Required Report - public distribution

**Date:** 9/1/2004

**GAIN Report Number:** KS4047

KS4047

**Korea, Republic of**

**Poultry and Products**

**Annual**

**2004**

**Approved by:**

![](media/image1.wmf)Larry M. Senger

U.S. Embassy

**Prepared by:**

Stan Phillips // Seung Ah Chung

**Report Highlights:**

Korea remains one of the few countries that maintain a nationwide ban on
imports of U.S. fresh and frozen poultry meat due to avian
influenza-related concerns. Korea is considering lifting the ban on U.S.
poultry meat now that the United States is free of highly pathogenic
avian influenza. Although Brazil may soon be eligible to export limited
quantities of poultry meat to Korea, bans on other suppliers will
encourage importers to turn to the United States when the ban is lifted.

Includes PSD Changes: Yes

Includes Trade Matrix: Yes

Annual Report

Seoul \[KS1\]

\[KS\]

Table of Contents

[I. Situation and Outlook 3](#i.-situation-and-outlook)

[Local Situation 3](#local-situation)

[Exports 4](#exports)

[Imports and Competitors 4](#imports-and-competitors)

[Distribution 5](#distribution)

[Sanitary and Phytosanitary Issues
6](#sanitary-and-phytosanitary-issues)

[II. PS&D for Broilers 7](#ii.-psd-for-broilers)

[III. Production and Consumption Tables
8](#iii.-production-and-consumption-tables)

[Korea: Broiler Inventories 1/ 8](#korea-broiler-inventories-1)

[Korea: Broiler Productivity 1/ 8](#korea-broiler-productivity-1)

[Korea: Production Costs of Broilers 1/
9](#korea-production-costs-of-broilers-1)

[Korea: Production Cost of Broilers
9](#korea-production-cost-of-broilers)

[Korea: Per Capita Consumption of Livestock Products
10](#korea-per-capita-consumption-of-livestock-products)

[IV. Price Tables 11](#iv.-price-tables)

[Korea: Year Average Broiler Prices
11](#korea-year-average-broiler-prices)

[Korea: Farm Price for Chicken Meat
11](#korea-farm-price-for-chicken-meat)

[Korea: Wholesale Price for Chicken Meat
12](#korea-wholesale-price-for-chicken-meat)

[Korea: Consumer Price for Chicken Meat
13](#korea-consumer-price-for-chicken-meat)

[Korea: Price Comparison 13](#korea-price-comparison)

[Korea: Monthly Average Foreign Exchange Rate
14](#korea-monthly-average-foreign-exchange-rate)

[V. Trade Matrix 15](#v.-trade-matrix)

[Korea: Import Matrix for Chicken Meat 1/
15](#korea-import-matrix-for-chicken-meat-1)

# I. Situation and Outlook

# 

## Local Situation

## 

In 2005, broiler production is expected to increase compared to the 2004
level. Farm gate prices of broilers in 2004 reached record highs
encouraging more broiler production in 2005. However, high production
costs caused by a 20 percent increase in 2004 feed prices and higher
chick prices will limit the expansion in broiler product.

The Korean poultry industry was rocked by an outbreak of Highly
Pathogenic Avian Influenza (HPAI) in the first quarter of 2004.
Approximately 4 million birds, mostly layers and ducks, were
depopulated. In response to the HPAI outbreak, consumers avoided
consumption of chicken meat resulting in plummeting market prices for
chicken. Prices eventually fell roughly 40 percent prompting strong
pleas from the domestic poultry industry for government assistance.
Through an effective promotion and educational campaign conducted
jointly by the Korea government and the poultry industry, consumer
confidence in chicken meat consumption was restored. Like Korea, major
poultry meat exporting countries including the United States, Thailand,
and China also had HPAI outbreaks. As a result, an import ban on
non-heat treated poultry products from those countries has been imposed
and is still in effect as of September 1, 2004.

On July 29, 204, the Ministry of Agriculture & Forestry (MAF) announced
a plan to improve the sanitary condition and safety of livestock
products. This plan is in response to a growing concern about meat
safety among the public. The intent is to ensure the safety of the
entire livestock production and supply chain from farm to table.
Measures to be applied to the poultry industry include 1) extension of
HACCP from the farm through retail points, 2) reduction of the number of
animal drugs that are allowed in feed and increase of penalties for
violation of maximum residues of animal drugs, and 3) mandatory
requirements for packaging of poultry meat. Currently, slaughter plants,
beginning July 1, 2003, are required to comply with the mandatory HACCP.
All feed plants will be subject to mandatory HACCP from 2007 and a pilot
program for HACCP in broiler farms will be initiated in 2010.

In order to prevent microorganism contamination, all poultry meat to be
sold at slaughter and processing plants, meat retail shops, etc. shall
be in a package with the name of the slaughter or processing plant
indicated in the package. The packaging requirement will be mandatory
for large-scale slaughter plants (plants whose daily slaughter numbers
exceed 80,000 birds) from 2007. Small-scale slaughter plants, processing
plants, and meat sales shops will be required to comply with the new
packaging rules from 2008. The sanitary surveillance program for all
livestock products will be tightened under MAF plans to increase the
number of monitoring samples from 100,000 to 120,000 annually. Details
about each measure and how to achieve goals will be prepared shortly.

After a BSE case was detected in the United States and HPAI was detected
in Korea, consumers turned from beef and chicken to pork and fish.
Consumer education and extensive promotion efforts made by the Korean
government and poultry associations allayed consumer concerns and
enticed consumers to consume chicken again. However, sluggish economic
conditions dampened demand for chicken meat. To date, consumers do not
appear to differentiate between domestic and imported chicken meat with
respect to HPAI concerns.

## Exports

Korean exports of chicken meat except for heat-treated products have
been blocked since the outbreak of HPAI in December 2003. The last
outbreak was reported in March 2004 and Korea completed depopulation of
affected birds from the last outbreak on March 21, 2004. Following OIE
regulations, Korea can declare itself free of HPAI and regain the
HPAI-free country status six months after eradication of the last
outbreak which will be on September 21, 2004 if there is no further
outbreak of HPAI. In the meantime, Korea is currently seeking a way to
resume its chicken meat exports to Japan. Since Japan allows imports of
poultry meat from HPAI-outbreak countries three months after the last
outbreak, Korea will work with the Japanese government to resume chicken
meat exports as soon as possible.

The total export volume is not significant (around 1,900 MT in 2003 and
252 MT until June 2004). However, the government and the Korea Chicken
Council have high hopes that Korean chicken meat may replace exports
from China and Thailand in Japan and other Asian countries while their
exports are blocked due to the outbreak of HPAI.

## Imports and Competitors

2005 poultry imports will depend on whether Korea continues to impose
the import ban on major exporting countries. Based upon the latest HPAI
outbreak situations in Asian countries, the United States would be the
first country allowed to resume exports. If this happens in the latter
part of 2004 or early part of 2005, the United States will regain the
top supplier position in the poultry import market as no other country
can compete with the United States in terms of quality and prices. Even
under the scenario that Brazil will join the Korean poultry meat import
market before 2005, the United States is expected to retain the leading
position as Brazilian imports will be limited to a couple of designated
poultry plants only. Imported chicken cuts will continue to be
competitive with domestic chicken cuts reflecting the higher domestic
production cost. Price comparison and production cost tables are
included in this report for additional detail.

The Korean economic situation in 2005 will be an underlying factor
determining total Korea poultry meat imports. Assuming the Korean
economy hit the bottom in 2004, it is expected that consumers will
increase spending on foods (especially restaurant consumption) and, in
turn, this will lead to a recovery in poultry imports to the level prior
to the outbreak of HPAI. Since imported chicken meat is widely used at
restaurants, fast food chains, and western franchise restaurants, a
positive economic outlook will spur import demand.

In 2004, the total volume of imports is expected to decrease to 30,000
MT from 89,000 MT assuming that the import ban imposed on major
exporting countries including the United States is not lifted. Poultry
imports from Thailand, the biggest supplier of chicken meat to Korea in
2003, were banned on January 23, 2004 and Chinese poultry exports were
banned on January 27, 2004 because of HPAI outbreaks. Bans were imposed
on all poultry products including heat-treated chicken products at
first. After revision of health requirements for importation of
heat-treated poultry products and designation of poultry plants eligible
to export to Korea, Thailand and China were allowed to ship heat-treated
poultry products to Korea from July 2004. It is known that around 10
plants are designated for Korean exports in Thailand and China.

Poultry products that have not been heat-treated will remain banned from
Thailand and China until outbreaks of HPAI cease. It is expected that
resumption of non-heated poultry product imports from Thailand and China
is unlikely to be realized until the first half of 2005. Owing to
reports on continuing outbreaks of HPAI in Thailand and China, Korean
poultry farmers and industry associations requested rigorous inspection
of heat-treated products imported from those countries. In response, the
Korean quarantine authorities are conducting 100 percent testing of all
shipments for Avian Influenza. Samples are taken not only from products
but also from containers, boxes and product packages. Testing usually
takes one month to complete. With extended inspection and high prices of
heat-treated products from both countries, traders are looking forward
to importing U.S. frozen poultry meat when the import ban is lifted.

With Thailand, China, and the United States out of the market, Korean
importers switched to European poultry meat suppliers. Denmark, France,
and the United Kingdom have been the primary suppliers with total
imports from all European countries reaching 7,600 metric tons as of
early August. However, traders criticize the irregular quality and high
prices of poultry meat from Europe.

On August 4, 2004, MAF announced health requirements for importation of
poultry meat from Brazil. The new requirements mandate that MAF will
visit poultry meat plants in Brazil and designate plants allowed to
export poultry meat to Korea. After Brazilian plants have been
designated, the Korean government and the Brazilian government will
discuss details about the health certificate. Once both governments
agree on the health certificate, Brazil can begin supplying the Korean
market with their poultry meat. According to traders, two or three
Brazilian plants will be designated for Korean exports and actual
exports will begin in October or November 2004 at the earliest.

Despite new competition from Brazil, traders see U.S. chicken meat as
the preferred option when imports are resumed. They anticipate that
Brazilian chicken meat will replace chicken meat imports from Thailand
and China as both countries will not return to the Korean market for at
least six months due to continued sporadic outbreaks of HPAI. Thailand
and China supplied well-trimmed boneless meat products similar to
Brazilian product, while U.S. chicken meat is sold as bone-in leg and
wing parts. Therefore, the impact of Brazilian chicken meat imports into
Korea is not expected to be significant.

Countries that are currently allowed to export to Korea are as follows:

  ----------------------------------- -----------------------------------
  Items                               Approved Poultry Meat Suppliers

  Poultry birds, hatching eggs, day   United Kingdom, Denmark, France,
  old chicks                          Australia, New Zealand, and Taiwan

  Fresh, chilled, or frozen poultry   Denmark, United Kingdom, Taiwan,
  meat                                France, and Australia

  Heat-treated poultry meat           Denmark, United Kingdom, Taiwan,
                                      France, Australia, Thailand, China,
                                      and United States
  ----------------------------------- -----------------------------------

## Distribution

All imported chicken meat is frozen meat (predominantly leg and wing
parts). Korea consumes imported chicken cuts in the food service sector
(e.g. seasoned chicken dishes, chicken nuggets, patties, etc.) and in
the processed food sector producing further processed products for
retail distribution. Domestic chicken is usually marketed as chilled
whole birds and cuts for the food service sectors (e.g. fried chicken)
and retail markets for home use. Chicken meat derived from layers is
mostly used as a raw ingredient in further processed products such as
sausages, hams, etc. According to the poultry association, 20 million
layers are used for further processed products annually. The domestic
chicken industry also uses imported chicken cuts for further processed
products taking advantage of the lower prices for imported product and
constant supply compared to domestic cuts.

## Sanitary and Phytosanitary Issues

####### Export Health Certification

Korea suspended import inspection of U.S. poultry and poultry products,
except for Specific Pathogen Free (SPF) hatching eggs and heat-treated
products, on February 7, 2004 in response to the report of an Avian
Influenza (AI) outbreak in Delaware. The suspension placed on import
inspection of U.S. poultry products was shifted to a ban on February 24,
2004 after confirmation that an outbreak of Highly Pathogenic Avian
Influenza (HPAI) had occurred in Texas.

Since the outbreak of HPAI in the United States, exports of heat-treated
poultry products and products containing eggs as ingredients must comply
with heat treatment requirements established by the Korean government.
Heat treatment requirements are as follows:

\(1\) Heat treatment for poultry products:

70° C (158° F) for a minimum of 30 minutes; or, 75° C (167° F) for a
minimum of 5 minutes; or, 80° C (176° F) for a minimum of 1 minute or
equivalent treatment.

\(2\) Heat treatment for products containing eggs, including dairy
products such as ice cream:

55° C (131° F) for a minimum of 15 minute, 60° C (140° F) for a minimum
of 5 minutes; or 64° C (147° F) for a minimum of 4.5 minutes; or
equivalent treatment.

\(3\) A heat treatment statement shall be provided on a form of the
certificate issued by the U.S. government agency, including FSIS, APHIS,
etc.

On August 19, USDA notified the World Organization for Animal Health
(OIE) that the United States was free of HPAI according to the
definition of OIE's Terrestrial Animal Health Code. Accordingly, USDA
has requested that the ban on U.S. fresh and frozen poultry meat exports
to Korea be lifted.

Current information on which U.S. poultry products are eligible for
export to the Korean market can be found on the website of the USDA,
FSIS at
<http://www.fsis.usda.gov/Frame/FrameRedirect.asp?main=http://www.fsis.usda.gov/OFO/export/KOREASO.htm>).
This website also provides guidance in what documents need to accompany
poultry product shipments destined for Korea.

####### Exotic Newcastle Disease

In addition to avian influenza outbreaks, the United States suffered
outbreaks of Exotic Newcastle Disease (END) in 2002 and 2003, which
resulted in import restrictions on certain regions of the United States.
To date, however, all import restrictions imposed due to END outbreaks
have been lifted.

*[Useful websites for Korean statistical information]{.underline}:*

For animal statistics, [www.maf.go.kr]{.underline}

For price information, [www.nacf.co.kr]{.underline}

For production forecast, [www.krei.or.kr]{.underline}

For production cost, [www.naqs.go.kr](http://www.naqs.go.kr/)

For broiler market situation,
[www.chicken.or.kr](http://www.chicken.or.kr/)

# II. PS&D for Broilers

![](media/image2.wmf) \* Imports forecasts for 2004 and 2005 do not
reflect any assumptions about changes to the current import ban
situation. PS&D tables will be adjusted accordingly when the import ban
situation is changed.

# III. Production and Consumption Tables

## Korea: Broiler Inventories 1/ 

(Unit: 1,000 birds)

  ------------------------- ------------- --------------------------------
  Year                      Farms         Birds

  1990                      3,589         26,719

  1995                      3,601         43,412

  2000                      2,859         59,910

  2001                      3,016         66,742

  2002                      3,126         72,193

  2003                      2,226         66,756

  2004                      2,237         68,526
  ------------------------- ------------- --------------------------------

1/ June Inventories

Source: National Agriculture Quality Service, Ministry of Agriculture &
Forestry

## Korea: Broiler Productivity 1/

+---------------+-------------+-----------------+---------------------+
| Year          | Daily Gain  | Feeding Days    | Average Weight      |
|               |             |                 |                     |
|               |             |                 | (Kilogram)          |
+---------------+-------------+-----------------+---------------------+
| 1985          | 33.3        | 55.5            | N/A                 |
+---------------+-------------+-----------------+---------------------+
| 1990          | 38.0        | 48.2            | N/A                 |
+---------------+-------------+-----------------+---------------------+
| 1995          | 38.4        | 44.3            | N/A                 |
+---------------+-------------+-----------------+---------------------+
| 2000          | 39.4        | 38.8            | 1.53                |
+---------------+-------------+-----------------+---------------------+
| 2001          | 40.5        | 36.8            | 1.49                |
+---------------+-------------+-----------------+---------------------+
| 2002          | 39.4        | 38.8            | 1.55                |
+---------------+-------------+-----------------+---------------------+
| 2003          | 38.30       | 36.97           | 1.40                |
+---------------+-------------+-----------------+---------------------+

Source: National Agriculture Quality Service, Ministry of Agriculture &
Forestry

## Korea: Production Costs of Broilers 1/

(Korean Won per Kilogram in Live Weight)

  ----------------- ----------------- ------------------ ----------------
  Year              Operating Cost    Production Cost    Farm Price

  1980              741               829                834

  1985              831               907                961

  1990              850               968                1,018

  1995              919               1,046              1,242

  2000              890               959                1,187

  2001              988               1,052              1,397

  2002              951               1,010              1,155

  2003              943               1,003              938
  ----------------- ----------------- ------------------ ----------------

Source: National Agriculture Quality Service, Ministry of Agriculture &
Forestry

## Korea: Production Cost of Broilers

(Korean Won per Kilogram in Live Weight)

  -------------- -------------- --------------- ------------- -------------
  Item           CY 2002                        CY 2003       

                 Average Cost   Component Ratio Average Cost  Component
                                                              Ratio

  Feed           510            50              551           55

  Chicks         275            27              195           19

  Family Labor   49             5               49            5

  Vet & Medicine 34             3               36            4

  Water, Power,  38             4               39            4
  etc.                                                        

  Other          109            11              135           13

  Total          1,015          100             1,005         100

  By Product     5              \-              2             \-

  Cost Total     1,010          \-              1,003         \-
  -------------- -------------- --------------- ------------- -------------

Source: National Agriculture Quality Service, Ministry of Agriculture &
Forestry

## Korea: Per Capita Consumption of Livestock Products

(Unit: Kilogram, boneless basis)

  ------------ ----------- ----------- ----------- ----------- -----------
  Year         Total Meat  Beef        Pork        Chicken     Egg

  1995         27.5        6.7         14.8        6.0         10.1

  1997         29.3        7.9         15.3        6.1         10.4

  1999         30.5        8.4         16.1        6.0         9.9

  2000         31.9        8.5         16.5        6.9         10.3

  2001         32.2        8.1         16.8        7.3         11.1

  2002         33.5        8.5         17.0        8.0         11.3

  2003         33.4        8.1         17.4        7.9         10.5
  ------------ ----------- ----------- ----------- ----------- -----------

Source: Ministry of Agriculture & Forestry

# IV. Price Tables

## Korea: Year Average Broiler Prices

(Korean Won/Kg, boneless basis)

  ------------------- -------------- ------------- ----------- -----------
  Year                2001           2002          2003        2004 1/

  Farm Price          1,397          1,155         938         1,324

  Wholesale Price     2,528          2,149         1,850       2,386

  Consumer Price      3,220          2,705         2,490       2,924
  ------------------- -------------- ------------- ----------- -----------

1/ Average price, January through July 20043

Source: National Agricultural Cooperative Federation and Agricultural &
Fishery Marketing Corporation

## Korea: Farm Price for Chicken Meat

+-------------+-------------+-------------+--------------+------------+
| Commodity   | Chicken     |             |              |            |
|             | Meat, Farm  |             |              |            |
|             | Price       |             |              |            |
|             |             |             |              |            |
|             | Unit:       |             |              |            |
|             | Korean Won  |             |              |            |
|             | per         |             |              |            |
|             | Kilogram    |             |              |            |
+-------------+-------------+-------------+--------------+------------+
| Year        | 2002        | 2003        | 2004         | \% Change  |
|             |             |             |              | comparing  |
|             |             |             |              | to         |
|             |             |             |              | previous   |
|             |             |             |              | year       |
+-------------+-------------+-------------+--------------+------------+
| Month       |             |             |              |            |
+-------------+-------------+-------------+--------------+------------+
| Jan.        | 1,534       | 999         | 659          | -34        |
+-------------+-------------+-------------+--------------+------------+
| Feb.        | 1,331       | 742         | 1,029        | 38         |
+-------------+-------------+-------------+--------------+------------+
| Mar.        | 1,610       | 1,172       | 1,704        | 45         |
+-------------+-------------+-------------+--------------+------------+
| Apr.        | 1,511       | 938         | 1,608        | 71         |
+-------------+-------------+-------------+--------------+------------+
| May         | 1,371       | 930         | 1,432        | 53         |
+-------------+-------------+-------------+--------------+------------+
| Jun.        | 993         | 693         | 1,286        | 85         |
+-------------+-------------+-------------+--------------+------------+
| Jul.        | 946         | 753         | 1,548        | 105        |
+-------------+-------------+-------------+--------------+------------+
| Aug.        | 812         | 1,246       |              |            |
+-------------+-------------+-------------+--------------+------------+
| Sep.        | 768         | 1,042       |              |            |
+-------------+-------------+-------------+--------------+------------+
| Oct.        | 941         | 973         |              |            |
+-------------+-------------+-------------+--------------+------------+
| Nov.        | 997         | 938         |              |            |
+-------------+-------------+-------------+--------------+------------+
| Dec.        | 976         | 833         |              |            |
+-------------+-------------+-------------+--------------+------------+

Source: National Agricultural Cooperative Federation

## Korea: Wholesale Price for Chicken Meat

+-------------+-------------+-------------+--------------+------------+
| Commodity   | Chicken     |             |              |            |
|             | Meat,       |             |              |            |
|             | Wholesale   |             |              |            |
|             | Price       |             |              |            |
|             |             |             |              |            |
|             | Unit:       |             |              |            |
|             | Korean Won  |             |              |            |
|             | per         |             |              |            |
|             | Kilogram    |             |              |            |
+-------------+-------------+-------------+--------------+------------+
| Year        | 2002        | 2003        | 2004         | \% Change  |
|             |             |             |              | comparing  |
|             |             |             |              | to         |
|             |             |             |              | previous   |
|             |             |             |              | year       |
+-------------+-------------+-------------+--------------+------------+
| Month       |             |             |              |            |
+-------------+-------------+-------------+--------------+------------+
| Jan.        | 2,726       | 1,930       | 1,444        | -25        |
+-------------+-------------+-------------+--------------+------------+
| Feb.        | 2,416       | 1,532       | 1,988        | 29         |
+-------------+-------------+-------------+--------------+------------+
| Mar.        | 2,826       | 2,134       | 2,950        | 38         |
+-------------+-------------+-------------+--------------+------------+
| Apr.        | 2,659       | 1,869       | 2,824        | 51         |
+-------------+-------------+-------------+--------------+------------+
| May         | 2,504       | 1,862       | 2,537        | 36         |
+-------------+-------------+-------------+--------------+------------+
| Jun.        | 1,930       | 1,550       | 2,331        | 50         |
+-------------+-------------+-------------+--------------+------------+
| Jul.        | 1,814       | 1,673       | 2,631        | 57         |
+-------------+-------------+-------------+--------------+------------+
| Aug.        | 1,722       | 2,253       | 2,803 1/     | 24         |
+-------------+-------------+-------------+--------------+------------+
| Sep.        | 1,589       | 2,011       |              |            |
+-------------+-------------+-------------+--------------+------------+
| Oct.        | 1,765       | 1,899       |              |            |
+-------------+-------------+-------------+--------------+------------+
| Nov.        | 1,872       | 1,845       |              |            |
+-------------+-------------+-------------+--------------+------------+
| Dec.        | 1,933       | 1,673       |              |            |
+-------------+-------------+-------------+--------------+------------+

1/ Price on August 24, 2004

Source: National Agricultural Cooperative Federation

## Korea: Consumer Price for Chicken Meat

+-------------+-------------+-------------+--------------+------------+
| Commodity   | Chicken     |             |              |            |
|             | Meat,       |             |              |            |
|             | Consumer    |             |              |            |
|             | Price       |             |              |            |
|             |             |             |              |            |
|             | Unit:       |             |              |            |
|             | Korean Won  |             |              |            |
|             | per         |             |              |            |
|             | Kilogram    |             |              |            |
+-------------+-------------+-------------+--------------+------------+
| Year        | 2002        | 2003        | 2004         | \% Change  |
|             |             |             |              | comparing  |
|             |             |             |              | to         |
|             |             |             |              | previous   |
|             |             |             |              | year       |
+-------------+-------------+-------------+--------------+------------+
| Month       |             |             |              |            |
+-------------+-------------+-------------+--------------+------------+
| Jan.        | 3,213       | 2,590       | 2,120        | -18        |
+-------------+-------------+-------------+--------------+------------+
| Feb.        | 3,114       | 2,537       | 2,257        | -11        |
+-------------+-------------+-------------+--------------+------------+
| Mar.        | 3,125       | 2,720       | 3,320        | 22         |
+-------------+-------------+-------------+--------------+------------+
| Apr.        | 3,073       | 2,455       | 3,148        | 28         |
+-------------+-------------+-------------+--------------+------------+
| May         | 2,960       | 2,462       | 3,223        | 30         |
+-------------+-------------+-------------+--------------+------------+
| Jun.        | 2,484       | 2,200       | 3,026        | 37         |
+-------------+-------------+-------------+--------------+------------+
| Jul.        | 2,522       | 2,209       | 3,376        | 52         |
+-------------+-------------+-------------+--------------+------------+
| Aug.        | 2,484       | 2,634       | 3,938 1/     | 49         |
+-------------+-------------+-------------+--------------+------------+
| Sep.        | 2,292       | 2,658       |              |            |
+-------------+-------------+-------------+--------------+------------+
| Oct.        | 2,467       | 2,565       |              |            |
+-------------+-------------+-------------+--------------+------------+
| Nov.        | 2,618       | 2,456       |              |            |
+-------------+-------------+-------------+--------------+------------+
| Dec.        | 2,428       | 2,408       |              |            |
+-------------+-------------+-------------+--------------+------------+

1/ Price on August 24, 2004

Source: Agricultural & Fishery Marketing Corporation

## Korea: Price Comparison

(Unit: Korean Won per Kilogram)

+-----------------+-----------------+----------------+-----------------+
| Cuts            | Domestic        | Imports 2/     |                 |
|                 |                 |                |                 |
|                 | 1/              |                |                 |
+-----------------+-----------------+----------------+-----------------+
|                 |                 | U.S. 3/        | Thailand 4/     |
+-----------------+-----------------+----------------+-----------------+
| Leg             | 5,050           | 1,047          | 1,829           |
+-----------------+-----------------+----------------+-----------------+
| Wing            | 6,430           | 1,484          | 1,898           |
+-----------------+-----------------+----------------+-----------------+
| Breast          | 4,570           | \-             | 1,955           |
+-----------------+-----------------+----------------+-----------------+

1/ Chilled products, retail prices on August 25, 2004

2/ Average prices between Jan. through June, 2004

3/ Frozen Bone-in products, CIF basis, average price of June 2003

4/ Frozen Bone-less products, CIF basis, average price of June 2003

Source: Korea Chicken Council & Korea Customs Service

## Korea: Monthly Average Foreign Exchange Rate

(Unit: Korean Won / 1U\$)

  ----------------------- ----------------------- ------------------------
  Month                   2003                    2004

  Jan.                    1179.46                 1184.64

  Feb.                    1191.27                 1166.96

  Mar.                    1233.68                 1166.33

  Apr.                    1231.51                 1150.81

  May                     1200.14                 1177.01

  Jun.                    1194.07                 1158.54

  Jul.                    1181.55                 1158.12

  Aug.                    1178.32                 1156.00 1/

  Sep.                    1166.03                 

  Oct.                    1166.04                 

  Nov.                    1185.21                 

  Dec.                    1192.85                 
  ----------------------- ----------------------- ------------------------

1/ August 25, 2004 Spot Rate

Source: Industrial Bank of Korea

# V. Trade Matrix

## Korea: Import Matrix for Chicken Meat 1/

  -------------- -------- --------- -------- -------- ------------- -------- ------------- --------
  Import Trade                                                                             
  Matrix                                                                                   

  Country: Korea                                                                           

  **Commodity:                                                                             
  Chicken Meat**                                                                           
  Unit: MT &                                                                               
  U\$1,000, RTC                                                                            
  Basis                                                                                    

  Imports for    **CY               **CY              **Jan.-Jun.            **Jan.-Jun.   
                 2002**             2003**            2003**                 2004**        

  Country        Vol      Val       Vol      Val      Vol           Val      Vol           Val

  **U.S.**       61,612   51,839    43,706   31,720   21,208        13,832   3,922         3,704

  **Others**                                                                               

  Thailand       30,475   47,608    43,943   61,228   24,593        30,555   6,746         11,415

  P.R.C.         554      875       870      1,600    271           488      113           168

  Canada         565      455       98       49       98            49       0             0

  Denmark        405      504       146      181      72            84       24,99         4,404

  France         0        0         0        0        0             0        64            190

  U.K.           0        0         0        0        0             0        962           1,369

  Other          255      661       74       173      0             0        66            99

                                                                                           

                                                                                           

  **Total for    32,254   50,103    45,131   63,231   24,169        31,218   10,450        17,645
  Others**                                                                                 

  **Grand        93,866   101,942   88,837   94,951   46,253        45,050   14,372        21,349
  Total**                                                                                  
  -------------- -------- --------- -------- -------- ------------- -------- ------------- --------

1/ HS 0207.1X.XXXX plus HS 1602.32.XXXX

Source: Korea Customs Service