Korea will diversify wheat, corn and other grain import sources to Brazil, Switzerland, and Ukraine in order to purchase imports at cheaper prices, said Kim Jae-soo, president of the Korea Agro-Fisheries & Food Trade Corporation, better known as the aT .
“Through our organizational channel, we’re making contact with agents in Brazil, Switzerland, and Ukraine to import grain. We need to widen our import sources, including the United States, to build a regime to bring in grain at cheaper prices,” he said.
Korea, which registered a wheat and corn self-sufficiency rate of 0.8 percent in 2010, turns to almost all imports. The nation has also a bean self-sufficiency rate of a mere 8.7 percent.
The aT aims to raise the wheat, soybean, and corn self-sufficiency rate to 30 percent by 2015 through M&As of grain companies. The following are excerpts from an interview between NewsWorld and aT President Kim in which he spoke of the prospects of the Korean agro-fisheries food sectors and the globalization of Korean foods.
The Korea Food Show 2012 is the fourth one of its kind to explore the Korean food industry’s future vision and course. The fair took place at KINTEX, north of Seoul from May 8-10 under the theme “K-Food, Toward the Future and World.”
Question: What are the pros and cons the entry into force of the Korea-U.S. Free Trade Agreement (KORUS FTA) will have on the Korean agriculture sector?
Answer: The domestic agriculture field, which is weak competitively, is forecast to suffer losses from an influx of cheaper U.S. agricultural produce, but consumers are expected to benefit somewhat since they may buy U.S. agricultural produce at cheaper prices.
Regarding the expected benefits the Korean agriculture sector will receive from the KORUS FTA, Korean agricultural produce will likely be given wider entry access to the world’s biggest market. The boosting of exports will have an impact of indirectly contributing to meeting domestic supply and demand, stabilizing prices, and the development of the processing industry. The implementation of the KORUS FTA removes quarantine and other non-tariff barriers, expands exports, and expands cultural, diplomatic, and trade exchanges like the K-Pop fever, which are more likely to bring about a boost in the consumption of Korean foods.
Korea saw its agricultural exports to the United States rise from $500 million in 2010 to $600 million in 2011 and U.S. agricultural produce imports surge from $6 billion to $7.7 billion during the same period.
If Korea aggressively explores Korean agricultural produce tailored to meet local demands with a focus on quality and safety and beef up marketing activities, chances are high that the nation will export $700 million more in agricultural products to the United States, the world’s biggest agricultural produce importer and exporter.
Q: Of late, Korea’s agro-fisheries food exports are on the surge. What strategies are in place to achieve the target of exporting $10 billion during this year, up from last year’s $7.7 billion?
A: We strive to foster emerging markets such as China and ASEAN countries as core exporting markets by ramping up marketing activities and focusing our support in order to achieve the 2012 goal of exporting $10 billion.
The aT endeavors to make the 25 strategic exporting items including kimchi, ginseng, flowers, laver, and flatfish as globally recognized stars, as France and New Zealand each are synonymous with wine and kiwi fruit.
In order to boost the global recognition of Korean agro-fisheries foods by making the most of the Hallyu boom, we plan to employ star marketing activities like having the Wonder Girls act as public relations ambassadors of the agro-fisheries foods field.
Setting the target of exporting $10 billion is construed as symbolic and offensive moves to translate market-opening measures such as Free Trade Agreements into good opportunities to boost exports of agro-fisheries foods.
Korea has seen agro-fisheries food exports surging to some $1.8 billion in the first three months of this year, an 11 percent surge over the same period of last year. Fresh agricultural food and fisheries exports shot up 28 percent and 14 percent, respectively, with processed goods exports increasing 7 percent, surpassing the nation’s overall export growth rate of 3 percent. Paprika and flowers took the lead in the fresh agricultural good exporting segment with a sharp growth rate of 28 percent, while processed good exports have shown even growth rates overall. Tuna and laver products saw exports surging primarily, contributing to helping the fisheries food items chalk up $600 million in exports during the three-month period, up 14 percent over a year earlier.
In order to attain the goal of exporting $10 billion in goods, the aT is firing on all cylinders to swiftly cope with exporting condition changes, expand export growth momentum, and strengthen overseas marketing activities while having implemented country-by-country strategies to boost exports since this past January.
The aT, which has set a $3 billion export target, is striving to explore niche markets to export quality Korean foods to Japan in which public awareness over food safety has been mounting following the leakage of radioactive materials in 2011.
We aim to export $2 billion to the Chinese market during this year. On top of the existing focus on exporting processed foods to big cities in eastern and coastal areas, the aT is going to hold large-sized road shows to explore the potential of midwestern, inland areas and eastern regions. We plan to attach priority on exporting Korean foods to the Chinese premium segment by signing MOUs with Lotus and other distribution majors.
The aT aims to export $1.5 billion to the ASEAN countries. We plan to ramp up public relations and sales marketing activities on each country’s favorite items, including strawberries in Singapore, ginseng and winter mushrooms in Vietnam, sweet persimmon in Malaysia, infant formula milk powder in the Philippines, and laver in Thailand.
We plan to attain a $700 million export target to the United States, the world’s biggest market, by making the most of tariff-free measures and lower tariffs following the implementation of Korea-U.S. Free Trade Agreement. We strive to boost such mainstay exports as noodles, sauces, confectionaries, fish, fresh pears and seasoned laver. We plan to hold dietary culture events coinciding with the K-pop fever, tap the Hispanic market with a similar dietary culture and rising buying power, and strengthen marketing activities focusing on vendor-oriented U.S. distribution systems.
Q: The K-Pop rage has been evolving into the K-Food and K-Culture fevers. We have good opportunities to proliferate the Korean dietary culture. In this regard, do you have any plans in mind to globalize Korean foods?
A: Korean cuisine has become the subject of global attention in the wake of the K-Pop fever sweeping the United States, Europe, and South America beyond Southeast Asia.
As each country’s indigenous foods are national representative, value-added mainstay items, countries are putting forward their fullest efforts to cultivate their traditional foods as national strategic industries.
Accordingly, the globalization of Korean foods could lead to the Korean dietary culture’s inroads into overseas markets and the boosting of exports of agro-fisheries products and food materials, thus serving as opportunities to raise the nation’s global standing from the economic, cultural, and diplomatic perspectives. We have to make our utmost efforts to help Hallyu (Korean Wave), which started with K-pop and other cultural contents, to spread to Korean Food. Hallyu’s influence has had spill-over effects on upping the value of Korean agro-fisheries foods and realizing the ultimate goal of cultivating them into new growth engines.
The aT has so far redoubled efforts to improve Korean foods’ competitive edge by building Korean food infrastructure and a network, conducting R&D activities, cultivating Korean food manpower, and providing financial support to Korean restaurants here and abroad. These efforts have paid off to some extent.
A survey of New Yorkers on Korean foods conducted last year indicated that their approval rating of Korean foods soared from 9 percent in 2009 to 31 percent in 2011. The renowned French-born chef Pierre Gagnaire once called Korean food “a healthy cuisine with balanced nutrition.”
Even though K-Pop and K-Food have attracted the global limelight, the globalization of Korean foods still has a long way to go to meet foreigners’ tastes.
A report, recently released by the government, showed that Korean food placed 7th in the rankings of 12 countries, a sign there are still many evaluation categories such as cuisine, image, price, and services that need to be revamped.
The government and the private sector need to make concerted efforts to implement strategies from the long-term perspective without scurrying for short-term outcomes.