South Korea’s retail sector is currently going through a period of intense price competition. The growth in the country’s online retail sales is in stark contrast with the picture in offline sales, prompting retailers to seek out ways to ensure they maintain their market share. According to data published by the Korean Ministry of Trade, Industry and Energy, total retail sales rose by 6.8% in 2018. However, while online sales were up by 15.9%, offline sales inched up only 1.9%. Overall, online sales now account for 37.9% of the entire retail sales (+2.9%). The lower costs associated with online retail are allowing firms to reduce prices somewhat, thus fuelling ever more intense competition to win over price-conscious consumers.
Colombia’s fruit producers have set their sights on the markets of South Korea and China. Agriculture minister Juan Guillermo Zuluaga indicated his government’s intention to forge closer trade ties with these countries, where demand for high-quality tropical products is growing. With a Free Trade Agreement signed in 2016 with South Korea, Colombian delegations have been working hard to seal protocols that will allow the entry of several of its products. Indeed, Colombian exports to South Korea rose 44% between 2010 and 2017, to US$104m. As for China, Colombian exports of agricultural products reached US$177m between 2010 and 2017, a dramatic rise from the US$19m total for the 2022-2009 period.
The Fruitnet Forum Colombia is a new two-day event taking place in Bogotá on 26th-27th June. The conference will feature presentations by major importers from both China and South Korea.
In a meeting between Chile’s main agricultural bodies, representatives of ASOEX pushed for the speeding up of the process of Chilean pears entering China and its avocados entering South Korea. The meeting also discussed the progress of exports of Chilean avocados and blueberries to the Indian market, an agreement that was signed in April 2017 by the Assistant Secretary of Agriculture and the Joint Secretary of the Ministry of Agriculture of India, Ashwani Kumar
Another issue of concern expressed by fruit exporters was the lack of access for Chilean fruits to the Port of Jakarta in Indonesia, a situation that has persisted for about six years, damaging the competitiveness of Chilean fruits, which are forced to enter through the ports of Surabaya and Belawan, over 1,000 km from the main centres of fruit commercialisation. Another subject analysed during the meeting regarded accelerating negotiations to increase the supply of fruits to Vietnam, since only table grapes are currently authorised.
In 2014, Korea’s fruit consumption per capita, including imported fresh oranges, increased to 66.5 kg due to consumer preferences for more fresh fruit in the diet. However, over the last 10 years the consumption has still been below the international recommended quantities. A sharp decline is noted in consumption of the locally produced ‘Singo’ pears, which were also exported to the U.S. in the past.
Korea’s fruit imports have increased steadily after implementing many free trade agreements (FTAs) since 2003. Its nine major fruit imports, including oranges and table grapes, increased by 4% (24,000 tons) to 615,680 tons during the first 10 months of 2015 compared to the same period in 2014.
In 2016, Korea is still imposing a 10% seasonal tariff on U.S. fresh oranges from March to August under the KORUS FTA; the tariff will be eliminated in 2018. In the marketing year 2015/16, fresh orange imports are expected to increase by 7.5 percent to 120,000 tons, a 9,000 ton increase on the previous crop year, mainly due to the end of the west coast port strike in the U.S. and improved quality for this year’s fruit. The U.S. is the major orange supplier to the Korean market with a 93% market share in the sales year 2014/15, followed by South Africa and Spain with 4% and 2% respectively.
This article appeared on page 18 in the News section of edition 141, Jan/Feb 2016, of Eurofresh Distribution magazine. Read that issue online here.
South Korea flag image: by various [Public domain or Public domain], via Wikimedia Commons