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South Korea imported nearly $20 billion in agricultural
goods in 2010, 4.7 percent of all its imports. Agricultural
exports were $3.1 billion. The United States is the
chief exporter to Korea, supplying a range of products,
with corn, meat, hides, soybeans, milling wheat, and
cotton among the major items. U.S.
agricultural exports to South Korea amounted to
$5.3 billion in 2010. Other important suppliers include:
- China: Feeds from starch and brewing residues, frozen
and preserved vegetables, rice, processed foods, soybeans
- Australia: Beef, wheat, sugar, dairy products
- European Union (EU-27): Pork, wine, processed foods,
dairy products
- ASEAN (Association of Southeast Asian Nations): Rubber,
palm oil, bananas, oilseed meals
- Brazil and Argentina: Soybeans, soymeal, soyoil
- New Zealand: Beef, dairy products, kiwifruit
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The Changing Pattern of Korea's
Agricultural Imports
Agricultural imports play a vital role in supplementing
South Korea's domestic supplies of food, feed, and raw
materials for processing. As the country became increasingly
industrialized and labor costs rose, South Korean agriculture
abandoned production of many crops, such as wheat, millet,
sorghum, and cotton. The small production of barley,
soybeans, and corn relies heavily on government subsidies
and protectionist trade policies. To keep the livestock,
flour milling, and export-oriented industries of textile,
garment, and leather goods in operation, Korea has to
import large quantities of feed grains, soybeans, wheat,
cotton, and hides.
This import pattern prevailed from the 1960s until the
late 1980s. Since then, new markets have emerged, in part
because of changes in economic structure and reduced trade
barriers. Korea's food sector increasingly reflects trends
seen in developed economies, in which convenience, attractive
marketing, and variety are key attributes; and animal
products and processed foods and beverages become steadily
more important in overall food consumption. As a result,
with the help of reduced trade barriers, Korea imports
a new set of products, and these emerging commodity markets
offer opportunities to U.S. exporters.
U.S. Trade With South Korea
The United States has been the chief source of Korea's
agricultural imports for decades. A close trade relationship
goes back to 1955, when U.S. grain exports under Public
Law 480 (P.L. 480) began—first as grants and then
extended to include credits and cash. By the early
1980s, when the final shipments under P.L. 480 were
delivered, South Korea was a top commercial market
for U.S. agricultural products. In 2009, South Korea
was the sixth-largest U.S. market overseas, purchasing
$3.92 billion in agricultural exports. Bulk and intermediate
inputs for processing—such
as cotton, hides, wheat, coarse grains, and soybeans—remain
important. In general, barriers against these input
products are low, but the potential for trade growth
is also low.
On the other hand, Korea's market for agricultural items
that are ready, or almost ready, for consumers to use
shows great promise. Trade barriers are generally high,
and third-country competition can be fierce, but U.S.
exports offer attributes that Korean consumers want:
low price, high quality, convenience, attractive packaging.
U.S. exports of consumer-ready products increased greatly
during the 1990s, as trade barriers fell and consumers'
incomes increased. Consumer-ready U.S. agricultural
exports rose from about $250 million in 1990—about
9 percent of total U.S. agricultural exports to Korea—to
about $760 million in 1997 (27 percent of the total).
These exports were affected more severely by Korea's
economic crisis in 1998 than were bulk and intermediate
exports. U.S. consumer-ready exports dropped to about
$385 million in 1998, and their share of total U.S.
exports to Korea in 1998 dropped to 17 percent.
The rapid recovery of Korea's economy lifted U.S. consumer-ready
exports to more than $1.4 billion in 2003—49 percent
of total U.S. agricultural exports to Korea. Trade
in beef disappeared in 2004 because of the discovery
of a case of Bovine Spongiform Encephalopathy (BSE,
or "mad
cow" disease) in a U.S. cow at the end of 2003.
In addition, poultry meat exports to South Korea suffered
from a temporary embargo on trade in 2004 after an outbreak
of Avian Influenza in the United States. Oranges, orange
juice, frozen vegetables—especially french fries—sweet
corn, and a large variety of processed foods and beverages
make up the rest of this trade. Trade in these products
continues to grow as Korea's economy expands. They
represented 33 percent of U.S. agricultural exports
to Korea in 2010.
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Among South Korea's leading Agricultural exports to
the United States in 2010 were ramen (instant noodles),
pears, and bean pastes, with U.S.
agricultural imports from South Korea totaling $298 million.
References
The Foreign Agricultural
Service (FAS) Office in Seoul, South Korea, provides
information and links about Korean agricultural trade.
Food and Agriculture Import Regulations and Standards 
is an annual FAS report that details current Korean rules affecting imports.
Exporter
Guide
is an annual FAS report that discusses Korea's markets
and how exporting firms do business there.
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