South Korean pork imports grow- but for how long?
At 147,000 tonnes, South Korea’s imports of fresh/frozen pork increased 15% compared with last year in the first quarter of 2018.
While all of the key suppliers recorded some growth in shipments, it was primarily the US that capitalised on increasing South Korean demand. Imports from the US were over a third higher than year earlier levels during the quarter, at 50,400 tonnes. Shipments from the EU only increased by 8% (+5,500 tonnes) year-on-year, resulting in their market share dropping by four percentage points. Nonetheless, EU product still accounts for over half of South Korea’s total pork import volumes, at 75,500 tonnes.
The value of the South Korean pork import market also increased 5% on the year in the first quarter of 2018, to 483bn SK Won. However, while the value of US shipments was 30% higher, a 12% decline in the average price of EU shipments meant the total value of these imports was back 5%.
The popularity of pork continues to increase in South Korea, and the latest USDA forecasts anticipate that domestic consumption could increase around 2% (+33,000 tonnes cwe) this year. However, domestic production is also expected to rise 3% (+38,000 tonnes cwe), reflecting expansion in the pig herd recorded during 2017. As such, demand for imported pork may start to falter as the year progresses, especially as Korean consumers generally prefer domestic pork over imported pork.
The EU may particularly struggle to maintain market share into the South Korean market this year. Some reputational damage was suffered in 2017 due to Hepatitis E in imported pork from Germany and the Netherlands. In addition, the weaker US dollar, and KORUS FTA which enables US pork to be imported tariff-free, boost the competitiveness of US product over pork from the EU. With EU production set to expand this year, weaker prospects on this export market later in 2018 may put downwards pressure on the EU market, unless demand from other destinations can expand to compensate.
Bethan Wilkins, Analyst
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