Outline of opportunities in South Korea
An overview of one of the fastest-growing economies
South Korea is one of the fastest-growing economies in the world with a Can$2.16 trillion gross domestic product (GDP) in 2018 at a growth rate of 1% in quarter 4 of 2018. With a population of 51 million, South Korea is Canada's 6th largest merchandise trading partner (Can$5.9 billion in 2018) and our 3rd largest in Asia, after China and Japan. The Canada-Korea Free Trade Agreement (CKFTA) eliminates and reduces tariffs on Canadian exports to South Korea, including agri-food and seafood products, creating significant advantages for Canadian exporters to this important market.
South Korea is a net importer of agri-food and seafood products from the world. In 2018, the South Korean agri-food and seafood trade deficit was Can$32.9 billion with imports valued at Can$43.1 billion, and Can$10.2 billion in exports. South Korea imported a wide variety of agri-food and seafood products with top imports being meats, fish and crustaceans, grains and oilseed products. The top 3 supplying countries are the United States, China, and Australia. Canada continues to be one of the main agri-food and seafood supplying countries (10th largest, Can$876.9 million in 2018) to South Korea which has grown by a compound annual growth rate (CAGR) of 7.6% for the past five years (2014-2018). Canada accounted for a 2% share of the global supplying market in agri-food and seafood.
Major sector opportunities in South Korea
Discover more information, strengths, opportunities and considerations for Canadian agri-food and seafood by reading our Asian agri-food market intelligence reports.
How do we select priority sectors?
Priority sectors were selected through a quantitative analysis of the data available in the Global Trade Tracker database for 2019. The first phase was to identify the top 100 products, amongst all agri-food and seafood products, ruling out the products that Canada does not have a capacity to produce. Each product was evaluated based on a series of quantitative criteria (that is, size of market, market growth, Canada's trade intensity, and tariff reductions), all of which were ranked over 10 years of historical trade data. The top 100 products identified through this method represented 62% of South Korea's total imports from the world, and 93% of Canada's exports to South Korea in 2018.
Our analysis focused on assessing opportunities from a strengths and challenges perspective:
- Strengths were defined by high performance in large South Korean import sectors, and high growth. Other sectors of interest were those involving free trade agreements such as the Canada-Korea Free Trade Agreement (CKFTA). As of January 1, 2019, 70% of Canadian agriculture and agri-food exports are eligible to enter South Korea duty-free. That will grow to 99% by 2029.(Source: CKFTA for Agri-Food Exporters)
- Challenges were defined by the issues that industry might face while trying to take advantage of market opportunities.
In phase two, the products were further categorized into 22 super sectors and were assessed through a survey by Agriculture and Agri-Food Canada (AAFC) and 10 provincial experts. The experts assessed the opportunities and identified the challenges that may remain.
All priority agri-food and seafood products are both imported by South Korea and within Canada's capacity to produce and supply internationally.
Growth through processing
While South Korea is one of Canada's top trading partners, the exports of processed food and beverages category is expanding quickly. As of 2018, Canada supplied Can$625.9 million in processed food and beverages to South Korea, at a compound annual growth rate (CAGR) of 15.1% since 2014. High growth products include pork products, canola oil, food preparations, and frozen lobsters.
Processed foods and beverages represented 71.4% of all Canadian agri-food and seafood shipped to South Korea in 2018.
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|Frozen bone-in pork||14.6%|
|Fresh or chilled bone-in pork||10.0%|
Source: Global Trade Tracker, 2019
While Canada has a significant advantage in the production of many high-quality commodities in the grains and oilseed sectors, as well as other areas such as pet food and live lobsters, opportunities exist for Canadian exports to grow to meet the changing needs and demands of South Korean consumers. For example, the growing number of consumers choosing to live alone, often in apartments in urban areas, has increased demand for a variety of products and services catering to single family homes. Similarly, opportunities exist for products ranging from smaller portions of packaged food catering to smaller, apartment-sized appliances. That said, Canada is one of many exporters to South Korea, and there is strong competition for key products including pork, beef, food preparations, and various oilseed products.
|Country||Share of South Korea's imports from the world (%)||Top three processed food and beverages imported by South Korea (commodity share %)|
|United States||25.9||Food preparation (13), frozen bone-in beef cuts (9.1), frozen bone-in pork (8.4)|
|China||13.2||Frozen fish, n.e.s* (9.1), frozen vegetables (7.0), vegetables and mixtures of vegetables, prepared or preserved (6.1)|
|Australia||8.9||Frozen boneless beef (25.1), raw cane sugar in solid form (20.0), fresh or chilled boneless beef (15.5)|
|Vietnam||5.0||Frozen shrimps and prawns (21), frozen octopus (16), prepared or preserved shrimps and prawns (11)|
|Brazil||4.1||Oilcake (73.7), Frozen cuts and edible offal of fowls (21.9), frozen, coffee (0.9)|
Source: Global Trade Tracker 2019
*n.e.s.: not elsewhere specified
Opportunities for Canada
The Canada-Korea Free Trade Agreement (CKFTA) provides new market access opportunities for Canadian exporters. The agreement recognizes the integrated nature of several industries in the North American economy, providing for rules of origin that will allow these products to benefit from preferential treatment in South Korea. This is important to allow Canada to continue competing with other countries exporting goods to South Korea, including the United States and the European Union, competitors that have benefited from lower tariffs since the implementation of the Korea-U.S. and Korea-EU free trade agreements (FTA).
For more information, please visit CKFTA for Agri-Food Exporters.
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The complete library of Global Analysis reports can be accessed through the International agri-food market intelligence page.
South Korea represents many business opportunities to Canadian companies but it also has strict import requirements for many food products and Canadian exporters are responsible for determining these import conditions by working with their South Korea importers. It is also wise to consult your local Canadian Food Inspection Agency (CFIA) Office to obtain export requirements information or enquire any market access concerns before shipping your products to South Korea. Please refer to CFIA - A Who-to-Contact List. The Market Access Secretariat (MAS) of Agriculture and Agri-Food Canada is also available to assist in providing export-related information and support. This service offers a single point of contact with the goal of helping the Canadian food industry and businesses treach international markets.
If you have questions about exporting your agriculture or agri-food products, or are looking for support, please contact the Market Access Secretariat at email@example.com.
To find trade events, in-market Trade Commissioners, marketing tools and more to help you achieve your international business goals, see the Agri-Food Trade Services for Exporters page.
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