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Sector Trend Analysis – Vegetable oils in South Korea

June 2019

Executive summary

South Korea was the 34th largest vegetable oil market worldwide in 2018, with US$426 million worth of retail value sales.

Between 2014 and 2018, South Korea imported 65.6% of their vegetable oils and has decreased by a compound annual growth rate (CAGR) of −0.2%.

Subsectors of the South Korean vegetable oil market experienced varying levels of growth between 2014 and 2018, with a significant increase in retail sales for canola oil and soybean oil products, and falling sales for olive oil and other edible oils. The forecasted values, however, shows that olive oil will experience the most significant increase in retail sales.

South Korea's imports of vegetable oil products from Canada in 2018 were US$89 million and have increased at a 6.5% rate between 2014 and 2018 with imports from the world only increasing at 0.26%.

The South Korean demographic has turned more toward home meal replacements (HMRs) instead of preparing meals. As a result, the inclusion of vegetable oils in gift sets has been a major method by companies to increase their retail sales in South Korea.

Positioning vegetable oil products in the world

South Korea was the 34th largest vegetable oil market worldwide in 2018, with US$426 million worth of retail value sales. Between 2014 and 2018, South Korea imported 65.6% of their vegetable oils and has decreased by a compound annual growth rate (CAGR) of −0.2%. The top five vegetable oil companies had very little influence in the South Korean vegetable oil market indicating a market that isn't dominated by the mainstream world influencers.

Top five vegetable oil companies worldwide in 2018, US$
Company International sales (billion) Sales in South Korea (million)
1. Wilmar International Ltd 6.6 N/A
2. China National Cereals, Oils and Foodstuffs Corporation (COFCO) 2.2 N/A
3. Bunge Ltd 1.8 N/A
4. Deoleo SA 1.8 0.4
5. Adani group 1.7 N/A
6. Other 37.1 54.2
7. Private label 9.7 N/A

Source: Euromonitor International, 2019

N/A: Not Available

Fixed 2018 Exchange Rate

Top ten vegetable oil products retail markets worldwide in 2018, US$ millions
Country Retail sales
1. India 24,516.2
2. China 15,516.4
3. United States 3,677.5
4. Brazil 3,563.7
5. Turkey 2,541.9
6. Russia 2,520.2
7. Spain 2,270.8
8. Iran 2,133.4
9. Italy 2,018.5
10. Pakistan 1,753.8
34. South Korea 426.0
Source: Euromonitor International, 2019
The vegetable oil products[1] market in South Korea in 2018, US$ millions
Indicator Value
Retail sales, 2018 426.0
Compound annual growth rate of retail sales (2014-2018) −0.2%
Imports of vegetable oil products from the world, in 2018 649.8
Exports of vegetable oil products to the world, in 2018 34.9
Dependence on imports 65.6%

Source: Euromonitor International and Global Trade Tracker, 2019

1: For the purpose of this report, "vegetable oil products" was defined using the following HS codes: 1507-1515, inclusively, and with the exception of palm oil (Harmonized System (HS) code 1511)

Canada's performance

In 2018, Canada exported over US$2.6 billion worth of vegetable oil products to the world, with 59.6% going to the United States. South Korea imported US$105 million of Canada's vegetable oil products in 2018. More specifically, canola products accounted for 92.1% of Canada's main vegetable oil exports to South Korea at a value of US$96.7 million. Canada was the second main exporter of vegetable oil to South Korea behind the United States.

Canada mainly exported its vegetable oil products to the United States and China due to a larger market share of the imports compared to the rest of the top 10 importers of vegetable oil products in the world.

Vegetable oil products[1] export gap, 2018 (US$ millions)
Imports of Vegetable oil Products 2014 2015 2016 2017 2018 CAGR* % 2014-2018
South Korea imports from the world 643.0 546.4 554.1 681.2 649.8 0.3
South Korea imports from Canada 56.6 70.3 85.9 110.7 105.0 16.7
Gross export gap 586.4 476.1 468.2 570.5 544.8 −1.8

Source: Global Trade Tracker, 2019

1: For the purpose of this report, "vegetable oil products" was defined using the following HS codes: 1507-1515, inclusively, and with the exception of palm oil (Harmonized System (HS) code 1511)

*CAGR: Compound Annual Growth Rate.

Top ten importers of vegetable oil products[1] worldwide 2017, US$
Country Imports US$ billions Top suppliers and market share (%) Canada's share (%)
1 2 3
United States 5.4 Canada: 35.7 Indonesia: 11.7 Spain: 11.4
India 5.1 Argentina: 44.9 Ukraine: 34.9 Brazil: 7.6 0.00
China 3.7 Indonesia: 21.1 Canada: 14.9 Ukraine: 14.9
Italy 3.1 Spain: 53.0 Greece: 10.2 Ukraine: 9.3 0.00
Netherlands 2.5 Germany: 22.9 Philippines: 18.4 Ukraine: 13.7 0.03
Germany 2.1 Indonesia: 16.8 Netherlands: 16.2 Italy: 11.4 0.82
France 1.5 Spain: 33.5 Netherlands: 10.0 Belgium: 9.6 0.00
Spain 1.5 Ukraine: 31.4 Portugal: 13.3 Germany: 5.5 0.01
Belgium 1.1 Netherlands: 45.8 France: 20.6 Germany: 12.6 0.00
United Kingdom 1.1 Netherlands: 25.5 Spain: 19.1 France: 14.4 0.02

Source: Global Trade Tracker, 2019

1: For the purpose of this report, "vegetable oil products" was defined using the following HS codes: 1507-1515, inclusively, and with the exception of palm oil (HS code 1511).

Retail environment

Retail value sales of vegetable oil products have been steadily decreasing from 2014 to 2018, by a CAGR of −0.2%. Through 2021, the market is expected to keep falling at a CAGR of −0.3% in South Korea.

The retail market for edible oils has been declining over the 2016-2018 period due to consumer preference for HMRs such as ready meals, processed meat and prepared sauces since consumers have less time to prepare home cooked meals with their much busier lifestyles.

Traditional Korean oils such as sesame oils have been seeing a decline over the past five years because more households prefer HMRs. The other edible oils category has experienced a decline despite the fact that premium oils such as coconut oil were prefered and are highly used for weight management, as well as, for beauty purposes.Footnote 1

Historical and Forecast retail value sales of vegetable oil products in South Korea, in US$ millions
Description of this image follows.
Description of above image
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
$424.3 million $428.8 million $478.6 million $456.1 million $437.5 million $426.0 million $423.6 million $422.0 million $420.8 million $419.7 million $418.8 million

Source: Euromonitor International, 2019.

The blue coulmns (2019-2023) are the five year forecast.

Historical and forecast retail value sales of vegetable oil products in South Korea, in US$ millions and period growth (%), current prices – fixed 2018 exchange rates
Category 2014 2018 CAGR* % 2014-2018 2019 2023 CAGR* % 2019-2023
Edible oils 428.8 426.0 −0.2 423.6 418.8 −0.3
Olive oil 41.2 38.9 −1.4 39.9 43.8 2.4
Corn oil 13.8 12.0 −3.4 11.7 11.1 −1.3
Canola oil 117.0 133.6 3.4 133.5 130.1 −0.6
Soy oil 72.7 82.2 3.1 80.9 77.8 −1.0
Sunflower oil 9.0 10.0 2.7 9.9 9.2 −1.8
Other edible oil 175.3 149.3 −3.9 147.7 146.7 −0.2

Source: Euromonitor International, 2019

*CAGR: Compound Annual Growth rate

Canola Products

Canola oil is Canada's largest oil product produced and exported to the rest of the world, as indicated by the large sales values to the United states and China and although these are the two markets with the highest imports of Canadian Canola oil, the South Korean market has room to grow with a CAGR of 3.4% from 2014-2018. Canola oil is also the largest of the canola products imported by South Korea from Canada.

Also, important to note is that canola oil is the largest imported vegetable oil by South Korea as it is the only one greater than a hundred million dollars (133.6 million to be exact) accounting for 31% of vegetable oils being imported by South Korea and will continue to be the highest imported value all through 2023 (130.1 million). Canada accounts for about 72.5% South Korean canola oil imports.

South Korean imports of selected canola products from Canada in 2018, value in US$
South Korean Imports from Canada 2013 2014 2015 2016 2017 2018
Total imports 77,295,898 55,791,761 71,493,509 83,769,836 110,056,769 96,739,178
HS code: 1205 - Rape or colza seeds, whether or not broken 36,376,210 72 389,295 21 0 0
HS code: 1514 - Rape, colza or mustard oil and fractions thereof, whether or not refined, but not chemically modified 40,919,688 55,791,689 68,352,897 83,679,446 104,639,209 96,739,169
HS code: 230641 - Oilcake and other solid residues, whether or not ground or in the form of pellets 0 0 0 0 350,649 0
HS code: 230649 - oilcake and other solid residues, whether or not ground or in the form of pellets, glucosinolates of >= 30 micromoles per gram 0 0 2,751,317 90,369 5,066,911 9
Source: Global Trade Tracker, 2019

In 2018, the five largest vegetable oil product companies in South Korea controlled 86.8% of the market compared to a small decrease from the 89.5% of sales share recorded in 2016. The 'others' category made up 12.7% of the market share. CJ Cheiljedang Corp, maintained its prominent position with a value share of 36.9% in 2018 up from 35.7% in 2016. CJ Cheiljedang Corp. gained in the olive oil market due to premium packaging and products claiming special origins, although they lost market share in the other edible oils market.

In South Korea, the performance of cooking oils is largely determined by sales of oil gift sets during the periods surrounding the Lunar new year and Korean thanksgiving day. Ottogi foods and Sajohaepyo have capitalised on the gift sets initiative crediting it with the gain in market share in 2018.Footnote 1

Top five vegetable oil product company shares in South Korea – retail value sales % breakdown
Companies 2014 2015 2016 2017 2018
CJ Cheiljedang Corp. 34.6 34.9 35.7 37.0 36.9
Ottogi Foods Co. Ltd. 22.1 20.4 18.3 19.0 19.3
Sajohaepyo Corp. 20.3 18.1 19.0 17.9 18.0
Daesang Corp. 7.0 6.0 6.6 8.3 8.0
Dongwon Group 6.7 6.1 5.5 4.8 4.6
Source: Euromonitor International, 2019

Health and wellness products

The majority of health and wellness edible oil products sold since 2014 were naturally healthy and organic oil, whereby the total category experienced steady decline through the period from 2014 to 2018 at a CAGR of −1.4%. Organic edible oils fell at an incredible CAGR of −15.9% from 2014 to 2018.

However, the forecast indicates a growth in the health and wellness edible oils category due to the growth in the naturally healthy edible oils category at a rate of 2.4% through to 2023.

There is no forecasted growth in the organic edible oil category over the 2019 to 2023 period.

Historical and forecast retail value sales of health and wellness vegetable oil products in South Korea by category, in US$ millions and period growth (%), current prices – fixed 2018 exchange rates
Category 2014 2018 CAGR* % 2014-2018 2019 2023 CAGR* % 2019-2023
Health and wellness edible oil 41.2 38.9 −1.4 39.9 43.8 2.4
Naturally healthy edible oils 41.0 38.8 −1.4 39.9 43.8 2.4
Organic edible oil 0.2 0.1 −15.9 0.0 0.0

Source: Euromonitor International, 2019

*CAGR: Compound Annual Growth rate

Product launch analysis

There has been a large increase of product launches for vegetable oil products in South Korea in the last two years, double the amount of launches in 2016. New products account for the majority of the launch types for the increase in product launches. The top package type that has had an interesting increase is bottled products, depicting an almost three times increase in for the increase in new product launch in the last two years in comparison to 2016.

Product launches of vegetable oil products in South Korea, 2014-2018, by product attributes
Product attributes Yearly launch counts
2014 2015 2016 2017 2018
Yearly product launches 30 24 37 80 75
Top five claims
Premium 6 6 4 4 8
Organic 4 7 4 15 11
Ease of use 0 0 1 5 3
Environmentally friendly package 0 3 5 8 5
Environmentally friendly product 2 1 5 8 1
Imported status
Imported 7 2 6 14 9
Not imported 23 22 31 66 66
Top packaged types
Bottle 28 23 26 73 68
Jar 0 0 7 3 2
Can 1 1 0 3 1
Tub 0 0 0 1 1
Carton 1 0 2 1 5
Launch types
New variety/range extension 7 10 12 17 21
New packaging 3 5 2 9 8
Relaunch 3 2 0 6 1
New product 17 7 23 48 45
Top flavours (including blend)
Unflavoured/plain 27 24 30 67 72
Garlic 0 0 4 6 1
Lime/lemon 1 0 1 0 1
Truffle (mushroom) 0 0 0 0 1
Onion 0 0 1 7 0
Chilli pepper 0 0 1 2 0
Sesame 2 0 0 0 0
Top ingredients[1]
Sesame seed 9 7 8 14 12
Low erucic acid rapeseed oil 3 3 4 12 0
Perilla seed (food) 3 5 3 11 10
Avocado oil 0 0 0 6 9
Grape seed oil 3 1 0 4 7
Extra virgin olive oil 2 5 2 5 6
Top five companies
CJ Cheiljedang Corp. 7 1 4 4 3
Ottogi Foods Co. Ltd. 1 0 0 0 3
Sajohaepyo Corp. 0 5 0 0 0
Daesang Corp. 4 3 2 5 0
Dongwon Group 0 3 0 0 3

Source :Mintel, 2019.

1: the totals for ingredient counts will add to more than the total launches as products can have multiple top ingredients.

New vegetable oil product examples

Sesame oil
Source: Canada Tariff finder, 2019
Company Ottogi foods co Ltd, South Korea
Brand Ottogi
Category Sauces and seasonings
Date published October 2018
Price in US dollars 8.05
Pack size 900 milliliters

Ottogi sesame oil has been repackaged. The Hazard analysis and critical control points (HACCP) certified product is made with traditionally roasted sesame and has been processed using the traditional mill pressing method to provide an aromatic flavour. It is claimed to be the number one sesame oil brand in Korea, and retails in a 900 millilitre (ml) pack featuring one-touch lid for convenience.

Premium grape seed oil gift set
Source: Canada Tariff finder, 2019
Company Dongwon group
Brand Dongwon
Category Sauces and seasonings
Date published June 2018
Price in US dollars 14.26
Pack size 500 milliliters

Dongwon premium grape seed oil gift set has been repacked featuring an artwork designed by Kwak Myeongju. The product is described as 100% grape seed oil made with selected fine grapes from Spanish Mediterranean. It is said to be ideal for cooking natural cuisines without adding an artificial taste or odour, and retails in a 3 × 500ml pack bearing the HACCP logo.

Canola oil
Source: Canada Tariff finder, 2019
Company CJ CheilJedang
Brand Beksul
Category Sauces and seasonings
Date published April 2018
Price in US dollars 2.62
Pack size 500 milliliters

Beksul canola oil has been repackaged. The product is from Canada, contains more than 60% oleic acid, and is said to be suitable for all kinds of cooking including pan-frying, deep-frying and roasting. It retails in a recyclable 500ml pack. It is also available in a 900ml pack.

Tariff elimination schedule

On January 1, 2019, 95% of Canada's exports will benefit from duty-free access into South Korea. Korea will eliminate most tariffs on vegetable oils by 2024, apart from a few shown below that will keep the most favoured nation (MFN)Footnote 2 tariffs. Consult the Canada tariff finder to explore tariff information from the Korean market under the Canada-Korea Free Trade Agreement (CKFTA), and other foreign markets with which Canada has a free trade agreement.

Tariff preferences (%) on selected Canadian vegetable oils exports to South Korea
Vegetable oils and HS code MFN 2017 2018 2019 2020 2021 2022 2023 2024
Soy bean oil crude 1507.10 5.0 3.7 3.2 2.7 2.2 1.6 1.1 0.5 0.0
Soy bean refined oil 1507.90.10 5.0 2.1 1.1 0.0 0.0 0.0 0.0 0.0 0.0
Soy bean oil and its fractions other 1507.90.90 5.0 5.6 4.8 4.0 3.2 2.4 1.6 0.8 0.0
Ground nut oil and its fractions 1508 27.0 18.9 16.2 13.5 10.8 8.1 5.4 2.7 0.0
Olive oil and its fractions 1509 5.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Oils and their fractions 1510 5.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Sunflower seed oil[1] 5.0 4.0 2.0 0.0 0.0 0.0 0.0 0.0 0.0
Safflower oil[2] 5.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Cotton seed oil crude 1512.21.00.00 5.0 2.1 1.1 0.0 0.0 0.0 0.0 0.0 0.0
Cotton seed and its fractions - refined oil 1512.29.10.00 5.0 3.7 3.2 2.7 2.2 1.6 1.1 0.5 0.0
Cotton seed and its fractions - other 1512.29.90.00 5.0 5.6 4.8 4.0 3.2 2.4 1.6 0.8 0.0
Coconut (copra) oil 1513.11 and 1513.19 3.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Palm kernel or babassu oil 1513.21 and 1513.29 8.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Low erucic acid rape or colza oil and its fractions, crude 1514.11 5.0 2.8 2.1 1.4 0.7 0.0 0.0 0.0 0.0
Low erucic acid rape or colza oil and its fractions, refined 1514.19 5.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Other rape or colza oil[3] 5.0 2.8 2.1 1.4 0.7 0.0 0.0 0.0 0.0
Mustard oil[4] 5.0 2.1 1.8 1.5 1.2 0.9 0.6 0.3 0.0
Rape, colza other than low erucic and mustard oil and fractions, other 1514.99.90.00 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0
Lin seed oil 1515.11and 1515.19 5.0 3.2 1.6 0.0 0.0 0.0 0.0 0.0 0.0
Maize (corn) oil 1515.21 and 1515.29 5.0 5.6 4.8 4.0 3.2 2.4 1.6 0.8 0.0
Castor oil and its fractions 1515.30 5.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Sesame oil and its fractions 1515.50 40.0 40.0 40.0 40.0 40.0 40.0 40.0 40.0 40.0
Perilla oil and its fractions 1515.90.10.00 36.0 36.0 36.0 36.0 36.0 36.0 36.0 36.0 36.0
Rice bran oil and its fractions 1515.90.90.10 5.0 3.2 1.6 0.0 0.0 0.0 0.0 0.0 0.0
Camellia oil and its fractions 1515.90.90.20 8.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Jojoba oil and its fractions 1515.90.90.30 8.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Tung oil and its fractions 1515.90.90.40 8.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Vegetable fats and oils other 1515.90.90.90 8.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

The following highlight multiple HS codes pertaining to the general type of vegetable oil indicated above:

  1. 1512.11.10.00, 1512.19.10.10, 1512.19.90.10
  2. 1512.11.20.00, 1512.19.10.20, 1512.19.90.20
  3. 1514.91.10.00, 1514.99.10.10
  4. 1514.91.20.00, 1514.99.10.20

Conclusion

The South Korean vegetable oil market is expected to keep falling over the next five years. Yet, some markets such as the olive oil, and other edible oils subsectors are expected to grow over the next five years. Canola oil is expected to lose some market share, but at a slower rate than soy or corn oil.

Despite limited growth for canola oil due to consumer habits and market trends, there may be scope to substitute canola oil for other cooking oils (ie, to increase canola oil market share compared to other vegetable oils). This would require marketing efforts by the CCC to introduce new uses of canola oil or develop recipes especially incorporated into Korean dishes or that highlight health benefits.

There has been a large increase in new product launches and this indicates an opportunity for Canadian producers as canola products have been a high percentage of the new products being launched, especially if the products are offered as a gift set.

For more information

International Trade Commissioners can provide Canadian industry with on-the-ground expertise regarding market potential, current conditions and local business contacts, and are an excellent point of contact for export advice.

For additional intelligence on this and other markets, the complete library of Global Analysis reports can be found on the International agri-food market intelligence page, arranged by region.

For additional information on the Seoul Food & Hotel 2019, please contact:

Ben Berry, Deputy Director
Trade Show Strategy and Delivery
Agriculture and Agri-Food Canada
ben.berry@canada.ca

Resources

Sector Trend Analysis – Vegetable oils in South Korea
Global Analysis Report

Prepared by: Bliss Morgan, Global Analysis (Co-op student)

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