Korea will expand the amount of powdered milk and frozen pork belly subject to no import taxes as part of efforts to ease price hikes sparked by the massive slaughter of livestock amid the spreading foot-and-mouth disease, the finance ministry said Monday.
The measure, finalized during a Cabinet meeting held earlier in the day, will go into effect from early March under the government’s quota tariff system, according to the Ministry of Strategy and Finance.
A tariff quota is a quantitative threshold on imports, above which a higher tariff is applied. The lower tariff rate applies to imports within the quota, allowing policymakers to adjust duties on specified merchandise to help control inflationary pressure.
Under the latest decision, the government will impose no import duties on 30,000 tons of powdered milk until the end of this year.
It earlier sought to apply the tax exemption to 9,000 tons of the product by the end of June.
The amount of frozen pork belly subject to no import taxes will also be expanded from the previous 10,000 tons to 60,000 tons under the government tariff quota system. It will be enforced until the end of June, the ministry said.
The government also decided to temporarily lower import taxes on an additional 24 items, bringing the total number of imports on this year’s tariff quota list up to 99. The newly added products include butter, cheese, cotton thread, aluminum ingot and titanium ingot, the ministry said.
The expanded application of the tariff quota system comes as Korea is faced with supply shortages and resulting price hikes of major dairy products in the wake of the massive slaughter of livestock in recent months.
Korea’s quarantine authorities said they have culled and buried about 3.41 million livestock since FMD spread across the nation after its outbreak was reported in late November.
The move also comes in line with the government’s ongoing efforts to stabilize food prices amid growing inflationary pressure here driven by rising oil and raw material costs in the international markets.
Korea’s consumer prices jumped 4.1 percent last month from a year earlier mostly due to steep price increases of oil and agricultural products. The government targets to keep inflation at around 3 percent this year.
“We expect our latest actions will help ease anxiety over supply disruptions and price hikes caused by FMD and rising raw material prices in the international market,” the ministry said.