- The move is part of efforts to combat inflation ahead of Lunar New Year
Date: January 11, 2011
Source: JoongAng Daily
Korea's antitrust body has launched an extensive investigation into potential cartel activities related to recent or potential price increases for basic items such as flour, soybean milk, cheese, kimchi and take-out coffee.
The Fair Trade Commission said yesterday that it had started the probe this week on possible price-rigging in the run-up to the Lunar New Year holiday.
The agency recently sought to improve price-monitoring activities by restructuring its market monitoring, cartel investigation and consumer policy divisions.
“With the inflationary pressure growing recently, there are likely to be collective actions by companies to raise prices and there is a need to watch and fix these problems,” the agency said in a statement.
The move comes as the Lee Myung-bak administration had declared a “war” on inflation.
The new Fair Trade Commission Chairman Kim Dong-soo has also reiterated that one of his main roles is to fight inflation. Kim recently revamped senior positions at the agency to put more emphasis on stabilizing consumer prices and created a task force to watch over inflation.
The investigation is the first inspection led by the task force. The Ministry of Strategy and Finance outlined policies yesterday to stabilize consumer prices prior to the Lunar New Year holiday, a period when the prices of agricultural goods tend to sharply rise.
The ministry plans to closely monitor the prices of 16 agricultural products and six services between Jan. 12 and Feb. 1. Among the products are radishes, cabbages, garlic, apples, beef, pork, chicken, eggs and croaker and mackerel fish. The services include haircuts and public saunas.
The ministry intends to increase the supply of the 16 products through the agricultural cooperatives including the National Agricultural Cooperative Federation.
Around the holidays, the ministry plans to raise the monetary supply through both state-run and commercial banks and government institutions for small and medium-sized enterprises and low-income households.
The total amount furnished through the market will be 20.98 trillion won ($18.6 billion) around the holidays, up from 19.87 trillion won in the same period last year.
The Small and Medium Business Administration will provide 400 billion won and the Bank of Korea and state-run banks will offer 8.1 trillion won. Commercial banks will supply 8.4 trillion won.
The economy-related ministers, including Finance Minister Yoon Jeung-hyun, met on Monday and discussed ways to minimize increases in school tuition, including kindergarten fees, as well as public utility rates, and decided to come up with measures to stabilize jeonse, or key money deposits, for housing leases.
They decided to increase low-rate loans to those who need a lump sum of money to make payments for housing leases.
Date: January 12, 2011
Source: Hankyung Economy
Kim Kyung-soo, director general of the International Economic Bureau, said yesterday he expects to complete a nuclear power cooperation deal with India by June, adding that the bureau will focus on green growth this year.
During a press briefing, Kim said the ministry will aggressively support businesses entering green markets overseas, including the fast-growing water supply business.
“People have been saying that Korea has made slow progress ... since the United Arab Emirates [nuclear] deal, but our bureau is busy with nuclear power cooperation pacts,” said Kim. “Following [agreements] with South Africa and Japan last year, we have made a preliminary agreement with India and will finalize the deal within the first half of the year.” Kim said this will allow Korean businesses to enter India's nuclear energy market.
India currently has 17 reactors and plans to add 50 more by 2030. Kim said it is too early to make conclusions on the nuclear deal with Turkey.
The IEB - which falls under the Ministry of Foreign Affairs and Trade - is also in talks with Thailand and Belarus.
Kim made it clear that the ministry will be supportive of Korean businesses engaged in green growth and renewable energy.
“What our ministry can do is to be fully in support of [renewable energy] changes and challenges,” he said. Kim said the water supply business is valued at $500 billion per year and that Korea takes up less than $500 million, or 0.1 percent, of the industry.
Businesses will look for deals in overseas water supply markets that involve everything from building to financing and managing the facilities.
Date: January 13, 2011
Source: Newsis
With thousands of cows falling victim to foot-and-mouth disease (FMD), Korea's milk supply could be in jeopardy.
Experts say that though the supply of domestic raw milk hasn't fallen to worrying levels yet, a shortage is possible if foot-and-mouth continues to spread unchecked.
According to the Ministry for Food, Agriculture, Forestry and Fisheries yesterday, roughly 1.11 million cows have been slaughtered since the latest FMD outbreak began in late November last year.
And in the face of the worst outbreak of FMD, consumers have begun to ask if the milk supply will dry up. The dairy industry has been quick to assuage any worries about a shortage.
“All in all, total production of raw milk must be reduced by about 25 percent for supply to fall below demand for drinking milk, and such a situation is far from happening,” said Lee Dong-cheol of the state-established Korea Dairy Committee.
However, if foot-and-mouth disease is not contained, the situation could deteriorate. “Raw milk doesn't just go into drinking milk, but everything from fermented products, infant formula, coffee and cheese,” Lee explained.
“If foot-and-mouth disease spreads further, the supply might not be enough for all products that use milk, especially in March when school starts and demand for milk goes up.”
According to the Korea Dairy Committee, about 2.11 million tons, or 68 percent of 3.11 million tons of raw milk consumed in Korea, was supplied domestically in 2009. Because the shelf life of drinking milk is at best 10 days, most dairy products made from raw milk cannot use imports.
The tight balance between supply and demand was instituted after an oversupply of raw milk in 2002 caused milk to be discarded.
But that balance has been under threat ever since the initial wave of FMD early last year caused roughly 4,000 dairy cows to be killed.
Under the current outbreak, some 13,000 local dairy cows have been culled as of Jan. 5. “As of now there is no problem in our raw milk supply but we are keeping an eye on the situation,” said Sung Gi-an, a representative of Maeil Dairies.
- Excess supply providing some safeguards
Date: January 14, 2011
Source: Hankyung Economy
The devastating outbreak of foot-and-mouth disease has caused more than a million livestock to be slaughtered.
In just 40 days since the outbreak, 3.2 percent of the nation's cows and 12.4 percent of pigs have been culled.
In addition, the transport and slaughtering of livestock have been strictly controlled to contain the disease.
Despite the threatened imbalance in the supply and demand of beef and pork, their prices remain stable.
How is this possible? In recent years, the number of cattle and pigs has greatly increased. According to Statistics Korea, there were 3.35 million cows in the country last month, of which 2.92 million were raised for meat. In addition, there were 9.88 million pigs.
The cow population has increased by 290,000 from a year ago and by 920,000 from four years ago. The significant increase of cows was in response to fears of imported beef triggered by mad cow disease.
The increase also stemmed from consumer preference for Korean beef as a result of a new labeling system designating the origin of food products.
The number of pigs is also the highest in a decade, after increasing by 800,000 in the last two years alone. Due to the rising number of pigs, the government earlier was worried that the price of pork would tumble.
“At the time there was even talk that we should come up with measures similar to those in the early 2000s when the price of beef plunged due to excess supply,” said an official at the Ministry for Food, Agriculture, Forestry and Fisheries.
Given the great increase in the number of cows and pigs, foot-and-mouth disease is actually contributing to a stabilization of prices for beef and pork.
“Although roughly 100,000 cows have been removed, it has not affected supply and demand,” said Chung Seung, the food and agriculture vice minister.
Meanwhile there have been signs that demand has been shrinking. Although there is no up-to-date statistics available, market analysts say that consumers tend to cut back on meat consumption when there are outbreaks of animal-related diseases like FMD.
“We found that during the FMD outbreak in 2002 meat consumption fell more than 10 percent,” said Huh Duk, senior researcher at the Korea Rural Economic Institute.
The drop in meat consumption, however, was limited after the government and media informed the public that FMD is harmless to humans.
The wholesale price for beef has also seen little change.
According to the Korea Institute for Animal Products Quality Evaluation, the average auction price this month for 1 kilogram of top quality beef sirloin was 14,630 won ($13), which is only 600 won more than what it was in early November before FMD broke out.
Beef prices at big retail marts such as E-Mart and Lotte Mart even went down.
The Korea Agro-Fisheries Trade Corporation said that the average selling price for 500 grams of premium beef was 4,000 won cheaper than in November, while the price of pork was 1,000 won less.
“We have no problem in our supply since we have sufficient stock and we have access to farms nationwide,” said an E-Mart official.
“The price may look like its falling because of discount sales or because consumers are cutting back from buying meat.”
The situation at smaller neighborhood meat shops is different. The biggest problem that such small outlets face is that they have more difficulty in securing supplies because of limited access to distribution networks.
“Around this time of year there would be a lot of wholesale merchants who would be holding various campaigns in selling meat,” said Park Myeong-hee, who runs a meat store in Goyang, Gyeonggi.
“Now I have to go out to the farm to buy the meat.” He said prices at farms have gone up and he has no choice but to raise the retail price for beef sirloin 3,000 won more per kilogram.
“I'm struggling not to raise the price on pork,” Park said.
The situation is expected to get worse for small retailers if the FMD situation continues. If slaughtering and curbs on transporting livestock continue, supply at major retailers could also run out.
KERI forecasts that the price of meat is expected to rise 2-3 percent this month if the situation fails to be resolved.
Date: January 14, 2010
Source: Bank of Korea
The Monetary Policy Committee of the Bank of Korea decided today to raise the Base Rate by 25 basis points to 2.75%.
Based on currently available information, the Committee considers emerging market economies to have sustained their favorable performances, while the major advanced economies have kept up their moderate paces of recovery.
Going forward, the Committee forecasts the global economy to sustain its pace of recovery; nevertheless, the Committee does not rule out the possibility of future developments, for example international financial market unrest arising from the sovereign debt concerns in some euro area countries and heightened volatility of international commodity prices, posing a risk to the global economy.
For Korea, the Committee judges the domestic economy to have maintained its underlying upward trend; although facilities investment has declined, exports have continued their buoyancy and consumption has steadily increased. Labor market conditions have also shown ongoing improvement, led by the private sector.
Going forward, the Committee anticipates that the domestic economy will keep up its underlying trend, even in the presence of external risks. Consumer price inflation in Korea reached the 3.5% level in December, driven mainly by rises in the prices of petroleum products and farm products.
In the coming months, the Committee expects inflationary pressures to persist and inflation expectations to increase as the economic upswing continues and international commodity prices rise.
In the real estate market, upward movements in housing prices have emerged in Seoul and its surrounding areas, and those in the rest of the country have sustained their upward trend, while leasehold deposits have continued to rise.
In the financial markets, stock prices have risen significantly and the Korean won has appreciated, due mostly to the increased inflows of foreign stock investment funds and to expectations for geopolitical risks around the Korean Peninsula to ease.
Long-term market interest rates have increased, in response chiefly to inflation expectations and to foreign investors` net sales of bonds. Mortgage lending has grown on a large scale, amid an increase in housing transactions.
Looking ahead, the Committee will conduct monetary policy in such a way as to firmly anchor the basis for price stability while the economy continues its sound growth. In carrying out policy, the Committee will take overall account of financial and economic conditions both at home and abroad.
Date: January 15, 2010
Source: Mail Business Newspaper
Mobile device part makers and service providers continue to exit South Korea today, in a country that was once highly praised as a test bed for the global IT industry, showing off its world's first third generation (3G) mobile communications and the digital multimedia broadcasting (DMB) technology.
They are leaving Korea for other countries such as the United States and Europe, because they are not able to conduct tests on fourth generation (4G) long-term evolution (LTE) in Korea due to more a year of delays in preparation work for the service.
They are also finding it easier to launch services in other countries because of fewer regulations.
The mobile industry is currently accusing the Korean government of driving those companies out of the country. In reality, the Korea Communications Commission (KCC) was left behind of the U.S. and Japan in allocation of LTE frequency, because it has been adhering to completing the WiBro (mobile WiMAX) technology.
Belatedly, Korean mobile operators, SK Telecom, KT and LG U+ were given the LTE frequency in last April. At the earliest, they can start using the frequency in the coming July. On the other hand, Sweden launched LTE commercial services in late 2008 and the U.S. and Japan did in late last year.
This makes Korea fall behind by no less than a year. The Korean mobile carriers also deserve criticism. They made little investment in new services, being heavily involved in every competition for luring customers by providing subsidies for those buying new devices.
The average proportion of marketing expenditure to investment of the three major mobile carriers increased every year, by 151.1% in 2007, by 165.5% in 2008 and 205.3% in 2009.
In the meantime, their spending on investment plunged from 3.58 trillion won ($3.2 billion) in 2007 to 3.02 trillion won in 2009.
Undue regulations on internet and game-related venture companies are triggering a 'rush to exit Korea.' The National Assembly's delay in amending the game law thwarts attempts by game companies to sell newly developed products in global markets such as Apple's App Store and Google's Android Market, prompting more exits.
Overseas social network services (SNS), in the likes of Facebook and Twitter, and foreign internet services such as G-mail parade exponential growth in Korea. According to statistics from November last year, the number of Twitter users rose 1833% from the year before, while Facebook saw a yearly expansion of 3125%.
Me2DAY, a newly emerged Korean SNS, also witnessed a 286% growth. Meanwhile, Cyworld - Korea's long-established SNS portal - had greater number of visitors but a 33.6% drop in the number of page views, compared to last year.
Only a few years ago, Korea's local portals had dominated the internet service market, making the country a 'graveyard for overseas services.' Now, Korea is becoming one of the more strategic locations feeding new growth into global IT services.
The country's lack of global hit games, such as the "Angry Bird" found in App Store or Android Market, is fueling the boom among Korean users to sign up for US-based accounts. “The global trend is marked by interlocked development between telecommunications networks, mobile equipments, and services.
In the case of Korea, however, the existence of countless regulations and lack of relevant policies are hindering the establishment of a virtuous cycle,” said a research analyst from Samsung Economic Research Institute.
“This is the biggest setback in Korea's IT industry, and the government should work together with businesses to tackle this problem,” he warned.
Office of Commercial Affairs, Royal Thai Embassy in Korea
Source : http://www.depthai.go.th