Category: Korea-Business

Another day, another returned US beef shipment:

South Korea found banned bones in a U.S. beef shipment for third time this month and plans to send the entire shipment back to the United States, an official said Wednesday.

South Korea’s Agriculture and Forestry Ministry said it found rib bones earlier in the day in one box of a 16.15-tonne shipment that arrived in South Korea on Aug. 5, the ministry official said. He asked not to be named, citing the agency’s policy. [Kim Kwang-tae, C-News]

The Koreans have picked a good time to keep returning beef shipments because our US politicians are all consumed with General Petraeus’ report to Congress and are not likely to notice all the beef shipments being turned around from Korea. 

Here we go yet again:

South Korea said Tuesday it found bones, banned because as a mad cow disease prevention, in the latest shipment of American beef and will revoke import approval for JSP Swift’s plant in Grand Island, the U.S. packing plant that processed it.

The packing plant was already suspended from shipping meat to South Korea since July, said JSP Swift spokesman Marco Sampaio.    The latest shipment was sent before the Grand Island was suspended for a similar violation in July […]

South Korea’s Agriculture and Forestry Ministry said rib bones were found Monday in one box of a 15.5-ton shipment that arrived in South Korea on Aug. 10.

The ministry said it will send the entire shipment back to the United States. [Journal Star]

At this rate there won’t be any meat packing companies left in the US to ship beef to South Korea. 

OFK has two excellent postings I recommend everyone check out.  The first posting is about the apparent death of the US-ROK FTA.  Joshua as well as Brendon Carr provide some excellent insight into why this agreement is finally dead.  The second posting is about the agenda of the Second Inter-Korean Summit.  As I expected human rights, the closing of forced labor camps, and the freeing of South Korean hostages in North Korea is no where on the agenda. 

It is humorous to listen to Koreans complain about "invisible barriers" to their products:

Sales of Japanese cars in Korea are soaring, but Hyundai Motor isn’t doing nearly so well in its eighth year in Japan. The problem may be the high non-tariff barrier, a stumbling block for Korean automakers in Japan. The Korean government meanwhile does not discriminate against Japanese cars and Korean consumers are also generous towards their hefty price tags.

A Hyundai official in charge of vehicle shipments in Japan shared a recent bizarre episode. A Japanese customs official, detecting a tiny scratch on the windshield of a Hyundai car, demanded the company replace the windshields of all 500 cars that were going through customs at the time. The Hyundai official thought the request was preposterous but had no option but to do as told.

I have to wonder what American car manufacturers and beef producers are thinking reading these complaints?

This is just one reason why the US should not sign a free trade agreement with Korea:

In a move that could hinder the passage of a bilateral free trade pact, South Korea effectively blocked all U.S. beef imports from reaching store shelves Thursday after banned parts were found in a recent shipment.

The discovery of unauthorized animal parts in a July shipment, including spinal material, comes as the United States pushes for a full reopening of what once had been the third-largest overseas market for its beef.

Seoul ended a ban of three and a half years last month on U.S. beef that was prompted by a 2003 outbreak of mad cow disease in the United States, allowing in boneless U.S. beef from cattle under 30 months old.

But South Korea announced Thursday that it was stopping inspections of U.S. beef under quarantine, meaning that beef already in warehouses would be prevented from reaching store shelves. It will now decide whether to ban U.S. beef altogether.

Any agreement signed with the Koreans will not be upheld by their side and the continuous banning of US beef is just a perfect example of this.  The Korean government has now banned all US beef to Korea because of one box of T-bone steaks that was labeled for consumption in the US. 

You may remember back in June US beef shipments were banned when four boxes of beef that were meant for the US market some how ended up in the Korean beef shipment.  It was later found that the four boxes were samples of US beef provided to a South Korean company in California.  This company was some how able to get the four boxes of beef into the US shipment to Korea, which ended up banning US beef all together until the US Congress got involved and threatened trade sanctions. 

 I find it hard to believe that the US beef exporter, Cargil would have been sloppy enough to send another box of meat that was meant for US consumption.  I agree with Brendon that there may be a "Patriotic Korean" somewhere along the export chain making sure that a box of beef meant for the US market ends up in the shipment of beef meant for export to Korea.  There is already evidence of this from the investigation after the June ban and I would not be surprised if another South Korean connection is found again this time. 

Everyone ask yourself, would Korea pull this crap with China?  We already know the answer to that question when the Korean government backed down on their Chinese kimchi ban during the Great Kimchi Crisis of 2005 when China threatened a trade war with Korea.  There has never been a problem with Chinese kimchi since.  If the US government is serious about exporting beef to Korea than it needs to start learning to play by rules the Koreans understand.  Just ask China. 

You can read more at Lost Nomad.

Not even protesters throwing crap on U.S. beef, has been able to slow the demand for the product:

Consumer demand is now sizzling, and experts are predicting a major market shakeup once imports begin to arrive in earnest.

Lotte Mart, the first of the big supermarkets to resume selling the meat, said its stock of 40 tons of chilled beef sold out on the second day Saturday at all its branches. At that rate, it expects to sell the remainder of its frozen U.S. beef by Tuesday morning. Market insiders attribute the higher than expected popularity to the price competitiveness of U.S. beef in comparison to its quality. In other words, it’s cheap and tasty.

The only people more upset about this than the protesting farmers, are the black market ajummas outside the USFK camps.

From the Chosun:

The prices of beef, pork and chicken are all falling in the aftermath of the Korea-U.S. free trade agreement. U.S. beef imports are still minimal but just the expectation of a full fledged import onslaught is weighing heavily on domestic meat prices. It’s good news for consumers but bad for Korean farmers.

The National Statistical Office says prices of pork and both domestic and imported beef fell together for the first time in eight years in the April-to-June quarter. Domestic beef prices slipped 2.0 percent and foreign beef 3.7 percent year-on-year, while pork dropped 6.9 percent.

The Chosun article tries to make the fall in prices for meat seem bad for Korea and even offers this evil looking American cow to back up their claims:

The fall of food prices is good for consumers and if Koreans feel they need to support the domestic meat market than they still have the option of buying Korean meat just like car buyers in the US have the option of buying a cheaper Korean car or a more expensive American one.  Rising quality of Korean cars and cheap prices is forcing American companies to improve the quality and prices of the vehicles they offer.  This is called capitalism and free trade, in the end the consumers win, not just the evil American beef producers. 

From Reuters:

Foreign direct investment plans lodged with South Korea fell for the fourth successive quarter in the April-June period, data showed on Wednesday, denting the Asian nation’s ambition of becoming a regional business hub. The commerce ministry said foreign direct investment commitments fell 35 percent to $1.76 billion for the second quarter from a year earlier, following 28 percent and 3.9 percent annual drops respectively for the previous two quarters.

Analysts listed high equity valuations, high costs of doing business and an inflexible labour market among the factors that have been pushing foreign investors away from South Korea and toward cheaper places such as China, Vietnam and India.

There are a variety of reasons for the drop in FDI to Korea, but I think the Lone Star witch hunt is the straw that broke the camel’s back.

The US and South Korea have had a continuous back and forth fight over the status of US beef in Korea.  The Koreans are looking for anything to ban US beef in order to protect their own domestic beef industry at the expense of South Korean consumers who pay some of the world’s highest prices for beef products.

Earlier this month the fight over US beef continued when South Korea banned US beef again because in a massive shipment of US beef the inspectors found four boxes of beef that were produced for the US market not the Korean market because they contained bone fragments which are forbidden by the South Korean government.  The latest ban was enough that it got Congress moving on this beef fight with threats of bringing the issue up to the World Trade Organization.  These threats got the South Koreans to drop their ban, but for how long is anyone’s guess at this point.

However, what is interesting is that details are now beginning to emerge of how the four boxes found themselves inside the container with the rest of the US beef designated for export to South Korea.   Read the whole article but here is (pardon the pun) the meat of the article:

Four boxes of beef, weighing about 287 pounds, were mistakenly sent to South Korea as samples on June 2, although they were meant for domestic consumption, said Kim Do-soon, an official with South Korea’s Agriculture and Forestry Ministry.

The U.S. Agriculture Department informed Seoul of the latest mistaken shipment, Kim said.

Two U.S. meat plants, run by Tyson Foods Inc., processed the beef and have been suspended from handling meat bound for South Korea, the official said.

A spokesman for Springdale, Ark.-based Tyson, Gary Mickelson, said that, “contrary to South Korean news reports, Tyson Foods did not ship the beef in question.”

“We produced it for domestic sale and consumption,” he said Tuesday. “The product was sold by Tyson Foods to a Minnesota company, which resold the product to Iowa-based Midamar Corp.

“Midamar mistakenly exported the beef to South Korea several weeks ago without our knowledge, involvement or permission,” he said. “We’re once again working through USDA in hopes of quickly resolving this problem.”

Mickelson would not say which two plants were involved. The company has several facilities in Nebraska.

A spokesman for Midamar Corp. of Cedar Rapids, Iowa, said his company did not send the four boxes to South Korea.

Darrin O’Brien, who works in export sales for Midamar, said they were sent to a South Korean company in California, which he said he would not identify. He also said he didn’t know what that company had done with the samples.

Does anyone else find it interesting that the four boxes found in the US beef shipment to Korea were actually sent to a South Korean company in California and then magically some how appeared in the US container in South Korea?

Things that make you go hmmmm…….

The first ever export of rice from Korea to the US has been announced:

A shipment of South Korean rice was headed to the United States on Tuesday, marking the first time that the country has exported its staple food amid efforts to protect the rice market from foreign imports.

The 2-ton shipment, set to be airlifted later Tuesday, is part of 52.5 tons of rice that a Korean-American businessman in Los Angeles, Warren Jung, is importing, said Song Mi-ryong, an official of the North Jeolla provincial government in the country’s southwest.

Koreans living in Los Angeles were expected to be the main consumers of the Korean rice, Song said.

The 136 million won (US$146,000; �109,000) deal marks South Korea’s first rice export.

Song said the importer, Jung, agreed to buy an additional 1,050 tons and is scheduled to sign a US$2.73 million (�2.04 million) contract Wednesday.

The export to “the U.S., a major rice producing nation, represents evidence that U.S. consumers recognized the quality of North Jeolla province rice,” said Kim Wan-joo, governor of the province.

Actually no Mr. Governor because like the article states Korean-Americans are the ones expected to buy the rice, not the general American public.  Additionally what I find interesting is that the US is allowing South Korea to export their rice to America and yet the US cannot export rice to South Korea.