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USMEF: South Korea's pork export status

A USMEF senior leadership team led by Phil Seng, president and CEO, is in the midst of a weeklong series of meetings with key South Korean distributors, wholesalers, retailers and industry consultants to assess current market conditions and fine-tune the organisation's approach for US pork and beef in this key export market.

The USMEF team also is working to assess the impact of several key developments outside the US meat industry that are posing significant challenges for US exporters:

• A series of continuing food safety-related issues – ranging from melamine in Chinese dairy products to dioxin in Chilean pork – that collectively are diminishing South Korea's confidence in imported foods, and

• A dramatic decline in the value of the South Korean currency, the won, which is causing a sharp drop in the international purchasing power of South Koreans.

Meeting with the USMEF team Friday morning, Tae-Yeol Kim, chairman of the Korea Meat Import Association (KOMIA), noted that both US beef and pork face challenges from the devaluation of the won. He indicated that many importers have signed contracts for US products at an exchange rate of 1,050 or 1,100 won to $1, but with the exchange rate now in excess of 1,300 won per $1, the importers have seen margins evaporate. There are reports of importers who are cash pinched due to low sales and mounting inventories.

While these external conditions pose hopefully temporary challenges in this key market, USMEF continues to make strides to achieve broad-based visibility for US beef while pursuing its export strategy to solidify the sharp export gains it has realised for US pork:

• A 47 percent increase in the volume of pork and pork variety meat sales to South Korea in the first eight months of 2008 over 2007 to reach 92,636 metric tons (more than 204 million pounds)

• A 28 percent rise in the value of pork exports, equalling $194 million in the first eight months of 2008

• A 355 percent jump in volume of US pork exports to Korea since 2003

“We expect that US pork exports to South Korea will continue to meet or exceed forecasts for 2008 and South Korea's position as an anchor market for US pork will remain solid,” said Seng, who noted that USMEF has both a consumer promotion and a sales competition for pork scheduled in the country this fall.

“The challenges ahead for the US beef and pork industries here are not small ones,” said Seng. “The recent series of food safety issues involving foreign food imports has compounded fears in South Korea that were raised during this summer's public protests against US beef. And the global economic turmoil has dramatically reduced the value of both the won and the Australian dollar, crimping US competitiveness. We will be addressing these and other issues with our members at the USMEF board meeting in November.

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