YTD Korean Beef Imports Rise Despite Higher Prices
•Canada and the US augmented their market share, while Australia’s declined.
•While YTD exports were strong, imports in October declined by 25% YoY, which could signal demand is softening due to high price pressure.
Korean imports of beef (fresh, chilled, or frozen) totaled 417 thousand mt in January-October 2022, with a total value of $3.76 billion. Imported volume rose 3% compared to the same period in 2021, while imported value rose 27%, as the average import price rose 20% to $10.61/kg.
Fresh or chilled beef accounted for 21% of the total (down from 24% in Jan-Oct 2021), while the remainder of imports was in the form of frozen beef. The share of fresh or chilled beef fell due to a considerably higher price, at $13.46/kg, compared to frozen beef's $7.76/kg.
For fresh or chilled beef, imports from the US made up 64% of the total, while imports from Australia represented 35%. While imports from both countries experienced an annual decline, those of US origin experienced a sharper one, owed to a higher price ($13.59/kg compared to Australia's $13.17/kg).
For frozen beef, imports from the US made up 51% of the total, followed by Australia, with 36%, New Zealand, with 6%, Canada, with 5%, and Mexico, with 2%. Among these five suppliers, Canada experienced the fastest growth (+127% YoY), despite having a higher average price than Australia and New Zealand, at $7.97/kg. For this product, the US also experienced notable growth (+10% YoY).
The growth of imports from Canadian origin was partially driven by a decline in the tariff for this product in 2022 compared to the previous year. Tariffs are set to be completely eliminated for this product by 2030 as a result of the Korea-Canada free-trade agreement, but the data also signals a growing preference for Canadian and American beef. It's also worth noting that beef exports from Australia declined overall, as this country was still in a herd rebuilding process during this year, which led to lower beef production. Canada and the US were the net gainers of Australia's lost share.
An increase in imported volume despite much higher prices underlines Korea's strong beef demand during 2022. Demand strengthened as the country lifted pandemic restrictions. Imports in several countries fell due to a substitution effect favoring cheaper protein, such as poultry and pork, which didn’t seem to affect Korea. A temporary removal of tariffs for beef imports up to 100 thousand mt was implemented in July, which also helped to uplift demand. Nonetheless, beef imports in October were down 25% YoY, which could signal that demand began to soften due to the price pressure on consumers. While the import price in US terms has declined 15% from the peak of $11.19/kg in April, it has only declined 1% in terms of Korean won, which has weakened substantially against the US dollar throughout 2022.
Source: Tridge and Korea Customs
