S. Korea’s corn imports soar after tough ASF regime, pork fears linger

After nearly two months out of the corn market, South Korea’s giant feed sector has scooped up just over one million mt of corn in the space of three weeks in a clear sign that fears over the country’s African swine fever outbreak are starting to dissipate.

But the country’s pork demand remains slow and prices low.

Politically the fallout is stirring up tensions as the country’s pig sector pushes back on hardline measures.

Confirmation of the ASF outbreak came on September 17, in provinces close to the border with North Korea – where the disease is thought to be endemic amongst the country’s pig and wild boar population.

Both regional and national government responded rapidly, imposing a quarantine zone, restricting movements and buying up pig herds in affected areas in order to clear an exclusion zone.

The effect caused outrage among the pig breeding sector, with complaints that the heavy-handed response had killed tens of thousands of healthy pigs, but the draconian response has restricted fresh incidences of the disease almost exclusively to the wild boar population.

The last incidence amongst domestic swine was reported on October 11, with every case since then confined to wild boar leading the pork sector to again rail against the government’s measures.

A further tightening of legislation relating to the control of infectious diseases, passed earlier in the month, gave authorities the power to destroy pigs within a defined zone around an outbreak of ASF and expanded it to foot and mouth or bird flu.

The move prompted the country’s pig farmers to denounce the measure as “an unreasonable bill to blame innocent hog farmers for ASF outbreaks in wild boars,” according to a national pork producers’ industry group, calling it an ‘infringement of farm property rights’.

Alongside that, the country’s domestic demand for pork and pork products is continuing to fall, prompting fears that the sector may not be able to recover in a move that is at odds with countries like China and Vietnam, where pork prices have set record highs recently.

“Pork consumption is still being affected by African swine fever – demand is very slow and price is at the low end. It’s a completely different situation to China, where pork prices have been skyrocketing,” one South Korea-based trade source said.

The price of certain cuts of pork stood at WON1,268/kg ($1,080/mt) on September 15 but has fallen sharply since then to be reported at WON818/kg ($690/mt) on Thursday, according to data from the country’s pork producers’ association.

Government figures have sought to rekindle demand through a series of initiatives, including dressing in bright pink pig hats, while one of the hardest hit provinces, Gyeonggi-do, used its social media presence to host ‘the world’s first live 12-hour pork consumption campaign’ earlier this week.

However, the loss of pork demand is being compensated for by increased poultry and cattle demand, a fact acknowledged by the USDA’s local office recently when it increased its expectations for corn 2019/20 corn imports to 10.8 million mt.

With the country’s feed sector now kicking into gear and locking up corn supply out to April 2020, it remains to be seen how long ASF will continue to throw a shadow over the country’s import need.