South Korean pork prices rise on FMD restrictions

Wholesale pork prices in South Korea have risen because of lower slaughter rates, following nationwide restrictions on livestock movement in an effort to curb the spread of foot-and-mouth disease (FMD).

The wholesale price of pork was 5,878 South Korean won/kg ($4.40/kg) over 1-10 May, down by 11pc from W6,627/kg a year earlier, according to the country's agricultural ministry (Mafra) on 15 May. But prices rose by 10pc from 1-10 May to W6,467/kg on 11 May.

Mafra has attributed the price rise to FMD prevention measures, which restricted nationwide movement of hooved mammals such as cattle and pigs. This subsequently caused slaughter rates to plummet from the May average of over 70,000/d to 15,000/d on 11 May. Mafra has said this is a "temporary factor".

South Korea is one of the largest global pork consumers at 2.086mn t in 2022, the eighth-largest consumer that year, according to OECD data. The country imported an average of 376,734 t/yr of pork over 2019-2022, a US Department of Agriculture (USDA) report released in April showed. This translates to imports meeting about 20pc of the country's pork demand.

An outbreak of FMD in South Korean cattle prompted a nationwide restriction on movement of hooved mammals from 11-12 May, which also disrupted short-term pig supply. But there has been no reported FMD case on pig farms, and no impact on the number of pigs being raised. Mafra consequently predicts there will be no disruption to future supply, with wholesale pork prices to soon stabilise below year-earlier levels of W6,385/kg, assuming no further spread of FMD. Consumer prices in June are also likely to be lower than the previous year.

There have been a total of seven FMD outbreaks, of which six are in North Chunghceong province's Cheongju city. The cattle raised on the farms will be culled in accordance with emergency action guidelines.

Restrictions on pig movement were lifted on 15 May, and pork auctions are being held with prices at around W5,980/kg, down significantly from W6,467/kg on 11 May.

Pork outlook

Mafra acknowledged that wholesale pork prices have been rising since March, but attributed this to seasonality as summer approaches. Pork production typically falls as temperatures rise, while demand increases as people dine out more often. This results in price gains until summer, with production rising and prices falling after autumn.

The number of pigs slaughtered over January-April was about 6.32mn, an all-time high. This was up by 0.3pc from the previous all-time high achieved in the year-earlier period. Mafra expects about 1.52mn pigs to be slaughtered in May, in line with year-earlier levels, despite the temporary supply disruption.

Current pork prices are at W2,571/100g as of early May, 4.1pc below W2,682/100g the previous year, Mafra said citing Korea Institute for Animal Products Quality Evaluation data.

Mafra expects pig supply to remain at year-earlier levels despite the outbreak of diseases such as African swine fever (ASF) and FMD, although the recent price surge might have resulted in market concerns about supply disruptions. There were seven ASF outbreaks last year, which resulted in the culling of 0.3pc of the total breeding population. There have been eight ASF cases as of April, and about 97,000 pigs or 0.9pc of the total population were culled.

The ministry plans to encourage meat processing companies and meat packaging firms to release their pork inventories. Mafra also expects to restart German pork imports as early as July-August, with imports from Germany suspended since September 2020 owing to an ASF outbreak. Germany was South Korea's second-largest pork supplier before the suspension at about 80,000 t/yr of pork.

The ministry will also consider raising pork supply through quota tariffs in the second half of the year, should prices continue to rise.

By Tng Yong Li

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