January 6, 2017 / 5:09 AM / a year ago

UPDATE 2-S.Korea egg import subsidies criticised as too little, too late

* S.Korea to spend 900 mln won to cover shipment fees

* Targets fresh egg imports ahead of Lunar New Year holiday

* Wholesalers charter Korean Air flight for shipment -source

* 1st fresh egg imports since 1999, 1st-ever from U.S. (Adds Korean Air U.S. fresh egg charter flight)

By Jane Chung

SEOUL, Jan 6 (Reuters) - South Korean egg distributors on Friday said government plans to subsidise fresh egg imports amid a record bird flu outbreak were too little, too late to alleviate a shortage ahead of peak demand in the upcoming Lunar New Year holiday season.

The country’s agriculture ministry said in a statement on Friday that under terms of a previously flagged plan it will spend 900 million won ($758,000) to support air and seaborne shipment costs for imported eggs through the end of February.

The aid, which could see South Korea import fresh eggs from the United States for the first time, comes as the country labours through an outbreak that has seen more than 30 million birds culled - most of them laying hens. But importers said the subsidy won’t cover increased costs, and is too late to fix the shortfall ahead of the end-January holiday season.

For air shipment the government would cover up to 1 million won per tonne and 90,000 won per tonne for ship transport, the ministry said. The eggs will take about seven days to arrive by air and roughly 21 days by ship, and would be the country’s first fresh egg imports since 1999.

“The government (previously) announced it would cover half of the shipping fees,” said Im Jeong Kyun, a director at JW Companys Inc, who is looking to import fresh eggs from the United States. Im said his air shipment costs are 2.75 million won, nearly three times the 1 million won subsidy.

“Unlike that announcement, the government is saying (today) it will only support about 36.7 percent” of costs, Im said. If the government can only subsidise a third of the costs, imports may not be feasible, he said.

Despite the cost implications, for some airbone imports offer the only way to meet consumer demand.

An industry source with direct knowledge of the matter said one group of wholesalers had reserved - and already paid for - a Korean Air Lines charter flight, with a capacity of 100 tonnes, to bring fresh eggs from the United States around Jan. 16.

A Korean Air spokesman declined to comment.

Ha Do-Bong, director of the Korea Egg Distribution Association, agreed the government measures were insufficient and too late to relieve the egg shortage in time for the Lunar New Year.

“But like it or not, importing eggs is the only option to increase supplies,” Ha said.

Meanwhile the industry source and an agriculture ministry official said South Korea and the United States would finalise negotiation on clearing egg imports by the end of this week.

$1 = 1,187.8000 won Reporting by Jane Chung; Editing by Kenneth Maxwell and Christian Schmollinger

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