IT IS anticipated Australian beef exports to Korea will trigger the 2019 safeguard volume in the next three to five weeks, which will increase tariffs on Australian beef into the market from 24 to 30 percent through until the end of the year.
Meat & Livestock Australia has reported the looming tariff increase on its website today.
Under the Korea-Australia Free Trade Agreement (KAFTA) an annual safeguard provision applies to Australian beef.
For 2019, the trigger level is 170,673 tonnes, which is likely to be exceeded within the next month, MLA predicts.
This year the tariff increase for Australian product in excess of the safeguard volume has been reduced from 40pc to 30pc, bringing Australia in line with the US.
The US is Australia’s major competitor in the Korean imported beef market.
The US tariff will remain at 18.7pc due to a greater safeguard volume under the Korea-US Free Trade Agreement (KORUS).
Once Australia’s safeguard volume is reached in the coming weeks, the tariff differential between Australia and the US will increase from 5.3pc to 11.3pc.
While the differential will create challenges for Australian beef in an already highly competitive market, this is a marked improvement on 2018, when the tariff differential was 18.7pc.
Australian beef – a ‘family favourite’ for Korean consumers
While immediate demand for Australian beef may be influenced by the higher tariff and subsequent increase in cost, fundamental consumer preference for Australian beef will remain unchanged. MLA conducts an annual consumer tracker survey in Korea, which shows:
- Country of origin is very important to Korean beef buyers, as the country relies on imports for approximately 64pc of its beef requirements
- Korean consumers have a strong affinity with Australian beef, associating the ‘True Aussie’ brand with trust, reliability and consistent quality.
Source: MLA. For more information view the recently updated Korea Market snapshot here.
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