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UPDATE 1-South Korea lifts ban on U.S. poultry, egg imports -USDA

(New throughout, adds comments from trade group and USDA secretary, background)

CHICAGO, Aug 17 (Reuters) - South Korea lifted a ban on imports of U.S. poultry and eggs, the U.S. Department of Agriculture said on Thursday, allowing American farmers to resume sales to the Asian country that suffered an egg shortage caused by its worst-ever bird flu outbreak.

South Korea was importing more U.S. eggs earlier this year as it fought its own outbreak of bird flu. But in March, the country limited U.S. poultry imports after the first U.S. case of bird flu of the year was detected on a commercial chicken farm in Tennessee.

Prior to that, Americans "were putting table eggs in there like they were going out of style," said Jim Sumner, president of the U.S. Poultry and Egg Export Council, a trade group.

"They are in desperate need still," he said.

South Korea, Asia's fourth-largest economy, was hit hard by the deadly H5N8 bird flu strain after the first case was confirmed in November, leading to a record culling of more than 37 million farm birds, more than a fifth of its total poultry population.

Last month, South Korea's government downgraded its bird flu alert by one notch from the highest level, after more than a month passed without new cases.

South Korea bans U.S. poultry imports when the United States detects any cases of bird flu. The USDA is now working to convince South Korean officials to limit future restrictions on shipments to the geographic regions in which the virus is detected.

"Koreas lifting of its most recent ban is an important move for our poultry and egg industries, but it is still just the first step," USDA Secretary Sonny Perdue said in a statement.

In 2014, the last full year without any bird flu-related U.S. trade restrictions in place, South Korea purchased $122 million in U.S. poultry products, including eggs, making it the United States tenth-largest market, according to the USDA.

Last year, South Koreas imports from all countries exceeded $350 million in 2016, but only $39 million came from the United States. (Reporting by Tom Polansek; Editing by Dan Grebler and David Gregorio)