November 7, 2006

 

Aquaculture and imports cater to South Korean seafood demand

 

 

Close to 40 percent of South Korean's seafood production in 2005 is derived from shallow sea aquaculture according to a USDA Global Agriculture Information Network (GAIN) report released last week.

 

South Korean seafood production increased to 8 percent in 2005, mainly due to advances in shallow-sea aquaculture, the report said.

 

Despite the increase, the country's seafood imports are now twice its exports in value. Imports reached US$2.4 billion in seafood in 2005 up 5 percent from 2004, according to figures from the report.

 

Imports are expected to continue to outpace exports in South Korea's seafood market, ensuring that the country would remain an important market for seafood suppliers.

 

For 2006, total imports of seafood are expected to increase by about 10 percent to US$2.5 billion, the report said.

 

Although production from shallow-sea aquaculture increased this year, it is a far cry from several years ago when average annual production was over 3 million tonnes, the report added.

 

The report predicts that South Korean domestic fishery production would remain stagnant due to sharp reductions in fish resources and the enforcement of Exclusive Economic Zones by neighbouring countries.

 

The fishery industry has also shrunk in the past 5 years, reflecting the reduction in fishery resources. The government has also accelerated the downsizing of the fishing fleet and is undertaking an in-depth study of aquaculture, the USDA report noted. 

 

Production of aquaculture contributed strongly to an increase in total production in 2005 over 2004, thanks to favourable policies  for aquaculture in shallow sea areas, the report said. 

 

The USDA expects shallow sea aquaculture to continue to increase in the future due to tighter restrictions on fresh water aquaculture and expectations of continuing reductions in wild catches.

 

To protect the local market, mainly from Chinese imports, the government has set higher tariffs for ten fish species. It is also working to purchase fish quotas from other countries, including Russia and exchange agreements with China, the report said.

 

South Koreans are also high-volume consumers of seafood. Average monthly household expenditure in urban areas on fishery products was US$34 and per capita seafood consumption was 48.6 kg, according to figures obtained by the USDA.

 

Alaska Pollack, squid, mackerel and hair tail were the most popular species.

 

The country's efforts to change consumer perception of fish as a healthy alternative to red meat, diversify fish products, improve quality, and develop processing technology is expected to boost local demand.

 

However, the report warned that the tendency of South Korea's media to sensationalize food-related news guarantees that any disease or chemical residues in aqua-cultured seafood would be widely reported and lead to a sharp fall in consumption.

 

The largest seafood export market for South Korea in 2005 was Japan at US$741 million, followed by China at US$108 million, and the US at US$88 million.

 

Other countries include New Zealand, EU and Thailand, the report said. 

 

South Korean importers purchase fish from the United States with the product to be processed in China, or other countries for transformation into fish fillet and imitation crabmeat. These processed products are then exported.

 

USDA also notes that South Korea has a dozen fish processing plants in China, due to the lower cost of labour.

 

Major suppliers of seafood to South Korea include China, Russia, Japan, Vietnam, the United States and Thailand.

 

Imports of seafood are relatively easy compared to other food and agricultural products, as no special certificates are required.

 

Demand for certain species can develop rapidly for new products in South Korea. The report cited an example, several years ago, when no demand existed for Jerk filefish. Now, processors have developed a dried snack product based on the species and consumption of the product has reached the point where US$26 million worth of prepared Jerk filefish, mostly from Vietnam, are imported.

 

The USDA report noted that The Busan International Seafood & Fisheries Expo (BIFSE) 2006, to held in the BEXCO convention centre in Busan from November 16-19, 2006 would be an excellent opportunity to explore opportunities in South Korea. The annual show targets importers, wholesalers and distributors and is currently the only USDA-supported seafood show in the country.

 

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