South Korea announced plans to nearly double the duty-free pork import quotas. According to Reuters, the quotas have increased by 50,000 tons to a total of 110,000 tons of frozen pork imports. It is the latest move by a country overcome with a severe foot-and-mouth disease outbreak.
Yim Jong-yong, South Korea’s Vice Finance Minister said that it was the latest move to increase pork imports while preventing food inflation costs related to the FMD outbreak. South Korean consumers have already seen a 4.1 percent jump in January’s prices compared to a year earlier.
South Korea’s latest FMD outbreak began in November, and since then more than a third of its hog population has been slaughtered to prevent the spread of the disease.
The country first announced in January its decision to eliminate tariffs on 60,000 tons of frozen pork – the tariff-free period began on Feb. 1 and was originally intended to run to the end of June. Now officials expect the duty-free period to be extended well into the second half of the year.
U.S. pork futures on the Chicago Mercantile Exchange rallied to record highs in response to South Korea’s quota increase. The U.S. is the biggest pork exporter to South Korea. Curt Thacker of Dow Jones said in the latest US Hogs report that lean hog futures closed mixed on Friday with the front months April through June lifted by expectations for continued strong exports sales.
“In early trading, futures climbed to their session highs amid news overnight that South Korea would expand its purchases of duty-free pork to 110,000 metric tons from 60,000 tons announced earlier,” Thacker said. “The nation needs more pork to stem inflation after nearly one-third of its swine was destroyed in an effort to curtail the spread of foot-and-mouth disease.”