Fast Market Research recommends "South Korea Agribusiness Report Q2 2012" from Business Monitor International, now available
Boston, MA -- (SBWIRE) -- 05/21/2012 -- We believe that the implementation of the Korea-US free trade agreement in March 2012 will be the final nail in the coffin for South Korea's agriculture sector. The government has pledged KRW24.1trn (US$20.8bn) to provide fiscal support for domestic fishing and agricultural households until 2017; however, we believe this will be a short-term band-aid. More likely, these communities will largely be unable to respond to more competitively priced agriculture products such as meat and grains. We expect consolidation of the industry over the longer term as a result.
- Wheat production to 2015/16: +48.7% to 55,000 tonnes. The free trade agreement with the US is set to come into effect in March 2012. We believe that with the tariff on US wheat imports eliminated, this growth will be even harder to achieve.
- Rice production to 2015/16: -5.1% to 4.1mn tonnes. The government has said it will provide a subsidy of up to KRW3mn (US$2,700) per hectare for farmers that plant other crops on their land, with the ultimate aim of reducing South Korean rice production to approximately 200,000 tonnes per year.
- Pork production to 2015/16: +30.0% to 1.1mn tonnes. Like beef and poultry, South Korea will remain a net pork importer over the medium term.
- Real GDP growth: 1.9% year-on-year (y-o-y) in 2012 (down from 3.7% y-o-y in 2011 and set to average 4.0% out to 2016)
- Consumer price index: 2.5% y-o-y in 2012 (down from 4.2 y-o-y in 2011 and set to average 3.0% from 2011 to 2016).
View Full Report Details and Table of Contents
South Korea's free trade agreement (FTA) with the United States, which allows tariff-free imports of agriculture goods (from an average 54% tariff previously), will finally take effect on March 15 after being agreed upon in October 2011. It will cover goods such as wheat, corn, soybeans for crushing, cotton, cherries, pistachios, almonds, orange juice, grape juice and wine - amounting to close to two-thirds of US agricultural exports into South Korea. Taxes also will be reduced for key agriculture imports such as livestock. To date, South Korea is the fifth largest agricultural export destination for US products, and the US is already the top supplier of the Asian country's agriculture needs.
Rice remains conspicuously left out of South Korea's free trade agreements with the US and Europe. Indeed, owing to aggressive farmer lobbying and a desire to maintain self-sufficiency of the key grain, the South Korean government has decided to maintain trade barriers for production of rice. It also will keep the minimum market access quantity, which was set at 350,000 tonnes in 2011. Of that, 45% originated from China, with 29% from the United States and another 15% from Thailand. We believe that this policy will continue to be upheld even in the midst of discussions for an FTA with China.
About Fast Market Research
Fast Market Research is an online aggregator and distributor of market research and business information. Representing the world's top research publishers and analysts, we provide quick and easy access to the best competitive intelligence available. Our unbiased, expert staff will help you find the right research to fit your requirements and your budget. For more information about these or related research reports, please visit our website at http://www.fastmr.com or call us at 1.800.844.8156.
Browse all Food research reports at Fast Market Research
You may also be interested in these related reports:
- South Africa Agribusiness Report Q2 2012
- Mozambique Agribusiness Report Q2 2012
- Russia Agribusiness Report Q2 2012
- Mexico Agribusiness Report Q2 2012
- Indonesia Agribusiness Report Q2 2012
- Turkey Agribusiness Report Q2 2012
- India Agribusiness Report Q2 2012
- Bangladesh Agribusiness Report Q2 2012