Trends and opportunities The Korean aquaculture and seafood market 2011
The aquaculture industry in Korea is faced with many challenges nowadays. Requirements for advanced technology and equipment is gaining momentum, in order to reduce the production cost and increase efficiency. A comprehensive review and analysis of the Korean aquaculture industry made by Innovation Norway Korea in 2005 has identified seven areas as opportunities for Norwegian companies.
The aquaculture industry in Korea is faced with many challenges nowadays. Requirements for advanced technology and equipment is gaining momentum, in order to reduce the production cost and increase efficiency. A comprehensive review and analysis of the Korean aquaculture industry made by Innovation Norway Korea in 2005 has identified seven areas as opportunities for Norwegian companies.
Korea is also an emerging market for Norwegian seafood exporters. A Free Trade Agreement between Korea and the EFTA countries is expected to come into force by July 2006, Upon commencement, the EFTA countries and Korea shall abolish most of the customs duties on industrial products and marine products imports (407 seafood products). As an example, fresh salmon, trout and cod, will enjoy zero custom duties/tariffs from day one, for frozen salmon the tariff will be gradually reduced to zero.
Korea is one of the world’s major fishing nations, ranking 12th largest in marine fishery production and 6th in aquaculture. In 2004, total production volume was 2.5 million tons, of this total fisheries production in coastal and deep-sea water contributed to 63% of industry’s total production, 37% came from aquaculture.Â
Since the peak of overall fish catches in 1986, the Korean fishery industry’s catches have declined as a result of overfishing in the Korean coastal waters and tighter quotas internationally.Â
On the other hand, the seafood consumption is increasing. Koreans consumed 4.2 million tons of seafood in 2005 (approx. 49 kg per person) - among the highest in the world. The fishing industry is unable to meet domestic demand, and consequently has led to the development of fish farming and import of large amount of fish and fish products from other countries.
Major trends in Aquaculture
Total aquaculture production was 933 thousand tons in 2004, contributing 37% of total production. Marine aquaculture is the most active type of farming in Korea. Total license area for marine aquaculture is about 122,000 ha in sea water surface and 2,000 ha for land-based farming.
The major species of Korean aquaculture are seaweed, shellfish and finfish. Seaweed and shellfish account for more than 90% of total aquaculture production, and marine finfish represents only 7%. However, marine finfish farming is growing and gaining attention from government and industry, and it is becoming an important part of the Korean aquaculture industry today. Also, there is an increasing demand in the research sector for the diversification of artificial breeding for high value marine fish species. There are approx. 10 species currently employed for marine aquaculture, Flounder, Black Rockfish, Sea Bream, Sea Bass and Yellow tails are the most important species farmed.
Aquaculture industry in Korea is faced with many challenges nowadays. Reduction in the overall output due to the environmental problem in coastal area is caused mainly by the use of moisture pellet feeding and disease, and increased import of live fish from China is high on the agenda. These challenges demand changes and they are now taking place rapidly. There is a growing demand for restructuring in the aquaculture sector as it is fragmented with small units. Requirements for advanced technology and equipment is gaining momentum, in order to reduce the production cost and increase efficiency.
Norwegian experience in aquaculture business such as hi-tech equipment, high efficiency of management skill and global market network is strongly needed and there is a growing interest to adopt relevant solutions into Korean aquaculture industry. Based on a comprehensive review and analysis of the Korean aquaculture industry in 2005 by Innovation Norway Korea, the following areas have been identified as opportunities for Norwegian companies:
• offshore cage,
• automated system,
• processing systems & equipment
• traceability systems
• grow-out feeds
• high value species
• aquaculture consulting services.Â
Major trends in Seafood
Seafood is the most traditional food source in Korea, fish being one of the items consumed on a daily basis. The demand for seafood has grown rapidly during last two decades as the economy developed and people’s standard of living increased. There is also an increasing demand for new and high-value species. For example, foreign species such as salmon and Atlantic cod, and imported seafood species are on the rise, e.g. lobster, king crab, etc.Â
Import of fishery products have increased, this is mainly due to the decreasing fish stock in Korea’s coastal waters and the growing domestic demand. Total seafood imports in 2005 was 1.1 million tons valued at US$ 2 billion, mainly from China, Russia, Japan, USA, Vietnam and Thailand. Korea is an emerging market for Norwegian seafood exporters to Asia. Total Norwegian seafood export to Korea in 2005 was 14,100 tons at a value of US$ 25 million. Norway is the 9th largest exporter of fishery products to Korea.
Salmon and Mackerel are the major fish species imported from Norway, hereof salmon import from Norway was 4,869 tons valued at US$ 20 million in 2005. Particularly, Norwegian salmon has a dominant position in the market, taking 99% market share for fresh salmon and about 58% of frozen salmon. Frozen salmon is mainly used as raw material for the smoking industry in Korea.Â
Norwegian seafood has a very good reputation in Korea related to quality and hygiene standards. This could contribute to further expansion of seafood export to Korea for new species and products, such as cod, king snail, among others.Â
Bilateral agreements and FTA: New opportunities for Norwegian Businesses in Korea
The Agreement on Fisheries Co-operation between Norwegian Ministry of Fisheries & Coastal Affairs and Korean Ministry of Maritime Affairs and Fisheries was signed on the 24th January, 2002. The agreement seeks to strengthen bilateral ties between the countries, hereto also enhance cooperative activities related to the exchange of scientists and scientific information, and other activities related to research fields in marine biotechnology and fisheries resource management.
A Free Trade Agreement (FTA) was signed in December 2005 between Korea and the EFTA countries. It is expected to come into force by July 2006, after ratification in EFTA countries and Korea. Upon commencement, the EFTA countries and Korea shall abolish most of the customs duties on industrial products and marine products imports (407 seafood products). As an example, fresh salmon, trout and cod, will enjoy zero custom duties/tariffs from day one, for frozen salmon the tariff will be gradually reduced to zero.
The FTA is a milestone that is expected to greatly strengthen the bilateral trade between Korea and Norway, particularly in the marine area, where Norwegian seafood competitiveness will be significantly increased with the abolishment of customs and tariffs.Â
Innovation Norway Korea has strong competence and long experience in the marine sector. We have assisted Norwegian Seafood Export Council (NSEC) in marketing activities to increase the interest of Norwegian seafood in Korea for the past 8 years and also worked with and for several Norwegian companies, government institutions and universities to develop activities and opportunities for Norwegian business interests.
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