Seafood to Korea

(Last updated: 30 July 2007)

Trends and opportunities

The market

There are two major developments that are increasing opportunities for Australian importers to increase their supply of bulk frozen fish as well as the preferred high-end species. Firstly, large fishing companies and seafood processors are moving quickly to improve their intake and processing facilities for locally caught and imported live, fresh, chilled and frozen seafood. Secondly, better storage facilities, improved distribution and increased imports are also transforming the market, making it easier to import frozen and chilled seafood.

In 2001, Korean exports of seafood were greater than imports. However, as of 2005 Korean imports of seafood exceeded exports by $1.2 billion. Furthermore, this trend has continued, with imports continuing to outpace seafood exports.

Opportunities

Australian companies should position themselves as high-end suppliers and target hotel restaurants, therefore differentiating themselves from bulk imported seafood items from competitor countries. The best opportunities for Australian suppliers are:

• live rock lobster and frozen lobster tails
• chilled or frozen abalone
• chilled eels
• chilled fish such as tuna
• frozen half shell scallop
• live yabbies
• frozen prawns

Competitive environment

Competitive countries include Russia, USA, China and Japan. The most popular imported frozen seafood's are croakers, Alaskan pollack, pollack caviar and octopus from Russia and China.

Korea has joint fishery agreements with the USA, Canada and Russia and imports considerable quantities of frozen seafood from these partner countries. China and Japan are also major suppliers due to their geographical proximity and similar species.

The preferred fish in Korea are croakers, followed by ribbonfish, mackerel and squid but due to a lack of domestic supply large amounts are imported from China due to its price competitiveness and cheap freight cost.

Tariffs, regulations and customs

Imports into Korea are controlled by the Ministry of Commerce, Industry and Energy and import duties generally range from 10-30 per cent:

• Most live or frozen fish and frozen fish fillets – 10 per cent
• Fresh or chilled fish, dried, salted or smoked fish, crustaceans and molluscs – 20 per cent
• Processed seafood items such as prepared or preserved fish, including canned products, seafood extracts or juices – 30 per cent.

Industry standards

All fishery products are subject to sanitary inspection. The National Fisheries Product Inspection Station inspects live, chilled, frozen, salted, smoked and dried finfish, shellfish and crustaceans, while the Korea Food and Drug Administration inspects further processed seafood products such as fish paste products and canned, bottled and seasoned products.

Marketing your products and services

Market entry

Australian seafood is perceived as coming from a clean and unpolluted environment and being of premium quality. This image is ideally suited to servicing the high end of the Korean market and suppliers should use this as an advantage when entering the market.

A key to success in this market is the identification of an experienced importer who specialises in importing chilled products and has established distribution channels to hotels and high-end restaurants. They must have a proven track record and be well connected in the industry.

In negotiating with Korean importers, it is very important to be able to provide details on mortality rates and packaging conditions. Experience has shown that in negotiations with potential importers these issues need to be understood and responsibilities resolved.

Australia is known as a supplier of quality chilled fish species such as yellow fin, big eye, salmon, eels and southern blue fin tuna. Other competitive seafood items include live sea urchin, abalone, rock lobsters and prawns. Even though North American lobsters enjoy a higher market share due to their cheaper price, some top-level hotels in Korea have started to recognise the quality difference between Australian and North American lobsters. Australian exporters should exploit these improving perceptions of Korean end-users of seafood.

However, there are still several issues for Australian seafood suppliers to overcome:

• High ocean freight rates compared to the USA and Canada, which are major competitors for lobsters.
• The different shape of Australian seafood species does not match well with the purchase criteria of Korean seafood importers.
• Australia lacks price competitiveness for popular frozen fish species such as pollack, hair-tail and mackerel.

Distribution channels

The National Federation of Fisheries Cooperative (NFFC) is the only national network responsible for fish catching and distribution. NFFC also provides finance to its members.

Several local governments operate medium to large-scale agro-fisheries markets.

Traditional wet markets still exist, but suppliers of quality products should concentrate their efforts on more modernised distribution channels such as supermarkets, department stores and tourist hotels and restaurants.

Links and industry contacts

Seafood–related resources

National Federation of Fisheries Cooperative – www.suhyup.co.kr

Government, business and trade resources for Korea

Ministry of Commerce, Industry and Energy – www.customs.go.kr
Ministry for Food, Agriculture, Forestry and Fisheries – www.mifaff.go.kr

Media

Foodnews – www.foodnews.co.kr