Date: February 21, 2011 Source: Hankyung Economy
Korean companies should work to increase their yuan-based trade when dealing with Chinese importers, as such a move could save them money and help expand their business in China, a local trade body said yesterday.
According to the Korea International Trade Association (KITA), a Chinese importer could save up to 2.2 million won ($2,000) in currency exchange fees for every $1 million it sends to a Korean exporter if the companies switch from dollar-based trading to yuan-based trading.
A decrease in cost or price could also prompt Chinese importers to purchase more goods from Korea, KITA noted. A Korean company would be charged an equal amount of fees when exchanging $1 million worth of Chinese yuan to the local currency as fees for trading U.S. dollars for Korean won. But it could expect to earn up to $12,325 every three months in interest should it decide to keep the Chinese yuan equivalent to $1 million in a savings account for future use, KITA said.
The three-month interest for $1 million comes to only $759. "The portion of China's yuan-based trade is expected to reach about 10 percent of the entire amount of its trade in one or two years, making yuan-based trading a must-consider option," KITA said in a press release.
In the last three months of 2010, the proportion of yuan-based trade reached 5.8 percent of the total $815.5 billion, according to KITA. "In addition, the move could allow Korean companies to engage in more aggressive marketing in China by significantly removing foreign exchange risks," it said.
- For good skin 'ingestible makeup' is fast-growing segment
Date: February 22, 2011
Source: JoongAng Daily
True beauty comes from within, or so the saying goes. The Korean cosmetics industry has begun to take the concept of inner beauty literally. "Cosmetics you can eat," or orally ingested supplements designed to beautify one's skin, are the next frontier in an industry catering to local consumers' quest for flawless skin.
Korea's cosmetics market is well-developed. It's the 12th largest in the world, worth $5.2 billion in 2009, according to the Korea Health Industry Development Institute.
And with effortlessly perfect skin reigning as the Holy Grail of local cosmetics trends for several years, many cosmetics firms, drug companies and the health food industry have bet that consumers will want to go a step beyond makeup and moisturizers by imbibing products for their skin - a bet that appears to be paying off.
Orally ingested "cosmetics" made their debut on the local scene in 2009, when CJ Nutra's "InnerB" and LG Household & Healthcare's "Skin Formula" were launched.
"Cosmetics you can eat" are supplements containing collagen, hyaluronic acid and other elements said to be good for the skin, which are absorbed into the skin through ingestion.
The cosmetics industry estimates that the market for oral skin supplements reached 60 billion won ($53.7 million) last year, and is set to more than double to 150 billion won this year.
Just three years ago, orally ingested skin supplements were a small subcategory in the product lineup of door-to-door cosmetics sales in Korea. But as the buzz about the products started to build, companies like CJ Nutra started raking in revenue from them, with more than 3 billion won in total monthly sales compared to between 200 and 300 million won in 2009.
Industry analysts see big potential in orally ingested skin supplements, a market worth more than 1.5 trillion won in Japan.
"Both knowledge and interest about beauty matters among women in their 20s and 30s have surged drastically," said Jeong Heon-woong of CJ CheilJedang's health food division. "In the future, the domestic oral skin supplements market is expected to grow to more than a trillion won's worth, similar to Japan."
To corner this burgeoning market, CJ Nutra's "InnerB" has begun an aggressive marketing campaign with pop star Seo In-young as its TV representative, and set a goal to reach 40 billion won in revenue this year, eight times last year's sales of 5 billion won.
Amore Pacific, the nation's largest cosmetics firm, also has a beauty food brand called "V=B Program" that releases a collagen supplement called "Super Collagen" last August. Collagen makes up 70 percent of the dermis or the thick middle layer of the skin, and Amore Pacific has said their product has reduced the molecular weight of its collagen compound for better absorption into the skin.
LG Household & Healthcare followed up last year's offering of "Pycnoskin," a capsule supplement containing antioxidant pycnogenol, with this year's "L'Origine Beauty Collagen."
Both Amore Pacific and LG Household & Healthcare expect to exceed 30 billion won in revenues from orally ingested skin supplements.
Pharmaceutical and health food companies have jumped on the bandwagon. Korea Ginseng Corp., well-known for their Cheong Kwan Jang brand of red ginseng, has launched "Beauty Balance" that combines red ginseng with hyaluronic acid.
Vitamin supplements such as Ildong Pharmaceutical's "Aronamin Gold" have produced spin-offs for skin improvement such as "Aronamin C-plus."
Date: February 23, 2011
Source: Hankyung Economy
As the cost of fresh produce continues to climb, the prices of widely consumed seafood such as squid, mackerel, yellow corvina and hairtail have all risen by up to nearly 50 percent, putting a further strain on citizens' pocketbooks.
Experts point to a domino effect from a shrunken meat supply due to foot-and-mouth disease driving up demand for seafood, plus unusually low temperatures in both the East and South seas, diminishing the amount of fish caught.
According to the Korea Agro-Fisheries Trade Corp. (aT) yesterday, each squid currently costs 2,898 won ($2.57) at the retail level, up 48.7 percent from 1,949 won a year ago.
At Shinsegae E-Mart, the nation's largest discount store chain, the price of a single squid was also 15.5 percent higher than last year, at 2,980 won. The price of mackerel also jumped 41.9 percent from a year ago to 4,380 won per fish yesterday. This was caused by a 30 percent drop in the amount of domestic mackerel catch, with the amount of large mackerel weighing more than 400 grams falling by over 80 percent compared to previous years.
Likewise, the price of yellow corvina has more than doubled in cost over a year ago, reaching 2,280 won at E-Mart. The price of hairtail has climbed for three years in a row, with one box containing 33 hairtails going for about 120,000 won at local fisheries.
Weather conditions have played a major role in the reduced seafood harvest. "[Seafood] shipments have fallen due to low sea temperatures all through the winter, and the number of fishing days was also cut down because of the freezing weather," said Han Seon-ku, a seafood buyer at GS Retail. "On the other hand, consumers' demand for seafood is on the rise, drastically driving up fish prices on the whole," Han added.
Date: February 25, 2010
Source: Mail Business Newspaper
Food inflation is now even affecting traditional annual ceremonies to honor ancestors, which normally include the offering of fruit, rice, beef soup and fish.
Yoon Suk-young, 76, said that she had to replace some of the food selections on the ancestral rites table during the recent Lunar New Year because some items were too expensive. "I had to replace dried pollack with squid because of the high prices," said Yoon.
The rise in food prices, partly caused by the outbreak of foot-and-mouth disease, caused consumer confidence this month to slump to its lowest level since May 2009, the central bank said yesterday.
The consumer sentiment index - which measures attitudes on the economic outlook, living conditions and future spending - stood at 105 for February, down from 108 in January.
A reading above the benchmark 100 means optimists outnumber pessimists. The index, widely used to gauge the future direction of private spending, has stayed above the 100-point level since May 2009.
The survey, based on a poll of 2,071 households in 56 major cities, was conducted from Feb. 11-18. The Bank of Korea said that consumer sentiment had weakened due to inflation and rising rental housing prices. Consumer prices rose to 4.1 percent in January, exceeding the BOK's inflation target of 3 percent.
Economists said that inflation was the biggest factor hurting consumer confidence. They point to the influence of so-called "agflation," referring to price rises for food commodities, and "fishflation" for seafood products.
Analysts say that agflation has already made an appearance in Korea and fishflation is likely to follow as more consumers buy fish products due to a shortage of meat caused by the outbreak of foot-andmouth disease that has led to the slaughter of cattle and pigs.
Won Sang-pil, an analyst at TongYang Securities, said the wholesale prices for Koreans' favorite fish items, including pollack, cutlass fish and squid, have risen sharply, with the retail price of some of these having doubled in the past year.
BOK Governor Kim Choong-soo recently predicted that consumer price inflation could remain around 4 percent because of rising prices for oil and agricultural produce. Because of the inflationary pressure, analysts expect that the central bank will raise the key interest rate from the current 2.75 percent to 3.5 percent or 4 percent by the end of the year.
Date: February 26, 2011
Source: JoongAng Daily
Analysts say the wave of large-scale withdrawals from savings banks has subsided, but the suspensions of eight savings banks will leave the industry conspicuously altered. "The state of continued withdrawals from the sector following the suspension of some savings banks has completely stabilized," said Joo Yong-sik, chairman of the Federation of Savings Banks.
The eight savings banks that have been suspended had total assets of 12.6 trillion won ($11.14 billion) as of the end of last year, or 15 percent of the entire sector's assets, which are valued at 86.9 trillion won. Industry rankings have changed as a result since Busan Mutual Savings Bank and its four affiliates that were suspended previously was the leader in the savings bank sector with a 11 percent market share.
Korea Savings Bank and its three affiliates is now the leader with a 10 percent market share, followed by the Solomon, Tomato and Hyundai Swiss Mutual Savings Bank groups. Financial authorities believe a round of merger and acquisition activity among the beleaguered savings banks will be the next step. "The first stage in the structural normalization of the savings banks has been wrapped up," said FSC Chairman Kim Seok-dong on Wednesday.
"Now the second stage must begin [...] and early normalization will depend on how much the saving banks that have been suspended strive to either solve their problems on their owo or engage in M&A efforts." Top candidates that could acquire savings banks include the nation's four major commercial financial groups. Hana Financial Group has already agreed to buy Samhwa Mutual Savings Bank, the first savings bank to be suspended in January.
Private lenders such as A&P Financial and financial institutions, including Kyobo Life Insurance and Hyundai Card & Capital, have also been mentioned as possible buyers of the troubled savings banks. "In particular, a savings bank acquired by a major financial holding company has a chance to become a top-ranking firm by expanding its market base through the mother company's strong financial assets, talent pool and network of operations," said an FSB official.
Most of all, observers say that the survival of the savings banks will hinge on finding new sources of profits to replace lending to the sluggish construction industry. "Savings banks have become the troubled middle child between commercial banks and private lenders," said a representative of a Seoulbased savings bank. "Being allowed to sell mutual funds or operate foreign exchange trading is unthinkable, and it will be difficult for [savings banks] to find a new niche in which to operate."
Date: February 26, 2011
Source: DongA Ilbo
As the Libyan political unrest spirals into a civil war, concerns over another oil crisis are widely spreading out across South Korea.
Like the first and second oil crises in the 1970s and 80s, deep worries run over an enormous oil crisis that might hit the global economy, including the Korean economy.
There are many similarities between present situations in the Middle East and the past oil price shocks which began from political uncertainties, leading to problems in producing and exporting crude oil, to soars in the international oil price and then to global inflation and economic slowdown.
Political uncertainties are apparently escalating in the course of time, spreading beyond Libya to Yemen, Sudan, Algeria, Iran and Bahrain. The international oil price is already drawing a steep curve from the time political crises erupted in Egypt and Tunisia. The price of Brent crude oil futures has skyrocketed up to $108 a barrel due to the Libyan crisis as of February 23rd.
Experts say that the current Middle East situation bears political problems as serious as the first two oil crises of the past.
If Iran, Libya and Algeria face problems in exporting crude oil, where massive protests are going on, the very fact itself will deal a significant blow to the international crude oil market, the experts explain.
An even more worrisome scenario is that the civil war extends to major oil-producing countries such as Saudi Arabia and Iraq. The two countries account for 9.53% and 2,93%, respectively, of the total global oil production.
However, most critics believe that oil shocks are not an imminent threat for two reasons. First of all, the countries under political turmoil cover a relatively small share of global output. Libya is responsible for only 1.9% of global output for crude oil. Egypt and Tunisia, which had also suffered through mass anti-government protests, take up only 0.7% and 0.1% share each in the world's oil production. Likewise, Yemen (0.4%), Sudan (0.6%), and Bahrain (0.1%) all cover less than 1% of global oil output.
Secondly, any possible negative outcome in these countries can easily be offset by the Organization of Petroleum Exporting Countries (OPEC). OPEC's current excess capacity is 5.7 million barrels per day, which is more than enough to fill in for Libya's shock-induced hold-up (1.6 million barrels). Moreover, OPEC has been hinting at a possible increase in output as of late, in efforts to help stabilize prices.
Key oil-producing nations met in Riyadh on Tuesday (local time) to discuss the effects of the Libyan crisis. "OPEC is ready to meet any shortage in supply when it happens," Saudi Oil Minister Ali Al Naimi told the New York Times after the meeting. Saudi Arabia's excess capacity is reported to be 4.0 million barrels per day, which means it can pick up on Libya's slack all alone without the help of other OPEC members.
"We should not eliminate the possibility of a drastic hike in oil prices. However, there will be no big setbacks in terms of total global production," said a government official. "Rather, the courses taken by oil giants - such as Saudi Arabia, Iraq, Iran, and Algeria - will have the highest bearing on future prices."
Office of Commercial Affairs, Royal Thai Embassy in Korea
Source : http://www.depthai.go.th