sales expected
14 June 2007
The price of Korean cattle fell for the first time in eight years below that of bulls. The drop is largely attributable to concerns that the cattle market will likely be hard-hit by a recently signed free trade agreement (FTA) between South Korea and the United States.
Under the FTA, the U.S. will likely step up pressure on market opening here, while now Canada is seeking beef exports to South Korea, raising a chance that the current price declines will continue for the time being.
According to the National Agricultural Cooperative Federation, the average price of one Korean bull (weighing 600 kilograms) was 4.758 million won (US$5,110) as of June 5, 2,000 won more expensive than a cattle. Two days later, the price gap widened to 12,000 won.
One of the reasons that the price of cows was more expensive than oxen was because cows can have calves, but the price of the cows has fallen further, as many people are worried that demand could decline due to increased inflow of U.S. beef down the road, said Kim Seong-ho, an official of the federation.
U.S. beef has already hit the local market. A total of 248 tons of U.S. beef have been imported since April when the import ban was lifted. Of them, 51.2 tons of meat were returned or destroyed due to their failure to pass local quarantine standards, with 97 tons are still under inspection. The remaining 85.3 tons are in circulation.
Experts say that U.S. beef imports will likely be on a rapid rise. The government recently lifted a week long suspension on beef imports from the U.S. after accepting the explanation by Washington that it was a mistake that it exported beef slated for domestic use. This seeming leniency from the South Korean government sparked many local importers to start handling U.S. beef in the local market, as they see it unlikely that a full-fledged ban on U.S. beef will ever occur again.
"Imports of U.S. beef will soon increase to 7,000 - 8,000 tons per month. If quarantine standards are revised to be more favorable to the U.S. beef industry, the amount will rise further," a local beef importer said.
Canada, which is in negotiations with South Korea on an FTA, has also made an official request for beef market opening here. At the time when Canada, like the U.S., received the status of mad cow disease controlled country from the the International Animal Health Organization last May, South Korea has little room to reject its demand for market opening.
Peter MacKay, foreign minister of Canada, said during a visit here earlier this month that an FTA between the two nations cannot be possible without lifting the ban on its beef to the South Korean market. Canadian beef has been banned from being sold here since 2003 when mad cow disease hit the country. In January and May this year, the disease was also discovered in Canadian cattle.
