By Miyoung Kim

SEOUL, April 16 (Reuters) - South Korea extended its risk level for bird flu to the second highest nationwide on Wednesday, as the latest suspected case was confirmed positive and it braces for the worst influenza outbreak among poultry in more than four years.

In less than two weeks, South Korea has confirmed 11 cases of the deadly H5N1 strain, which had been contained in the southwest of the country -- North and South Jeolla provinces, some 320 km (200 miles) south of Seoul.

But on Tuesday it had an outbreak at a farm in Pyeongtaek city in Gyeonggi province, 60 km south of Seoul, where poultry tested positive for H5 and the farm ministry said on Wednesday it was almost certain the case will be confirmed as the deadly H5N1 strain, with the results due later on Wednesday.

It also confirmed another case of the positive H5 strain in a farm in Sunchang county in North Jeolla province, raising fears that, despite rigorous quarantine work, the fatal virus is spreading fast and the country may repeat its previous disaster in late 2003 when it had to kill 5.3 million birds.

"We have culled around 2.3 million birds so far and the number will easily outgrow the 2006 level when we slaughtered 2.8 million," Kim Chang-seop, a ministry official in charge of livestock quarantine, told reporters.

Korea is investigating possible causes of the spread such as migrating birds and transport workers who have been moving around the affected sites and other parts of the country.

The farm ministry also said it would beef up quarantine work and extend its regular tests on poultry -- normally carried out during the most susceptible November and February period -- to year-round and raised the risk level for bird flu to 'alert,' extending coverage nationwide from the southwest.

Its quarantine work has been mainly focused on culling birds within a 3-km radius of an affected site and stopping the shipment of birds within a 10-km radius.

LIMITED IMPACT ON CONSUMPTION

The latest outbreak appears to have limited impact on poultry consumption so far, as the country had a number of similar outbreaks in the past, with no reports of human deaths.

South Korea had seven outbreaks of H5N1 between November 2006 and March 2007.

"We are having a bird flu case almost every year and it's become a sort of seasonal event and as a result people are now more used to it," said Choi Ja-hyun, an analyst at Hyundai Securities.

"Demand for poultry products will be affected but it is unlikely to have any huge impact on the industry," she said.

Chicken sales at four major retailers surveyed by the ministry showed a 58 percent decline in the first two weeks of april, but egg sales rose 14 percent.

The outbreak, however, has caused a fall in poultry prices of up to 11 percent this month, posing a bigger threat to farmers already struggling with high animal feed costs stemming from soaring global commodity prices.

There are many types of avian flu viruses and experts are more worried about the H5 and H7 subtypes, which they think have a higher potential to mutate into forms that could pass easily between people and cause a human pandemic.

There had been 240 human deaths globally from the H5N1 strain and 380 confirmed cases of infection since 2003, according to World Health Organisation data.

A major concern is the possibility of mutation into a disease that easily passes from one person to another, triggering a global pandemic.

($1=979.3 won) (Editing by Nick Macfie and Jerry Norton)

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