Just Released: "South Korea Agribusiness Report Q4 2013"

From: Fast Market Research, Inc.
Published: Fri Nov 01 2013


Our sanguine outlook on the long-term growth of South Korea's agricultural sector is based on the government's decision to gradually remove barriers to trade and move up the value chain. Indeed, the expansion of education and financial support for farmers to allow them entry into the food processing business, as well as plans to revitalise agriculture tourism, will yield results for the industry over the longer term and help it to remain relevant to the South Korean economy. Working out a compensation plan for free-trade-agreement-affected farmers is also integral. We thus view the newly implemented policy to compensate Hanwoo beef and cattle farmers a step in the right direction.

Key Forecasts

* Beef production growth to 2016/17: 17.6% to 367,000 tonnes. Even with the anticipated increase in beef output, the country will remain reliant on imports to meet demand. Indeed, base effects are the key reason for the significant growth rate.
* Milk production growth to 2016/17: 8.2% to 2.2mn tonnes. This growth is likely to be supported by improved yields per cow and favourable pricing structures for farmers based on a new agreement to raise the average price of raw milk.
* Wheat production growth to 2017: -4.0% to 4.0mn tonnes. This is significantly below the government's objectives. Given that a free trade agreement (FTA) with the US, which came into effect in March 2012, eliminates tariffs on US wheat imports, we believe the government's objective will be even harder to achieve.
* BMI universe agribusiness market value: US$34.0bn in 2013 (down from US$34.3bn in 2012; forecast to decline annually by 3.5% on average to 2017)
* 2013 real GDP growth: 4.6% year-on-year (y-o-y) (up from 1.9% in 2012; predicted to average 4.1% from 2012 until 2017).
* 2013 consumer price index: 2.7% y-o-y (down from 4.2% in 2012; predicted to average 3.0% to 2017)
* 2013 central bank policy rate: 3.0% (down from 3.25% in 2012; predicted to average 3.4% from 2012 until 2017).

Full Report Details at
- http://www.fastmr.com/prod/689044_south_korea_agribusiness_report_q4_2013.aspx?afid=303

Key Revisions To Forecasts

* 2012/13 pork consumption forecast increased, to 1.63mn tonnes (compared with a previous forecast of 1.58mn tonnes). This is on the back of higher slaughter rates due to an oversupply of hogs.
* 2012/13 milk consumption forecast increased, to 2.04mn tonnes (compared with a previous forecast of 1.92mn tonnes).

Key Developments

The Ministry of Food, Agriculture and Rural Affairs will be compensating cattle farmers who have suffered economic losses as a result of the KORUS FTA. However, as the amount of direct payment for the losses caused by the FTA cannot exceed the total aggregated measure of support as set under the WTO Agricultural Agreement, the final amount of support per animal and total support amount will be decided sometime in October after undergoing deliberation by the committee.

About Fast Market Research

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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.

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Contact Name: Bill Thompson
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