US beef captures 8% market share in Korea
US beef has increased its market share at 58%, from 50% reported last year in September. The information was made public by Meat and Livestock Australia (MLA) who also announced the imminent trigger of the safeguard condition for its own exporters in this market.
The US is the main competitor of Australian beef in South Korea, and it could take advantage to increase further its market share by the current situation that will set a 40% tariff for Australian products until the end of the year.
Under the Korea-Australia Free Trade Agreement (KAFTA), Australia has an annual quota of 167,327 tonnes of beef that can be delivered to Korean market with a 26.6% tariff and once that volume is exceeded the safeguard is triggered immediately. Strong demand in Korea for Australian beef has led to the safeguard being fully utilised since KAFTA came into force.
As a result of safeguard being triggered, the revised tariff of 40% will be applied on imports from Australia from the trigger date until 31 December 2018. The US is the major competitor to Australia in the Korean imported beef market, and their tariff will remain at 21.3% due to a greater safeguard volume, under the Korea-US Free Trade Agreement (KORUS).
The tariff differential between the US and Australia will now expand from 5.3% to 18.7%, creating further challenges for Australian beef in an already highly competitive market. "The US now occupies 58% of market share (September 2017 to August 2018) – up 8% points from the same time last year. However, consumer and trade support for Australian beef remains strong,", said MLA Korea’s Country Manager, Charlie Ko.
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