Date: January 24, 2011
Source: Mail Business News
The South Korean government is set to carry out a major revision of the Consumer Price Index (CPI) for the first time in five years.
The proportion of expenditures on education, medication and transportation will be expanded in the nation’s CPI, since they are taking increasingly larger chunks of household spending.
On the other hand, liquors, cigarettes, apparels, shoes and food expenses will be decreased in the proportion.
According to the Ministry of Strategy and Finance (MOSF) and Statistic Korea on Friday, the five-year-old CPI does not reflect what consumers feel about actual prices, widening gaps further between each index figure and actual consumer prices.
Therefore, they decided to make adjustments to weights given to each item on the index starting from December 31st.
Statistics Korea announced that as soon as a survey on trends in household spending last year is released in February it will reflect the result into revision of the CPI.
It is expected that inflation authorities will tighten control on the rising household spending on education, medication and transportation.
According to the household spending trend survey in 2009, expenses on education amounted to 13.5%, but its proportion accounted for a mere 11% of the current CPI.
Transportation and medication expenses claimed 12.3% and 6.6% of the total household spending, but their proportions in the CPI stood at only 10.9% and 5.1%, respectively.
The revision of the CPI will not include items whose weights are small in the total household spending, because price surges in those items do not affect the overall CPI. It is highly likely that among 37 items that account for 0.01% of the CPI, video and other devices that are not frequently used due to technological innovation and fast-changing trends will be excluded.
Weighting will be recalculated in July and applied to the CPI within the second half of the year.
Date: January 24, 2011
Source: JoongAng Daily Newspaper
Sales of Lunar New Year gift sets being sold at department stores, mega supermarkets and home shopping channels in South Korea, are taking a sharp upward curve this year compared to last year.
Department stores are particularly enjoying soaring demand for Lunar New Year gift sets. Sales of gift sets offered by department stores surged by 40 to 80% these days compared to the same period last year.
Analysts say that department stores are achieving high sales even in the midst of runaway prices, because consumer sentiment is indeed recovering as domestic businesses announce high profits one after another.
More and more consumers are now willing to loosen their purse strings as many companies grant incentives for their employees. “Consumers find themselves being able to spend money during the bonus season combined with the high-flying stock market,” Baek In-soo, Chairman of Lotte Department Store’s Retail Strategy Research Center said.
Lotte Department Store achieved an 83% growth in sales of its Lunar New Year gift sets that went on sale from January 17th through 20th compared to the same period last year. Sales of Hyundai Department Store and Shinsegae Department Store also increased by 76.8% and 40.2%, respectively, during the same period.
Not only department stores, but also mega discount stores and television home shopping channels are seeing growth in sales of gift sets for the Lunar New Year. E-Mart that received reservations for Lunar New Year gift sets staring from January 3rd through 16th witnessed a 150% increase in sales compared to those obtained during the last Chuseok holiday season.
Lotte Mart, which sold gifts from January 7th through 19th, reported a whopping 400% growth in sales compared to last year. Parcel delivery companies are also benefiting from such high demand as the Lunar New Year holiday is approaching.
Korea Express, a major delivery firm, predicts that delivery orders will increase by 20% this year compared to the last Lunar New Year season.
Date: January 27, 2011
Source: JoongAng Daily Newspaper
The Wall Street Journal (WSJ) reported on Thursday (local time) that the free trade agreement deal between South Korea and US (KORUS FTA), which had wrapped up limited revisions last December, will be brought in front of Congress for ratification by March, at earliest. “Congressional debate on the proposed South Korea free trade deal could begin as soon as March, now that the final, legal language of the agreement is set,” the WSJ cited an official.
“The agreement, which includes supplemental legal language on auto tariffs, will be released to the public next month.
President Barack Obama is expected to send the pact to Congress for ratification soon afterward,” reported WSJ.
The US Congress will be appraising the merits and drawbacks of the revised version, while also sketching a rough ratification schedule in relation to other pending agreements with Columbia and Panama.
The White House puts more weight on the KORUS FTA, but some leading members of the Republican Party are pushing for signing the deal first with smaller and less influential countries like Columbia.
This discord is expected to hamper the ratification process by creating different camps based on the timing and order of ratifications. Meanwhile, the US government hopes the KORUS FTA is ratified before July 1st, the date when the Korea-EU FTA comes into effect, to avoid losing out to European rivals in the Korean market.
Date: January 28, 2011
Source: Yonhap News
Meat prices in South Korea are now spiraling out of control.
After the foot and mouth disease (FMD) hit the nation, meat prices are skyrocketing, triggering a severe shortage of meat supply to Korean customers ahead of the Lunar New Year holidays.
The price of poultry products are also surging due to cold weather and persistent avian flu.
The average wholesale price of pork meat jumped to a record 8,000 won ($7.17) per kilogram as of January 25, just a week after it broke above the 7,000 mark.
Retail prices showed a sharper rise especially in cuts of pork hind leg. E-Mart, the nation’s leading retailer, gave up its designation of pork belly as an all-time low price item and raised the price tag to 1,680 won per 100 grams from 1,380 won in five days.
Chicken meat, eggs and duck also show an inexorable rise in prices. Chicken meat prices are 37% higher than a month earlier. Egg prices gained 12.8% from a month ago and 31.4% from a year ago. Duck meat rose 12.5% over the last 30 days when the avian flu peaked.
Date: January 28, 2010
Source: JoongAng Daily
Korea’s presidential committee plans to submit legislation on carbon-emissions trading to parliament next month despite opposition from business groups.
The bill will have flexibility on the timing of its introduction and the quota for free permits, according to a report from the Committee on Green Growth to President Lee Myung-bak.
Korea, Asia’s fourth-biggest polluter, said in November it aims to adopt a carbon-emissions trading system in 2013 to reduce greenhouse gas emissions and fight global warming.
Under the initial plan, the nation will give away more than 90 percent of carbon permits in the first three years. “We will fully reflect opinions of industries in adopting a carbon-emission trading system,” said the committee.
Business groups, including the Federation of Korean Industries, have requested that the government delay the adoption of carbon-emissions trading as the system will increase costs and make domestic companies less competitive than rivals from Japan and China, which don’t have the program.
The emission-trading system would cost companies 14 trillion won ($13 billion) a year if the permits are put up for bidding, according to Korea Energy Management.
The government also announced on Sept. 28 that companies with factories producing at least 25,000 metric tons of carbon dioxide a year must set energy-saving and greenhouse gas-reduction targets by September 2011.
They will face fines of as much as 10 million won if the targets aren’t met. Korea said in 2009 that it would voluntarily reduce carbon emissions by 30 percent from the expected 2020 level, or 4 percent below its emissions in 2005.
Korea may become the second nation to start emissions trading in Asia, after New Zealand, if parliament approves.
Date: January 31, 2011
Source: Yonhap News
Korea’s imports of beef and pork have jumped this month amid a massive slaughter of cattle and pigs caused by the spreading foot-and-mouth disease (FMD), the Korea Customs Service said yesterday.
Korea imported 24,513 tons of beef during the first 21 days of this month, up 22.7 percent from the same period a month earlier.
Pork imports also jumped 31.1 percent to 26,625 tons. Prices of per-kilogram beef and pork also jumped 25.1 percent and 16.7 percent this month compared with the same period a year ago.
Korea has culled around 2.6 million livestock since the outbreak of the highly contagious disease in late November.
The disease has spread almost across the entire nation now despite the government’s stepped-up quarantine efforts.
Prices of pork and other meats soared in the domestic market, making it more expensive for people to prepare meals for family gatherings during the Lunar New Year holiday early next week.
As part of stabilizing meat prices, the finance ministry said Tuesday that it will cut import tariffs on 60,000 tons of pork from the current 25 percent to zero until the end of June.
Pork is cheaper than beef and popular especially among working-class people.
The move is in line with ongoing government anti-inflation efforts, and is also aimed at easing price hikes, amid worries that demand for the meat is expected to spike ahead of the upcoming holiday.
In an earlier meeting to discuss anti-inflation measures, Vice Finance Minister Yim Jong-yong said that the government will take “every possible measure” to stabilize soaring pork prices as part of efforts to ease the suffering of working-class people.
“We take the supply shortage of pork caused by the FMD seriously,” Yim said at the meeting with other policymakers.
“We will respond actively [with market situations] by pursuing every possible measure, including expanding the tariff quota [on pork].” He added that the government will work hard to stabilize prices of key agricultural and fishery goods.
Office of Commercial Affairs, Royal Thai Embassy in Korea
Source : http://www.depthai.go.th