Domestic pork costs over 20,000 won per pound. Imports, which are relatively cheap, have also risen significantly in price. So the government has decided to lower the tariff on imported pork to 0%. Let’s fact-check whether this will cause the price to drop.
Reporter Lee Ji-eun, what exactly do you mean by how much?
[기자]
The government has announced that it will lower the tariffs in some countries from up to 25% on 50,000 tons of imported pork (processed, pork belly, etc.) to 0%.
For example, if you import $1,000 of pork, the average import cost will be reduced by regarding 20% to 1.25 million won, which was previously 1.56 million won.
[앵커]
So, the overall price of imported pork will drop by 20%?
[기자]
no. Only pork from countries with tariffs of up to 25% is eligible.
First, let’s look at the share of pork imports by country last year.
The United States has the most, followed by Spain and the Netherlands.
Except for Canada, 90% of countries have already signed an FTA, so the tariff is 0%.
In the case of Canadian products, pork for processing is already tax-free, and in the case of refrigerated and frozen pork belly is 8-9%.
[앵커]
So, what regarding the countries where the government says the tariff is 25%?
[기자]
Take Brazil and Mexico as examples.
Currently, the two countries import 10,000 tons, or 3%.
The government explained that tariffs would allow imports of more pork from countries where prices were less competitive and imports were low.
[앵커]
It remains to be seen how much will be imported, but wouldn’t it be more sensitive to consumers than pork belly, which is used for processing things like ham?
[기자]
Yes. So, I analyzed only imported frozen and refrigerated pork belly.
Imports from Canada, Mexico and Brazil, which are subject to tariffs, are less than 9%.
The government predicted that 10,000 tons of pork belly might be imported from these countries without duty in the second half of this year.
[앵커]
Will the price be stable enough like this, how regarding?
[기자]
Theoretically, yes, but for now.
First of all, it’s not that big of a deal.
Even importing duty-free pork belly takes regarding a month by ship.
In addition, it is unclear whether companies will lower their selling prices to consumers because they cannot force a price cut just because they gave a tax cut.
As the corona restrictions are lifted and the number of tourists increases, the demand for pork is also increasing, so the price may rise even more.
It can also be seen as a variable whether consumers choose pork belly from an unfamiliar origin.
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