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Foreign Agricultural ServiceSeoul, Korea
South Korea: Agricultural Situation &
Market for the United StatesMichael Fay
U.S. Agricultural Trade Office
Seoul Food & Hotel 2011
Seoul, Korea
April 25, 2011
Foreign Agricultural ServiceSeoul, Korea
Geography
Size roughly equal to the state of Indiana
Only land border to the North; Surrounded by water on three sides
Mountainous with no extensive plains; only 19.7% arable
Foreign Agricultural ServiceSeoul, Korea
Demographics
Homogeneous
50 million people
Population growth rate declining
One of the world’s most densely populated countries
Rapid urbanization
1/3 Christian, 1/3 Buddhist, 1/3 non-affiliated
Foreign Agricultural ServiceSeoul, Korea
Agricultural Production
Small farm size (3.6 ac)
1.2 mil farm households including 693,000 fulltime
Agriculture accounts for only 2.5% of GDP
Agricultural products: rice, root crops, barley, vegetables, fruit, cattle, pigs, chickens, milk, eggs and fish.
Farm Foundation Shrinking
0
500
1000
1500
2000
2500
3000
1970 1984 1998
Farm Households (thousands)
Farm Area (thousand ha)
Number of farms is estimated to continue to drop
Cultivated area is estimated to drop
Food demand is expanding
Foreign Agricultural ServiceSeoul, Korea
Economy 2010 GDP
growth is 6.2%
Exports: demand in major markets
2010 Domestic Consumer Demand-up.
Export Demand-up
Unemployment, Debt relatively high.
Exports
Main Pillar of
Korean Economy
U.S. RecoveryBut Uncertain
Global Conditions
Economic Performance
0
2000
4000
6000
8000
10000
12000
14000
1970 1990 1995 2000 2005 2011
-10
-5
0
5
10
15
GDP (US$ bil., curent prices, PPP)
Real Growth Rate (%)
Forcast
Foreign Agricultural ServiceSeoul, Korea
Consumption
Increased affluence
More women in the workforce
Well-traveled younger generation
Increased demand for international flavors
More western style family restaurants
Foreign Agricultural ServiceSeoul, Korea
Retail Market Structure
Food Sales
Traditional – 23.9%
Supermarkets -33.7%
Hypermarkets – 28.7%
Dept. Stores – 4.4%
On-line – 4.2%
On-line sales growing rapidly, 27.2% growth.
Foreign Agricultural ServiceSeoul, Korea
Trade
Top four trading partners:
China, United States, Japan and Hong Kong
Major exports: semiconductors, wireless telecommunications
equipment, motor vehicles, computers, steel, ships and petrochemicals.
Foreign Agricultural ServiceSeoul, Korea
0
5
10
15
20
25
30
20012002
20032004
20052006
20072008
20092010
$ B
illio
n
-20.0%
-15.0%
-10.0%
-5.0%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
Value Growth
Total Korean Agricultural Imports
Foreign Agricultural ServiceSeoul, Korea
Agriculture: Exports
Main agricultural exports: leather, seafood, cigarettes, snack foods, noodles, beverages and kimchi.
In 2010, total value of ag exports $5.6 bil.
Represents 1.2% of total Korean exports.
Foreign Agricultural ServiceSeoul, Korea
Agriculture: Imports
In 2010, South Korea imported $23.8billion worth of agricultural products
25.7% from the U.S.
Main Ag. imports: corn, wheat, hides, soybeans, hay, pork, beef and citrus
Foreign Agricultural ServiceSeoul, Korea
Total Agricultural ImportsIntermediate & C-O values off sharply in 2010
0
1
2
3
4
5
6
7
Bil
lio
n U
.S.
Do
llars
Bulk Intermed C-O Forest Seafood
2008 2009 2010
Foreign Agricultural ServiceSeoul, Korea
Agriculture: Market Access
U.S. Export Successes:
$6.1 billion in ‘10
#5 Consumer-Oriented ($1.8 billion)
#4 Beef
#5 Pork
#8 Dairy Products
#3 Coffee
U.S. Export Challenges:
Biotech
Approvals
Documentation
Labeling
Children’s Food Act
No sale of high cal/low nutrition in schools
Organic: ROK Accreditation 2012
Foreign Agricultural ServiceSeoul, Korea
Agriculture: Market Access
Korea-U.S. Free Trade Agreement
Two-thirds of U.S. farm products become duty free immediately.
American Farm Bureau Federation predicts agreement, once fully implemented, could provide $1.6 billion in additional U.S. ag exports.
Supported by more than 40 U.S. agricultural and food associations.
http://www.fas.usda.gov/itp/us-koreafta.asp
Top Ten Ag. Exporters to Korea
6.11
3.66
2.14 1.991.23
0.79 0.78 0.75 0.62 0.60
0.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00
U.S
.A
Chi
na
Aus
tralia
E.U
Bra
zil
N.Z
eala
nd
Malay
sia
Can
ada
Rus
sia
Viet N
am
CY 2010
$ B
illi
on
Total Korean Agricultural Importsvs. U.S. Ag. Exports to Korea
14.9 15.617.3
20.5
24.1
19.8
23.8
3.4 2.9 3.5 4.26.9
4.66.1
0
5
10
15
20
25
30
2004
2005
2006
2007
2008
2009
2010
$ B
illi
on
Korea The U.S.
Bulk Imports from the U.S.
U.S. Market Share of Bulk Imports increased from 46.2% to 52.9%.
00.20.40.60.8
11.21.41.61.8
Mai
ze
Soyb
eans
Whe
at
Cott
on
$ B
illi
on
2009 2010
Intermediate Imports from U.S.
00.050.1
0.150.2
0.250.3
0.350.4
Hid
esHay
Leath
r
Soyb
n Oil
$ B
illi
on
2009 2010
U.S. Market Share increased from 15.6% to 18.7%.
Consumer-Oriented Imports from the U.S.
U.S. Market Share increased from 26.8% to 27.6%.
00.050.1
0.150.2
0.250.3
0.350.4
0.45
Bee
f
Citr
us
Pork
Poul
try
$ B
illi
on
2009 2010
Best Prospects in Korea for U.S. of Consumer Oriented
Products
0
20
40
60
80
100
120
140
$ M
illio
n
Oth
er N
uts
Che
ese
Pou
ltry
Cho
cola
te
Bee
f, Fre
sh
Fruit Ju
ices
Che
rries
Cof
fee
roas
ted
Sau
ces
CY 2008 CY 2009 CY 2010
Food Service Market Structure
Spending on dining out has more than doubled in the last ten years 46% of food expenditure was spent on dining out (2008) W64.7 trillion of cash register sales (2008)
Restaurants: Total number peaked in 2003 at 605,000 and now on a decline Large companies are gaining market share at the expense of
small-scale, family-oriented restaurants
Hotels: 553 hotels at the end of 2008 which earned W4.1 trillion, up 44% from 2000 of which food and beverage sales account for about 39%.
Foreign Agricultural ServiceSeoul, Korea
Resources
Attaché Reports at http://www.fas.usda.gov
Exporter Guide
Retail Food Sector Brief
Food and Agricultural Import Regulations (FAIRS)
Briefs on organic sector, seafood, fresh cherries, avocados, honey, grapefruit, nuts, wine, apples, tomatoes, grain, citrus, potatoes, dairy, beef, pork, chicken, planting seeds, grapes, asparagus, etc.
Upcoming Promotional Opportunities with Seoul ATO
Seoul Int’l Wine & Spirits Expo 2011– May NRA Show – May 2011 Chicago Washington State Wine Expo 2011 - June IFT Show – June 11-15, 2011, New Orleans Fancy Food Show Summer – July 2011, Washington DC WUSTA Food Service Trade Missions Idaho/Oregon,
California/Hawaii 2011– June/July USA Organic & Natural Food Expo Seoul – July ATO Food ExportUSA Specialty Foods Trade Mission to Seoul 2011 –
August Busan Int’l Seafood Show 2011 – Nov. ATO/SUSTA Boston Seafood Show/SUSTA 2012 – March Seoul Food & Hotel 2012 – May e-Newsletter in Hangul - 4 times/year
Foreign Agricultural ServiceSeoul, Korea
Thanks!
www.FAS.USDA.gov
www.ATOSeoul.com