Republic of Korea Fishery Industry Profile - Post Harvest Sector by GLOBEFISH

Republic of Korea - Fishery Industry Profile, Post Harvest Sector

GLOBEFISH RESEARCH PROGRAMME

Republic of Korea Fishery Industry Profile Volume 88

Food and Agriculture Organization of the United Nations Fishery Industries Division Viale delle Terme di Caracalla 00100 Rome, Italy Tel.: +39 06 5705 5074 Fax: +39 06 5705 5188 www.globefish.org

Post Harvest Sector

Volume 88

Republic of Korea Fishery Industry Profile Post Harvest Sector by

Professor Seong-Kwae Park Pukyong National University Chairman Jai-Dong Roh Luckysusan Co., Ltd

(December 2006)

The GLOBEFISH Research Programme is an activity initiated by FAO's Fishery Industries Division, Rome, Italy and financed jointly by: -

NMFS (National Marine Fisheries Service), Washington, DC, USA FROM, Ministerio de Agricultura, Pesca y Alimentación, Madrid, Spain Ministry of Food, Agriculture and Fisheries, Copenhagen, Denmark European Commission, Directorate General for Fisheries, Brussels, EU Norwegian Seafood Export Council, Tromsoe, Norway OFIMER (Office National Interprofessionnel des Produits de la Mer et de l’Aquaculture), Paris, France VASEP, Viet Nam Association of Seafood Exporters and Producers, Viet Nam ASMI (Alaska Seafood Marketing Institute), USA DFO (Department of Fisheries and Oceans), Canada SSA (Seafood Services Australia), Australia

Food and Agriculture Organization of the United Nations, GLOBEFISH, Fishery Industries Division Viale delle Terme di Caracalla, 00153 Rome, Italy – Tel.: (39) 06570 56244 E-mail: GLOBEFISH@fao.org - Fax: (39) 0657055188 – http//:www.globefish.org

The designation employed and the presentation of material in this publication do not imply the expression of any opinion whatsoever on the part of the Food and Agriculture Organization of the United Nations concerning the legal status of any country, territory, city or area or of its authorities, or concerning the delimitation of its frontiers or boundaries.

Professor Seong-Kwae Park & Chairman Jai-Dong Roh Republic of Korea - Fishery Industry Profile - Post Harvest Sector GLOBEFISH Research Programme, Vol. 88. Rome, FAO. 2006. 72p. The objective of this report is to give a comprehensive overview of the Korean post harvest fishery sector and to highlight the latest trends in production, processing, trade and distribution. The report gives an overview of the seafood processing industry describing production items, current tendencies in the product range and main policies. An analysis of seafood demand and consumer preference is included.

Korean consumers tend to show a preference for higher-valued fish such as king crab, salmon and shrimp of which most are imported from other coastal states. China is the largest seafood exporter to ROK, while Japan is the largest importer of Korean seafood. During nearly half a century the fisheries sector of ROK has realized trade surplus, but from 2001 the trade balance was reversed, resulting in a huge trade deficit of US$1.2 billion. The rules and regulations of seafood trade, for instance, tariff structure, safety and inspection, are outlined in this report. The domestic distribution systems are explained with an overview of distribution channels and major entities such as fisheries cooperatives, collectors, wholesale markets, middle wholesalers and middlemen. The last part of this report provides statistics and information on processed seafood by category, consumer purchase patterns and preferences, as well as seafood distribution. The annex includes detailed information on importers, exporters, government institutions, cooperations and associations Cover Photo: “Fish Market of Yeosu”, Republic of Korea, Courtesy of Yoran Guenegou

All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any means, electronic, mechanical, photocopying or otherwise, without the prior permission of the copyright owner. Applications for such permission, with a statement of the purpose and extent of the reproduction, should be addressed to the Director, Information Division, Food and Agriculture Organization of the United Nations, Viale delle Terme di Caracalla, 00153 Rome, Italy.

TABLE OF CONTENTS 1.

INTRODUCTION ........................................................................................................... 3 1.1

Geography of Korea............................................................................................... 3

1.2

Population ............................................................................................................... 3

1.3

Economic Affairs .................................................................................................... 5

FISHING INDUSTRY .................................................................................................... 6 2.1

Households Dependant on Fisheries and Population.......................................... 6

2.2

Fishing Vessels ........................................................................................................ 7

2.3

Production............................................................................................................... 8 2.3.1 Production by Fisheries ..................................................................................... 8 2.3.2 Aquaculture Production: Flat fish••Black Rockfish••Rainbow Trout .......... 10 2.3.3 Average Productivity........................................................................................ 11

PROCESSING INDUSTRY ......................................................................................... 14 3.1

Category of Processed Seafood ........................................................................... 14

3.2

Production and Trade of Processed Seafood ..................................................... 14

3.3

Some Important Policies...................................................................................... 18 3.3.1 Government Financial Support ...................................................................... 18

CONSUMPTION........................................................................................................... 21 4.1

General Food Consumption Trend ..................................................................... 21

4.2

Seafood Consumption Pattern ............................................................................ 22

4.3

Determinants of Seafood Consumption ............................................................. 23

4.4

Consumption Pattern and Consumer Preference ............................................. 24

iii

TRADE OF SEAFOOD ................................................................................................ 26 5.1

Export and Import ............................................................................................... 26

5.2

Major Export and Import Countries ................................................................. 29

5.3

Trade Determinants ............................................................................................. 30

5.4

Fish Products from North Korea ........................................................................ 31

5.5

Lowering Self-Sufficiency Level and Increasing Import Potential ................. 31

5.6

Free Trade Agreement (FTA) .............................................................................. 32

RULES AND REGULATIONS OF SEAFOOD TRADE .......................................... 34 6.1

Tariff...................................................................................................................... 34 6.1.1 Tariff Structure................................................................................................. 34 6.1.2

6.2

Adjustment Tariff....................................................................................... 35

Seafood Safety Sanitary Inspection .................................................................... 35 6.2.1 Country of Origin Labeling (COOL) ............................................................. 35 6.2.2 Hazard Analysis Critical Control Point (HACCP) ....................................... 35 6.2.3 Inspection .......................................................................................................... 36

DISTRIBUTION AND MARKETING SYSTEM ...................................................... 39 7.1

Distribution Channels of Domestic Fish ............................................................ 39

7.2

Distribution Channels of Some Important Fish Species................................... 40 7.2.1

Domestic Mackerel / Squid (Fresh) .......................................................... 40

7.2.2

Domestic Squid (Frozen) ........................................................................... 41

7.2.3

Frozen Distant-Water Squid ..................................................................... 42

7.2.4

Farmed Flat fish (Live)............................................................................ 43

7.3

Direct Marketing .................................................................................................. 44

7.4

Wholesalers ........................................................................................................... 45

7.5

Retailers ................................................................................................................ 46

7.6

Main Government Policies .................................................................................. 46

7.6.1

Government and Private Purchases for Price Stabilization................... 46

7.6.2

Expansion of Distribution Facilities ......................................................... 48

7.6.3

Facilitation of Distribution Functions ...................................................... 48

IMPORTANT INSTITUTIONS................................................................................... 50 8.1

Fisheries Administration ..................................................................................... 50

8.2

Trade...................................................................................................................... 50

8.3

Safety and Quality Control.................................................................................. 51

8.4

Research and Development ................................................................................. 51

8.5

Distribution and Marketing ................................................................................ 52

8.6

Information of Seafood Price and Trade............................................................ 52

TABLES

Table 1: Total Population and Growth Rate ......................................................................... 4 Table 2: Population by Age..................................................................................................... 4 Table 3: Households Dependant on Fisheries and Total/Female Population..................... 6 Table 4: Fishing Population by Sex and Age......................................................................... 7 Table 5: Fishing Vessels by Fisheries ..................................................................................... 8 Table 6: Catch and Value by Fisheries .................................................................................. 9 Table 7: Production by Main Species .................................................................................... 9 Table 8: Major Sea-Farmed Fish Production ..................................................................... 10 Table 9: Fresh Water Farmed Fish Production (2005) ...................................................... 11 Table 10: Catch per Unit Effort (CPUE, GT) ..................................................................... 12 Table 11: Production of Processed Seafood......................................................................... 15 Table 12: Production by Canned Seafood Item .................................................................. 16 Table 13: Market Share of Canned Tuna by Processing Firm .......................................... 16 Table 14: Export of Processed Seafood ............................................................................... 17 Table 15: Import of Processed Seafood ............................................................................... 17 v

Table 16: Support for Seafood Processing Sector............................................................... 19 Table 17: Conventional Seafood Certification .................................................................... 19 Table 18: General Seafood Certification ............................................................................. 20 Table 19: Specialty Seafood Certification ........................................................................... 20 Table 20: Per Capita Annual Food Consumption .............................................................. 21 Table 21: Consumption Pattern of Major Species.............................................................. 23 Table 22: Expenditure Elasticity.......................................................................................... 24 Table 23: Source of Purchased Seafood............................................................................... 24 Table 24: Reason for Visiting the Purchase Stores ............................................................. 25 Table 25: Priority of Consumer Seafood Choice ................................................................ 25 Table 26: National vs. Fisheries (Export and Import) ....................................................... 26 Table 27: Export/ Import of Fishery Products, 2004/2005 ................................................ 27 Table 28: Import of Fishery Products ................................................................................. 28 Table 29: Export by Main Fish Products ............................................................................ 28 Table 30: Import by Origin .................................................................................................. 29 Table 31: Korean Exports to Major Countries................................................................... 30 Table 32: North Korean Seafood in South Korea............................................................... 31 Table 33: Seafood Self-Sufficiency....................................................................................... 31 Table 34: Tariff Items (2006) ................................................................................................ 34 Table 35: Average Tariff Rates (2006) ................................................................................. 34 Table 36: Inspection of Imported Seafood .......................................................................... 37 Table 37: Disqualified Volume and Value by Country (2005) ........................................... 38 Table 38: Flat Fish Trade Volumes of Major Live-Fish Markets by Regions (2005) ...... 44 Table 39: Flat Fish Sales Volumes of Live-Fish Markets by Purchasers.......................... 44 Table 40: Trade Quantity of Fisheries Wholesale Markets (Legal Persons).................... 45 Table 41: The Government Purchase .................................................................................. 47 Table 42: 2004 Government Support for Distribution Facilities ...................................... 48 Table 43: Projects and Funds of Fisheries-Specific R&D.................................................. 52

CHARTS

Chart 1: Age Structure, Change of National Population..................................................... 4 Chart 2: Age Structure, Change of Fishing Population....................................................... 7 Chart 3: Catch by Unit Effort (CPUE) Trend .................................................................... 12 Chart 4: Canned and Frozen Seafood Production Trend.................................................. 15 Chart 5: Main Food Consumption Pattern......................................................................... 22 Chart 6: Seafood Export/Import Trend .............................................................................. 27 Chart 7: Imported & Disqualified Seafood......................................................................... 38

FIGURES

Figure 1: General Distribution Channels of Seafood......................................................... 39 Figure 2: Distribution Channels of Domestic Mackerel and Squid (Fresh) .................... 41 Figure 3: Frozen Domestic Squid Distribution Channels.................................................. 42 Figure 4: Flat Fish Distribution Channels .......................................................................... 43

INDEX OF ANNEX

ANNEX A: FISHERIES POLICY....................................................................................... 54 Table 1: Fishing Vessel Buyback Program and Crew Support

ANNEX B: CATEGORIES OF PROCESSED SEAFOOD............................................... 55 Table 2: Frozen Seafood Table 3: Dried Seafood Table 4: Salted Seafood Table 5: Canned Seafood Table 6: Fish Pastes Table 7: Smoked Seafood vii

Table 8: Fermented Seafood Table 9: Flavor-Seasoned Seafood

ANNEX C: CONSUMER PURCHASE PATTERNS AND PERFERENCES................. 58

Table 10: Frequent Purchase Items Table 11: Frequent Purchase Items in Summer Table 12: Frequent Purchase Items in Winter Table 13: Purchase Type Table 14: Price Satisfaction Table 15: Quality Satisfaction Table 16: Frequency of Packed Seafood Purchase Table 17: Reason for not Purchasing Unpacked Seafood Table 18: Preference on Chilled/Frozen Seafood Table 19: Reason for Fresh/Chilled Seafood Table 20: Frequency of Consuming Processed Seafood Table 21: Reasons for Consuming Processed Seafood Table 22: Seafood Cuisine Preferred Table 23: Confirmation of the Origin of Country Labeling Table 24: Preference of Wild or Farmed Fish Table 25: Reason for Preferring Wild to Farmed Fish Table 26: Seafood Good for Health

viii

ANNEX D: TRADE .............................................................................................................. 64 Table 27: Tariff Structure (2006) Table 28: Adjustment Tariff Rates (2006) Table 29: Distant-Water Fisheries Exports by Main Species Table 30: Seafood Exported to Japan by Main Species Table 31: Seafood Import from China by Main Species Table 32: Export Forecast of Major Fish Species Table 33: Import Forecast of Major Fish Species Table 34: Self-Sufficiency Forecast of Major Fish Species

ANNEX E: SEAFOOD DISTRIBUTION........................................................................... 69 Table 35: Standard Shipment Items and Distribution Standards Table 36: Fisheries Production and Sale through Fisheries Cooperatives

ANNEX F: USEFUL ADDRESSES ..................................................................................... 71 List of Government Institutions List of Fishery Cooperative, Association and Corporation List of Seafood Importers and Agents List of Seafood Exporters

EXECUTIVE SUMMARY The drastic structural transformation of Korean economy for the last half a century and the recent progress of globalization have facilitated the Republic of Korea (ROK) to involve in the ever-expanding world trade. In addition, economic growth and structural change in population and lifestyles have led to changes in Korean food consumption patterns. Before the UN convention on the law of the sea came into force in 1994 and the fisheries agreements among ROK, China and Japan (ROK-Japan in 1999, ROK-China in 2001, and China-Japan 2000) came into force, ROK was in the top ten of worldâ&#x20AC;&#x2122;s fishing countries. Korea is still one of the major producers, consumers and traders of seafood in the world. The objective of this report is to give a comprehensive overview of the Korean post harvest fishery sector and to highlight the latest trends in production, processing, trade, distribution and institutions. It briefly describes basic properties of the nation: geography, population and economic affairs as well as explains the national capture and aquaculture fisheries. Capture production is represented by the major commercial fish species such as mackerel, squid, anchovy and hair tail, while the main sea farming species include flat fish, black rockfish and rainbow trout. The report gives an overview to the seafood processing industry describing production items, current tendencies in the product range and main policies. The moves toward value-added products, wider range of assortment/quality/safety oriented production and technological innovations are some of the main directions on the agendas of seafood processors nowadays. An analysis of seafood demand and consumer preference is included showing among other things that mackerel, squid and anchovy are the three mass production/consumption species. In recent years, Korean consumers tend to show a preference for higher-valued fish such as king crab, salmon and shrimp of which most are imported from other coastal states. The report also describes international trade of seafood with an overview of the main items and countries. China is the largest seafood exporter to ROK, while Japan is the largest importer. During nearly half a century the fisheries sector of ROK has realized trade surplus, but from 2001 the trade balance was reversed, resulting in a huge trade deficit of US$1.2 billion. The rules and regulations of seafood trade, for instance, tariff structure, safety and inspection, are outlined in this report. ROK operates two tariff systems: basic and elastic tariffs. Now, the average tariff rate is about 18% for 407 items of HS 10. However, ROK applies adjustment tariffs of a range of 2363% to 10 imported fish and fish products which have serious influence on some domestic fisheries. The domestic distribution systems are explained with an overview of distribution channels and major entities such as fisheries cooperatives, collectors, wholesale market, middle wholesalers, and middlemen. In particular, there are two types of fish wholesale markets, which play crucial roles in 1

distribution of fish and fish products in ROK: one is the landing-port wholesale fish markets operated by fisheries cooperatives and the other is the consumption-area wholesale market. The last part of this report provides statistics and information on the vessel buyback program, processed seafood by category, consumer purchase patterns and preferences, trade (tariff structure, adjustment tariff rates, etc), and seafood distribution. In the annexes A, B, C, D, and E. Annex F includes detailed contact information on government institutions, cooperatives, associations, corporations, importers and exporters.

INTRODUCTION

1.1

GEOGRAPHY OF KOREA

Republic of Korea (ROK, hereafter Korea) lies adjacent to China and Japan. The northern border of Korea is formed by the Amrok-gang (Yalu river) and Tuman-gang (Tuman river) which separate it from Manchuria. The 16 kilometer segment of the Tuman-river to the east also serves as a natural border with Russia. The west coast of the Korean Peninsula is bounded by the Korea Bay to the north and the Yellow Sea to the south; the east coast is bounded by the East Sea. Two hundred kilometers separate the peninsular from eastern China. The Japanese islands of Honshu and Kyushu are located 206 kilometers to the southeast, just across the Korean Strait. The total area of the peninsula, including the islands, is 222 154 square kilometers of which about 45 percent (99 313 square kilometers), excluding the area in the Demilitarized Zone (DMZ), constitutes the territory of South Korea. There are about 3 000 islands belonging to Korea. The islands are located mostly around the Yellow Sea; only a handful of them lie off the East Sea. Ullungdo, the largest island in the East Sea, serves as a major fishery base as does Tokdo. The ocean of surrounding the Korean peninsular is one of the most productive fishing grounds in the world. In fact, the ocean consists of three seas: the East Sea, the West Sea and the South Sea. The West and the South Seas have a vast continental shelf which provides fish with favorable food chains and habitats. The East Sea is very deep, but it is an up-welling area and a productive fishing ground, which are formed there by the encountering of cold and warm currents. 1.2

POPULATION

As of November 1, 2005, the total population of South Korea was 47 278 951, an increase of 2.5 percent over 2000 year. For the last five years the average annual population growth rate showed 0.5 percent and its structure changed to a jar (2000s) type from a pyramid type (1990s). The population of 0-14 years has declined since 1970, while the aged population older than 65 has increased over time. Such structural change of population gives rise to serious socio-economic problems, which induce an issue of weakening the economic growth potential. A major source of the growth in market demand for food is the population shift from rural to urban.

Table 1:

Total Population and Growth Rate

(Unit: thousand, %) Census

Total population

Growth rate

Census year

Total population

Growth rate

2005

47 279

0.5

1970

31 466

1.4

2000

46 136

0.7

1966

29 193

2.6

1995

44 609

0.5

1960

24 989

3.0

1990

43 411

1.4

1955

21 526

1.1

1985

40 448

1.6

1949

20 189

4.0

1980

37 436

1.5

1944

16 565

1975

34 707

2.4

Source: Korea National Statistical Office (www.nso.go.kr). Table 2: Population by Age (Unit: thousand, %) Age

1995

2000

2005

0-14

10 236(23.0)

9 639(21.0)

8 986(19.1)

15-64

31 678(71.1)

32 973(71.7)

33 690(71.6)

> 65

2 640( 5.9)

3 372( 7.3)

4 365( 9.3)

Source: Korea National Statistical Office (www.nso.go.kr). Chart 1: Age structure Change of National Population

40000

Population(thousand)

35000 30000 25000 20000 15000 10000 5000 0 1995

2000

2005

Age Y(0-14 y rs)

M (15-64y rs)

O(> 65 y rs)

1.3

ECONOMIC AFFAIRS

Prior to the economical crisis of 1997, Korea’s impressive economic growth performance was part of what has been described as the East Asian miracle. The three decades of extraordinary economic growth that transformed Korea to one of the largest exporting countries from one of the poorest agrarian economies, culminated in its joining the Organization for Economic Cooperation and Development (OECD) on December 12, 1996. During the economic development and growth period (1970-2000) (except for the 1997-1998 economic crisis), the rate of economic growth was quite high despite a variety of domestic and international challenges. Between 1970s and 1990s, Korea’s GDP grew at an average annual rate in excess of 7 percent, thus resulting in about 210-fold increase in the level of GDP. However, since 2001 (except for 2002), GDP has grown at an average annual rate of approximately 5 percent. Also, the globalization has facilitated Korea’s rapid economic structural transformation from the conventional manufacturing industries to the high-tech and service economy. The structural transformation of Korean economy from 1960s to 1990s and the recent globalization have facilitated the country’s involvement in ever-expanding world trade. In addition, economic growth and structural change in population have led to changes in Korean consumption pattern and life styles. In particular, this expanding trade trend has greatly increased the access to a broad variety of goods and services for the Korean people. Lowering food self-sufficiency in agricultural and fisheries products will make Korea more dependent on international trade. For instance, from the start of the economic development era in the 1960s and until 2000, the Korean fisheries sector has realized significant international trade surplus and has also made a great contribution to earning foreign exchange necessary for economic development. However, the fisheries trade balance began to be reversed only from 2001 and since then a large trade deficit has resulted. This phenomenon implies that in the future Korea will form a much larger seafood import market than now.

FISHING INDUSTRY

2.1

HOUSEHOLDS DEPENDANT ON FISHERIES AND POPULATION

The number of households dependant on fisheries has declined over time mainly because of aggravated fishery resource stocks, the changing market situation opened to foreign fish products (i.e. lowering tariffs), and better prospects in the high growth sectors of the economy. In addition, there is a high degree of uncertainty in the existing governmentâ&#x20AC;&#x2122;s financial support to the fisheries sector due to market liberalization and free trade agreements. Table 3: Households Dependant on Fisheries and Total/Female Population (Unit: thousand person, %) 2001

2002

2003

2004

77 717

73 124

72 760

72 513

99.7

population

234 434

215 174

212 104

209 855

98.9

Female

117 409

107 486

105 720

104 493

98.8

(50.0)

(49.8)

Fishing household

(%) (50.1) (50.0) Source: Korea National Statistical Office (www.nso.go.kr).

04/ 03

The fishing population is aging and the number of women is increasing. As seen in table 4, the age structure shows the same problem as that of the entire Korean population. The population ratio of younger than 30 has declined from 3.1 percent in 2003 to 2.7 percent in 2004, while those of man and woman older than 60 have increased over time. Such structural change in the fishing population will have great influence on the future of Korean fisheries, regardless of their types. In recent years, on-shore fisheries tend to have a characteristic of family management instead of using hired labor whose wages have been soaring, while off-shore and distant-water fisheries operations are more and more dependent on foreign labor originating from China and south-east Asian countries. These foreign workers are unskilled and their wages are much lower than Koreans.

Table 4: Fishing Population by Sex and Age (Unit: person, %) 2001 Total

2002

136 869

2003

127 694

2004

04/ 03

125 023

122 384

97.9

70 851 69 666 67 870 Sex (51.8) (54.6) (54.3) (%) Woman 66 018 58 027 57 153 (48.2) (45.4) (45.7) < 30 4 149 3 817 3 854 (3.0) (3.0) (3.1) 30~39 14 914 13 067 11 600 Age (10.9) (10.2) (9.3) (%) 40~49 35 280 35 401 33 974 (25.8) (27.7) (27.2) 50~59 40 190 37 994 36 916 (29.4) (29.8) (29.5) > 60 42 336 37 414 38 680 (30.9) (29.3) (30.9) Source: Korea National Statistical Office (www.nso.go.kr).

66 380 (54.2) 56 004 (45.8) 3 313 (2.7) 10 490 (8.6) 32 097 (26.2) 37 171 (30.4) 39 312 (32.1)

97.8 98.0 86.0 90.4 94.5 100.7 101.6 -

Man

Chart 2: Age Structure Change of Fishing Population 160000

Fishing Population

140000 120000 100000 80000 60000 40000 20000 0 2001

2002

2003

2004

Year Total

2.2

M an

Woman

A(< 30 yrs)

B(30-60 yrs)

E(> 60 yrs)

FISHING VESSELS

The total number of Korean fishing vessels in 2004 amounted to 91 608, including the motorized of 89 327 and the non-motorized of 5 061. Out of the total vessels, coastal, aquaculture, inland and distant7

water fisheries hold 72.5 percent, 20.6 percent, 4.4 percent and 0.5 percent, respectively. Now, more than 97.5 percent of the vessels are motorized and Korean fisheries depend highly on imported oil. Thus, their operations are much more susceptible to the changes in international oil prices than ever, which is a major factor behind the decline in distant water fishing. Since 1994, Korean government began on a large scale basis, to reduce fishing vessels through the buyback programs (Annex A: Table 1). During the period from 1994 to 2005 the buyback schemes have been expanded to distant-water fisheries. In particular, the strengthening of global and regional fishery resource managements within the EEZs (exclusive economic zones) and on the high seas as well, has facilitated vessel retirements of off-shore and distant-water fisheries. Table 5: Fishing Vessels by Fisheries (Unit: vessel, ton, %) 2003

2004

No. of vessels 93 257 •Motorized 88 521 Total •Non-motorized 4 736 Tonnage 754 439 •Motorized 750 763 •Non-motorized 3 676 Coastal fisheries No. of vessels 66 698 Tonnage 345 066 Mariculture No. of vessels 19 228 Tonnage 28 034 Inland No. of vessels 4 510 Tonnage 3 941 Distant water No. of vessels 517 Tonnage 273 086 Others No. of vessels 2 304 Tonnage 104 312 Source: Korea Ministry of Maritime and Fisheries (www.momaf.go.kr) 2.3 2.3.1

91 608 87 203 4 405 724 980 721 398 3 582 66 063 330 203 18 792 27 296 3 991 3 102 491 261 237 2 271 103 142

04/ 03 98.2 98.5 93.0 96.1 96.1 97.4 99.0 95.7 97.7 97.4 88.5 78.7 95.0 95.7 98.6 98.9

PRODUCTION Production by Fisheries

In 2004, quantity and value of capture fishery harvest, consisting of coastal and distant-water fisheries, declined slightly from the previous year. Six important species of adjacent fisheries were hair tail, croakers, mackerels, anchovies, flounders, and squids. Of these, production of most bottom fish species such as hair tail and croakers, have continued to decline since 1980, while squids and anchovies showed a significant increase. Increasing exploitation of species with a one-year life cycle, such as squid, is an unusual phenomenon. 8

Table 6:

Catch and Value by Fisheries

(Unit: thousand M/T, billion won, %) 2003 Fisheries

Quantity

2004 Value

Quantity

04/ 03 (%) Value

Quantity

Value

Total

2 487

4 770.8

2 519

4 731.3

101.3

99.2

Coastal fisheries

1 097

2 405.8

1 077

2 609.7

98.2

108.5

826

1 165.7

918

2 117.1

111.1

104.4

126.7

167.2

128.6

132.0

545

1 072.6

499

7 373

91.7

68.7

Aquaculture Inland Distant-water

Source: Korea Ministry of Marine Affairs and Fisheries (www.momaf.go.kr). Table 7: Production by Main Species (Unit: thousand MT) Year Alaska Hair Croackers Mackerels Anchovies Flounders Squids Oysters Sea pollack tail Mustard 1970 13.4 69.1 55.2 38.3 54.0 21.6 72.1 42.4 45.0

Laver 37.0

1980

96.4

120.0

48.8

62.7

169.7

18.6

48.5

187.0

206.4

56.5

1990

26.5

104.0

43.0

97.2

168.1

13.2

75.3

235.3

274.4

101.2

1994

10.7

101.1

61.8

210.4

193.4

13.3

189.6

193.0

417.0

269.7

1995

9.2

94.6

45.2

200.5

230.7

13.7

200.9

209.4

390.7

193.0

1996

8.3

74.5

42.6

415.0

237.1

18.1

252.6

203.6

312.5

166.4

1997

7.3

67.2

34.9

160.4

230.9

18.1

225.0

218.2

436.4

140.3

1998

6.3

74.9

27.5

172.9

249.5

20.1

163.0

185.8

240.5

192.2

1999

1.4

64.4

28.0

177.5

238.9

19.6

250.0

188.9

214.3

206.1

2000

0.8

81.1

26.7

145.9

201.2

15.4

226.3

193.0

213.5

130.5

2001

0.2

79.9

10.8

203.7

273.9

14.5

225.6

184.2

178.2

167.9

2002

0.2

60.2

14.2

141.8

236.3

13.8

226.7

190.2

243.2

210.0

2003

0.2

62.9

9.5

122.0

250.1

13.1

233.3

258.5

199.1

193.7

2004

0.1

66.3

20.0

184.3

196.6

12.0

212.8

239.3

261.6

288.6

Note: Sea mustard is a kind of seaweed. In 1980 Alaska pollack catch was exceptionally high. Source: Korea Ministry of Marine Affairs and Fisheries (www.momaf.go.kr). Because of many difficulties and challenges of facing Korean distant-water fisheries, their production (e.g., tuna, squid, and trawl fisheries capture) in 2004 showed a decrease of 46 000 tonnes against 2003. Taking into consideration the present and future global/regional fisheries regulations within the EEZs and on the high seas, the international environments surrounding them would be far more unfavorable on the road ahead.

2.3.2

Aquaculture Production: Flat fishâ&#x20AC;˘Black Rockfishâ&#x20AC;˘Rainbow Trout

Korea is located in monsoon climate (i.e. humid, warm and heavy rainfall in summer; cold and heavy snow in winter) unfavorable to aquaculture development. Under the monsoon climate, fish farming must go through the long/cold winter season that requires a fish farm to have a heating system. In spite of high heating cost in the cold winter, aquaculture technological advancements have made fish farmers enable to efficiently produce two main species such as flat fish and black rockfish. In particular, flat fish most favored by Korean people as sashimi species are commercially produced in land-based large saltwater tanks. Farmed flat fish accounted for some 50 percent of the total farmed-marine fish production (excluding inland aquaculture production) in 2004. Table 8:

Major Sea-Farmed Fish Production

(Unit: M/T) 2001

2002

2003

2004

Total

29 297

48 073

72 393

64 476

Flat fish

16 426

23 343

34 533

32 141

(%)

(56.1)

(48.6)

(47.7)

(49.8)

9 330

16 634

23 771

19 576

(31.8)

(34.6)

(32.8)

(30.4)

3 541

8 096

14 089

12 759

(12.1)

(16.8)

(19.5)

(19.8)

Black rockfish (%) Other (%)

Source: Korea Ministry of Marine Affairs and Fisheries (www.momaf.go.kr). Fresh water aquaculture enjoyed a favorable business climate in the early 1990 and its production amounted to 30 000 tonnes. However, after the moratorium on cage fresh-water fish farming in the large-scale natural/artificial lakes in 1998, production declined to 17 000 tonnes in 1999. Since then the joint effort of government and fish farmers provided them with a good opportunity to again increase production to 24 000 tonnes in 2005. The main species of inland fish farming includes eel, rainbow trout, catfish, loach (or mudfish), carp, crucian carp. In particular, rainbow tout is one of the leading fresh-water farmed species, which accounted for 15.3 percent (3 320 tonnes) of the total inland farmed-fish production (21 760 tonnes) in 2005. Rainbow trout is farmed by using high quality underground water or natural water in mountain areas. Most of farmed trout is consumed as sashimi at trout farm restaurants.

Table 9: Fresh Water Farmed Fish Production (2005) Rank

Species

Production(M/T)

% of the Total

Eel

5 810

26.7

Rainbow trout

3 320

15.3

Catfish

2 575

11.7

Loach

1 953

9.0

Carp

1 640

7.5

Crucian carp

1 321

6.1

Mullet

1 002

4.6

Israel carp

975

4.5

Pond smelt

424

1.9

Korean bullhead

270

1.2

Other

2 470

11.4

Total

21 760

100

Source: Korea Ministry of Marine Affairs and Fisheries. 2.3.3

Average Productivity

In terms of catch volume, the adjacent (or coastal) fisheries did not show any unusual developments during the last five years. The CPUE (catch per unit effort GT) has remained at 3.0-3.2 tonnes. However, the ratio of juvenile to adult bottom fish in the catch has increased, implying a heavy depletion of resources. There is a clear indication of overexploitation of most bottom species such as croakers, hair tail and sea breams. However, abundance of typical pelagic fish species in Korean waters such as squid, mackerels and anchovies has been confirmed. For instance, squid traditionally caught in the East Sea is now abundant in all coastal waters. For the last decade, the government has implemented the ambitious fishing vessel reduction programs, which made a great contribution to considerably reduce the number of vessels. However, many fishery experts claim that in spite of such vessel retirement the present level of fishing power exceeds the optimal fishing capacity. Even though the total number of vessels will be further reduced with some 30 percent, Korean fisheries production would remain at the present level.

Table 10:

Catch per Unit Effort (CPUE, GT)

Year

Production (MT)

Vessel (GT)

Catch per G/T

1970

724 365

244 799

3.0

1980

1 370 324

379 295

3.6

1990

1 524 013

451 272

3.4

1994

1 486 357

444 109

3.4

1995

1 425 213

444 676

3.2

1996

1 623 822

439 261

3.7

1997

1 347 406

439 315

3.1

1998

1 308 336

438 205

3.0

1999

1 334 839

434 142

3.1

2000

1 189 000

397 868

3.0

2001

1 252 098

386 179

3.2

2002

1 095 787

362 114

3.0

2003

1 096 473

344 883

3.2

2004

1 076 687

330 203

3.2

Source: Korea Ministry of Marine Affairs and Fisheries (www.momaf.go.kr). Chart 3: CPUE Trend

4 3.5 CPUE(MT/GT)

3 2.5 2 1.5 1 0.5 0 70

Year CPUE(M T/GT)

After the UN convention on the law of the sea came into force in 1994 and the fisheries agreements with ROK, China and Japan (ROK-Japan in 1999, ROK-China in 2001, and China-Japan 2000) became

effective, Korean fishing operations in the East Asian waters and on the high seas were severely reduced. In addition, domestic fisheries resources have been heavily overexploited and fish farming has been also much constrained by monsoon climate factors, while national demand for fish and fish products has continued to increase over time. The imbalance of seafood production and demand led to an increase in imports of fish products, which resulted in a seafood trade deficit in 2001. This trend of increased imports and trade deficit will continue.

3. 3.1

PROCESSING INDUSTRY CATEGORY OF PROCESSED SEAFOOD

While trade and consumption in various forms of dried, salted, smoked, and otherwise cured fish products have been growing, the introduction of canning, refrigeration and freezing technologies have a major influence on the evolution of consumption and international trade. The innovation of canning broadened the market for many seafood species, such as tuna, oysters, mackerel, saury, and sardine. More importantly, canning was the primary technological change sparking the development of the international markets for tuna, sardine and salmon. However, increased growth in international trade of high-value seafood required the development of other types of technology, such as refrigeration and freezing. Innovation in shipping, preservation and product technology are continuing to have a positive impact on seafood trade. Refinement in leak-proof styrofoam packaging, which was developed in the early 1980s primarily for the fish farming industry, allowed for rapid growth in the shipping of unfrozen, fresh fish by air. Many new product forms have also been introduced. One example is the conservation of minced Alaska Pollack into surimi (an intermediate product of refined, stabilized fish protein concentrate developed in Japan). It is further processed into analog seafood products, such as artificial crab legs/meat or shrimp. Other innovations such as irradiation of seafood, flexible can (foil pouch) technology, advances in cryogenic freezing, and live shipping systems will likely facilitate market exchanges. Now, more than 90 percent of fish produced in Korea are processed. Thus, fish processing industries are offering the opportunity of creating value added products, responding to a changing consumption pattern, and facilitating trade and distribution of fish products. In general, processed seafood is categorized into eight forms: frozen, dried, salted, canned, fish meat paste and paste products, smoked, fermented, and seasoned (see Annex B: Tables 2-9 for details). Fresh and live fish go directly to sashimi restaurants and/or consumers. 3.2

PRODUCTION AND TRADE OF PROCESSED SEAFOOD

Over the last decade, remarkable changes have occurred in the Korean seafood processing sector. Many medium/small companies emerged on the market investing in modernization and providing a new range of fish products. There were 1480 seafood processing companies in 2004 providing more than 1.5 million tones.

In recent years, the production growth rate has been relatively high with an annual increase of about 10%. The major output of the Korean seafood-processing sector came from frozen and canned seafood, comprising some 79% of the total production. Table 11: Production of Processed Seafood (Unit: M/T) Item

2001

2002

2003

2004

1 546 839 228 272 (14.8)

1 438 677 209 641 (14.6)

1 357 717 207 501 (15.3)

1 528 795 287 960 (18.8)

12.6 38.8

80 569

83 043

80 608

159 638

98.0

Agar-agar

361

397

347

458

32.0

Minced fish

94 079

87 015

91 121

96 581

6.0

Flavor seasoned

17 250

19 343

21 501

22 486

4.6

Fish oil & meal Minimally processed (%)

36 013 1 318 567 (85.2)

19 843 1 229 036 (85.4)

13 924 1 150 216 (84.7)

8 797 1 240 835 (81.2)

-36.8 7.9

1 128 026

996 482

1 030 184

1 053 077

2.2

Dried

45 364

42 014

26 724

52 353

95.9

Pickled

48 076

42 598

37 381

34 626

-7.4

Dried seaweed

79 732

82 946

28 511

71 265

150.0

Total Higher degree of processing (%) Canned

Frozen

04/03(%)

Others 17 369 64 996 27 416 29 514 7.7 Source: Korea Ministry of Marine Affairs and Fisheries, Marine Affairs & Fisheries Year Book, 2006. Chart 4: Canned and Frozen Seafood Production Trend

1800000 1600000 Production(M/T)

1400000 1200000 1000000 800000 600000 400000 200000 0 2001

2002

2003 Year

Total

Canned

Frozen

2004

Frozen products comprised 68 percent (1 053 077 tones) of the total processed seafood production. This primarily consisted of squid, Alaska pollack, mackerel and some mass consumption fish. Korean seafood-canning sector also moved forward towards an increasing range of products. Improving labeling and packaging are important factors that increased national and international acceptance of the processed seafood. Agar-agar, pickled fish and oil & meal account for a small part of the overall Korean processed seafood production. In the last decade, Korean fish processors have been offering an increasing range of vacuum-packed products such as cuts and sliced fish, shellfish and seaweeds with a variety of spices. Table 12: Production by Canned Seafood Item (Unit: M/T) 2001

2002

2003

2004

Total

80 569

83 043

80 608

159 638

98.0

Tuna

62 186

63 042

58 301

145 018

148.7

Saury

2 534

1 624

1 714

2 487

45.1

402

498

1 565

Mackerels

2 480

2 733

1 285

956

-25.6

Oysters

5 202

6 983

10 516

5 441

-48.3

Bai top shell

2 960

3 429

4 051

5 157

27.3

Sea mussel

440

584

33.3

Short neck clam

135

397

4 230

4 108

3 122

110

-96.5

Sardine

Other

04/03(%)

Source: Korea Ministry of Marine Affairs and Fisheries, Marine Affairs & Fisheries Year Book, 2006. Table 13: Market Share of Canned Tuna by Processing Firm (Unit: %) 2001

2002

2003

2004

04/03(%)

Dongwon F&B

73.2

73.6

74.8

75.5

-0.9

Ottugi

19.6

19.5

18.5

5.13

Sahjo

6.2

5.0

5.1

-2

Hanseong

0.4

0.2

0.1

Ohyang

0.1

0.2

Other

0.1

0.2

0.4

0.6

-50

Source: Food Journal, Food Distribution Year Book, ROK, 2006. Looking at canned seafood, tuna has a dominant position. Production showed an increase with 159 638 tonnes in 2004 compared to 80 608 tonnes in 2003 (Table 11). There are five major processors

of canned tuna. Dongwon F&B is the largest one, which accounted for 75.5 percent of the total, followed by Ottugi and Sahjo (Table 12). Total export of Korean processed seafood increased from 361 025 tonnes in 2004 to 379 127 tonnes in 2005 or 5.0 percent (table 14), while in the same period the import volume declined slightly from 1 097 265 tonnes (US$1 741 876 thousand) to 1 097 007 tonnes (US$1 876 343 thousand), but import value of processed seafood increased (table 15). Table 14:

Export of Processed Seafood

(Unit: M/T, US$ thousand) 2004

2005

Product Groups

US$1000

05/04 (%)

US$1000

Total

379 127

966 627

361 025

1 042 976

5.01

-7.32

Frozen

278 865

595 113

270 793

654 680

2.98

-9.10

114

773

205

4 847

-44.39

-40.05

9 444

64 162

10 966

80 161

-13.88

-19.96

13 135

22 616

14 123

23 934

-6.99

-5.51

6 318

30 063

8 567

39 862

-26.25

-24.58

Other prepared products

23 463

135 405

28 294

147 111

-17.07

-7.96

Others

47 788

118 495

39 067

92 381

22.32

28.27

Smoked Dried Salted or in brine In air tight container

Source: Ministry of Marine Affairs and Fisheries, ROK Table 15:

Import of Processed Seafood

(Unit: M/T, US$ thousand) Product Groups

2004

2005

05/04 (%)

US$1000

1 097 007

1 876 343

1 097 265

1 741 876

-0.02

7.72

897 493

1 406 323

904 471

1 337 986

-0.77

5.11

890

2 761

732

2 124

21.58

29.99

Dried

14 256

87 579

12 457

73 604

14.44

18.99

Salted or in brine

37 593

31 002

42 987

30 669

-12.50

1.09

3 616

13 925

3 132

13 211

15.45

5.40

Other prepared products

60 839

202 395

59 548

189 588

2.17

6.76

Others

82 339

132 357

73 938

94 694

11.36

39.77

Total Frozen Smoked

In airtight containers

US$1000

Source: Ministry of Marine Affairs and Fisheries, ROK Export values of all seafood products showed a decline. Import values of all items increased. It is expected that this export/import trend of processed seafood will continue in the foreseeable future because mainly of keen competition with foreign producers such as China and Russia. 17

Korean consumers tend to prefer a high degree of processed seafood to round fish. General trends observed in the Korean fish processing sector can be summarized as follows. In fact, these trends are the same worldwide.

•

The move by the national processors towards more value-added products. Fish processors are trying to resolve the situation of a reduced fish supply through modernization of processing facilities and methods, and production of valued-added fish items.

•

The on-going trend of processors to compete for quality oriented consumers, rather than for price oriented ones. Even though the majority of the consumers are still price-sensitive, quality issues are becoming a much more important factor.

•

An increasing number of Korean consumers prefer easy-to-cook or ready-made seafood products such as fish fillets, fish cakes, ready to use seafood salads and other convenient products.

•

In future, keen price competition and rising per capita disposable income will increase seafood product availability for Koreans (see Appendix C tables 10-26).

3.3 3.3.1

SOME IMPORTANT POLICIES Government Financial Support

The government supports seafood processing industries through general budgets and public funds which are used largely for promoting production, creating high value added products of region-specific processed seafood and for strengthening competitiveness of processing firms. In particular, such policies include the investments in improving seafood handling/processing facilities, national health and dietary habit. The main purpose of the government support is to facilitate seamless handling and processing and to supply safer and fresher seafood: for instance, 5 000 million won (about US$5 million) for five freezing and cooling facilities, 3 740 million won (US$3.7 million) for ten landing-port processing facilities, 1 080 million won (US$1.08 million) for modernizing two existing processing facilities, 1 380 million won (US$1.38 million) for 23 oyster-cracking facilities, and 1 500 million won (US$1.5 million) for construction and operation of three sashimi processing factories. The main reasons behind the support are (i) to meet the international standards of seafood safety (e.g. hazard analysis critical control point, HACCP) and (ii) to promote competitiveness of processing firms.

Table 16:

Support for Seafood Processing Sector

(Unit: million won) 2003 No.

2004 Budget

No.

04/03(%) Budget

Total 65 19 662 85 22 455 Fund for Facility 33 11 402 43 12 700 Freezing and chilling 5 4 650 5 5 000 Modernizing plant 2 1 080 Landing-port plant 4 1 552 10 3 740 Sashimi facility 4 4 000 3 1 500 Other 20 1 200 23 1 380 Operation Fund 32 8 260 42 9 755 Freezing and cooling 22 6 635 18 5 150 Canning 7 1 090 4 700 Flavor-seasoned 1 100 Paste 1 90 1 100 Other 2 445 18 3 705 Source: Korea Fisheries Association, Fisheries Annual Year Book, 2006.

14 11 8 141 -62 15 18 -22 -36 11 733

In 1993 the government began to introduce a quality certification system into the seafood processing sector for the purpose of improving seafood quality and protecting consumers. Under this system the government guarantees quality and certifies it. There are three kinds of certification systems such as certification of conventional seafood, general seafood certification, and specialty seafood certification. Table 17:

Conventional Seafood Certification

Porridge (6)

Item Squid, Alaska pollack roe, Alaska pollack guts, clam, small octopuses, lance-fish, salted oyster with hot pepper, trumpet shell, abalone, anchovy, cod gill, Alaska pollack gill, native fresh-water shrimps, coral sea bream, shrimp, pilchard, herring roe, sea squirts, scallop, fermented fish-sauces (anchovy, sand lance, blue-ume anchovy, shrimps), saltfermented fish (flounder, Alaska pollack) Dried Alaska pollack, cod, abalone, sea mussel, large clam, oyster

Soybean-sourced fish (3)

Blue crab, plain blue crab, king crab

Dried (2)

Dried croaker, dried strand sea mustard (weed)

Pickled (27)

Flavor-seasoned laver, dried croaker with red pepper paste, corbicula soup, spiced eels, fried seaweeds Source: Korea Fisheries Association, Fisheries Year Book, 2006. Other (5)

Table 18:

General Seafood Certification

Item Dried squid, semi dried squid, dried red horsehead, dried anchovy, dried Dried (10) hanchi, dried shrimp, dried Alaska pollack, dried slices of Alaska pollack, dried thin strips of Alaska pollack, dried croaker Salted (3) Salted kelp, salted sea mustard, salted mackerels Dried laver, dried rock laver, dried strand sea mustard, dried cut sea Seaweeds (8) mustard, dried ready-made sea mustard, dried kelp, dried cut sea mustard, steamed fusiform-seaweed Source: Korea Fisheries Association, Fisheries Year Book, 2006. Table 19:

Specialty Seafood Certification

Item Flavor-seasoned dried slices of file fish, flavor-seasoned improved clam, Flavor-seasoned (4) sea kelp capsules, powdered sea kelp Source: Korea Fisheries Association, Fisheries Year Book, 2006. Although Korean consumers still appear to have a desire to consume raw or round fish, there is a changing tendency of their preferences towards processed seafood. Increasing incomes, couples working together for a living, and the number of single households are important factors in seafood purchase decisions. In particular, convenience and safety are the most important factors determining the preference for processed seafood. During the last decade, the Korean canned tuna industry enjoyed a remarkable market expansion. In recent years, seasoned/preserved seafood consumption has been growing rapidly. Now, the sashimi firms which are processing fresh fish fillets rather than whole fish have just began to feel the changing markets. On the road ahead, the government support policy would be directed towards encouraging seafood processing industries to review their processing technologies and to produce more and safer valueadded processed seafood. From the seafood processing firmâ&#x20AC;&#x2122;s perspective, regular consumer surveys will be of importance since they can help to improve the understanding of changes in the consumersâ&#x20AC;&#x2122; preferences and purchasing patterns.

4. 4.1

CONSUMPTION GENERAL FOOD CONSUMPTION TREND

To understand the current development of the entire Korean food system, it is necessary to see this in the context of recent changes in some of the main food categories. The capacity of the human stomach is limited and the number of consumers in the market changes only by a small percentage from one year to the next. Thus, any significant increase in some food categories must be accompanied by a decrease in the consumption of others. It is believed that changes have occurred in consumer demand for food as a result of greater knowledge of and concern for nutrition and health, and of changes in lifestyle, taste, and income growth. It seems, however, that the decrease in rice consumption has resulted primarily from changes in consumer preferences and the domestic factor rather than from changes in prices and income. Whatever the reason, the considerable increase in fresh and processed food demand (i.e. vegetables, fruits, fish, and milk) is unquestionable. Supplies have been affected by the development and application of a new technology, which has lowered production and distribution costs and improved the preservation of quality, for some products more than for others. Table 20: Per Capita Annual Food Consumption (Unit: kg) Year Fish & Shellfish

1980

1990

2001

2002

2003

2004

04/03(%)

22.5

30.5

35.6

36.6

38.5

40.8

6.0

132.9

120.8

92.8

91.1

87.8

88.6

0.3

29.4

29.7

34.4

34.6

32.4

33.5

3.4

8.0

8.3

8.2

8.4

8.0

8.5

6.3

120.6

132.6

164.4

144.6

152.6

160.8

5.4

Fruit

16.2

29.0

41.9

42.0

39.5

41.6

5.3

Meat

13.9

23.6

38.2

39.2

39.0

36.9

-5.4

Eggs

5.9

7.9

8.7

9.5

8.9

Milk

10.8

31.8

51.4

52.8

50.8

53.8

5.9

Rice Wheat flour Soybean Vegetables

Source: Korea Rural Economic Institute (www.krei.re.kr), Food Balance Sheet, 2005.

Chart 5: Main Food Consumption Pattern

Consumption(Kg/Yr/Person)

140 120 100 80 60 40 20 0 1980

1990

2001

2002

2003

2004

Year Seafood

Rice

M eat

M ilk

A major decline has occurred in the market for several important items in recent years. Annual per capita use of rice and meat has diminished. In particular rice consumption dropped remarkably from 132.9 kg in 1980 to 88.6 kg in 2004. Rice in Korea has always represented something far more than food and in fact, apart from being a main food resource; it is part of the Korean culture itself. Most farmers are growing rice, which is a main income source. However, as per capita income goes up, Korean consumers show their preference towards low energy food such as seafood, meat, fruit, and vegetables. Meat consumption increased from 13.9 kg in 1980 to a peak of 39.2 kg in 2002, but then declined to 36.9 kg in 2004 due largely to health concern. Consumption of fish and shellfish, vegetables, fruit, and milk has increased as a consequence of the consumersâ&#x20AC;&#x2122; health concern and income growth. 4.2

SEAFOOD CONSUMPTION PATTERN

Korea is one of the major seafood producers and consumers in the world. Since 1980, the per capita daily average fish consumption has shown an increase of 2.2 percent. Among fish products, anchovy and squid are the species of the biggest consumption, followed by Alaska pollack, mackerel, shrimp, and hair tail. The particular fish species consumed by the Korean people include yellow croaker, hair tail and flat fish. In recent years, they tend to move their preferences toward high value seafood such as king crab, salmon and shrimp.

Table 21:

Consumption Pattern of Major Species

(Unit: g) 1980

1985

1995

1999

2000

2001

2002

2003

2004

73.7

102.0

99.1

123.4

105.1

100.6

115.5

122.4

123.2

113.2

12.8

11.1

10.23

6.61

6.44

9.22

7.08

7.94

8.71

Croaker

2.2

0.9

1.42

1.66

2.22

2.44

2.37

2.01

1.96

2.46

Hair tail

6.4

2.1

3.75

4.03

3.56

3.81

4.83

4.30

4.20

4.13

Mackerel

2.9

3.51

6.8

5.06

3.27

7.65

5.51

5.00

6.09

Spanish mackerel

0.5

0.3

0.52

0.51

0.7

0.84

0.98

0.89

0.80

0.88

Saury

0.5

0.2

0.77

1.64

0.88

0.87

1.27

1.47

1.76

.250

Anchovy

8.4

6.3

6.68

13.34

13.13

11.63

14.23

13.76

13.31

10.57

1.6

2.33

2.7

4.58

4.80

4.30

4.87

7.38

7.33

0.4

0.7

0.69

2.38

1.97

1.26

1.04

1.44

1.79

2.89

7.9

15.18

19.97

18.19

16.72

14.62

13.74

14.17

11.18

Tangle

0.1

0.7

0.33

1.59

1.39

0.67

0.82

1.84

1.24

1.10

Sea mustard

6.7

8.7

7.24

17.47

7.56

8.18

7.61

11.65

8.13

10.68

Laver

3.8

5.88

10.65

9.01

6.96

8.89

8.08

6.80

8.70

Total Alaska pollack

Shrimp Crab Squid

1990

Source: Korea Rural Economic Institute, Food Balance Sheet, 2006. 4.3

DETERMINANTS OF SEAFOOD CONSUMPTION

The estimated results of the expenditure function show that the expenditure on fish and shellfish increases as income is higher and that economic/socio-demographic variables are statistically significant (Lee et al 2003). The elasticity of high value fish and crustacea appear to be 0.67 and 0.61, respectively, while those of mass consumption (e.g. frozen and/or fresh fish such as mackerel, yellow croaker and hair tail) and processed seafood are estimated at 0.31 and 0.34, which are considerably lower, relatively speaking. This suggests that consumption of high value fish and crustacea increases more significantly compared to other fish species as per capita income goes up. In case of price elasticity, estimated by using a linear almost ideal demand system (LAIDS), Spanish mackerel and black rockfish showed the highest, -1.17 and -1.11 respectively, while yellow croaker appeared the lowest, -0.63. High price elasticity of Spanish mackerel and black rockfish imply that if their prices decline by one percent, demand for them increases 1.17 and 1.11 percent, respectively. Expenditure (or income) elasticity turned out to be relatively high in crustacean, high value fish and salted dried fish. In addition, consumption of fish and fish products tends to have seasonal variation. For instance, Alaska pollack and cod are most consumed during the winter, while hair tail and mackerel are mostly consumed during the summer. Flat fish, which is most widely cultured in Korea, is consumed as sashimi (e.g., sliced raw fish meat) during all seasons except for summer. In fact, most live/fresh bottom fish are used for sashimi. 23

Table 22:

Expenditure Elasticity

Year

High value fish

Mass consumption fish

Crustacean

Salted/dried fish

Processed fish

Seaweed

1991

0.60

0.34

0.85

0.67

0.43

0.44

2001

0.67

0.31

0.61

0.56

0.34

0.59

Source: Ge-Im Lee, Seong-Kwae Park et al, Supply and Demand Projection for Fishery Products, Korea Ministry of Maritime and Fisheries, 2003.

4.4

CONSUMPTION PATTERN AND CONSUMER PREFERENCE

According to consumer surveys nearly half (42 percent) of Korean consumers purchase fresh fish at least once a week. By comparison, most buy salted-dried fish (47.7 percent) and seaweeds (33.8 percent) once a month only. Consumers purchase fish and fish products at large discount stores or the conventional fish markets. In general, the higher their income, the more they buy fresh fish at big discount stores or department stores, while people with low income tend to go to conventional fish markets. Young people of less than 30 (47.1 percent) appear to visit large discounters (see Annex C for details on consumption pattern and consumer preference). Table 23:

Source of Purchased Seafood

(Unit: person, %) Fresh fish and shellfish Large discounter

Salted/dried

Seaweeds

328(36.9)

378(42.6)

376(42.5)

95(10.7)

53(6.0)

168(19.0)

275(31.0)

239(26.9)

182(20.6)

Department store

55(6.2)

69(7.8)

65(7.4)

Fish wholesale market

80(9.0)

90(10.1)

35(4.0)

Direct market

36(4.1)

29(3.3)

26(2.9)

1(0.1)

3(0.3)

7(0.8)

18(2.0)

27(3.0)

25(2.8)

(1)

(5)

Super market inside village Conventional market

Internet Other No response

Total 888 888 884 Source: Ge-Im Lee, Seong-Kwae Park et al, Supply and Demand Projection for Fishery Products, Korea Ministry of Marine Affairs and Fisheries, 2003.

Table 24:

Reason for Visiting the Retail Stores

(Unit: person, %) Fresh fish and shellfish Cheap price

Salted/dried

Seaweeds

81(9.1)

115(13.0)

89(10.1)

Proximity to home or work

271(30.5)

188(21.2)

305(34.5)

Quality(freshness)

235(26.5)

242(27.3)

204(23.1)

36(4.1)

254(28.6)

332(36.4)

268(30.4)

11(1.2)

18(2.0)

17(1.9)

(1)

(4)

(6)

Handling and caring Convenience Other No response

Total 888 885 883 Source: Ge-Im Lee, Seong-Kwae Park et al, Supply and Demand Projection for Fishery Products, Korea Ministry of Marine Affairs and Fisheries, 2003. When consumers choose fish and fish products, they give great importance to their freshness (67.6 percent), price (21.0 percent), and taste (7.1 percent). Unpacked fresh fish is preferred because they can examine the state of freshness. Thus, Korean consumers tend to purchase unpacked fresh chilled fish rather than frozen, being of the opinion that chilled fresh fish has a better taste than frozen. In the past, Korean consumers tended to have a preference for domestic fish compared to imported, mainly because of taste and safety reasons. However, in recent years there is a tendency of nondiscrimination between native and foreign seafood due to that the prices of imported fish products are much lower than those of domestic ones, and it is also almost impossible to distinguish the native from the foreign fish in appearance. Table 25: Priority of Consumer Seafood Choice Response (person)

Ratio (%)

Price

186

21.0

Freshness

598

67.6

Taste

7.1

Nutritional value

1.9

Sanitary reason

2.3

0.1

Other Non response

(4)

Total 885 100.0 Source: Ge-Im Lee, Seong-Kwae Park et al, Supply and Demand Projection for Fishery Products, Korea Ministry of Marine Affairs and Fisheries, 2003.

members can economize by buying in quantity from a limited selection. The structure and organization of seafood retailing change only a little from year to year but, over a period of time, have changed drastically. The five largest discounter chains continue to attract more than 15 percent of the total seafood business. The share held by the largest firms has increased, whereas the share held by the conventional retailers has decreased. The mega-discount stores and the department stores seem to have been able to respond more effectively to changes in consumption patterns and consumer preferences.

5. 5.1

TRADE OF SEAFOOD EXPORT AND IMPORT

In 1960, the Korean export value of fishery products accounted for 17.5 percent of the national total export. However, during the past half century the Korean economic structure has been transformed from agrarian economy to high-tech and service industries and the export share of fisheries has become smaller over time. In 2004, the Korean fishery sector made a very small contribution of 0.5 percent to the national export. However, in 1998 the countryâ&#x20AC;&#x2122;s economy faced the worst situation in modern history, which invited the IMFâ&#x20AC;&#x2122;s (International Monetary Fund) intervention. Thus, as seen in table 26, national import including seafood was drastically reduced due to the serious shortage of foreign exchange. Table 26:

National vs. Fisheries (Export and Import)

(Unit: US$ thousand, %) National

National

Fisheries export

Fisheries import

BOP

export(A)

import(B)

Value(C)

Value(D)

D/B

(C-D)

1980

17 504 862

22 291 663

759 524

4.3

37 284

0.2

722 240

1990

65 015 731

69 843 678

1 513 094

2.3

368 095

0.5

1 144 999

1995

125 057 988

135 119 933

1 721 748

1.4

842 808

0.6

878 940

1997

136 164 204

144 616 374

1 492 588

1.1

1 045 474

0.7

447 114

1998

132 313 143

93 281 754

1 369 014

1.0

587 481

0.6

781 533

1999

143 685 459

119 752 282

1 520 534

1.1

1 178 968

1.0

341 566

2000

172 267 510

160 481 018

1 504 470

0.9

1 410 598

0.9

93 872

2001

150 439 144

141 097 821

1 273 619

0.8

1 648 372

1.2

-374 753

2002

162 470 528

152 126 153

1 160 435

0.7

1 884 417

1.2

-723 982

2003

194 325 000

178 826 657

1 129 385

0.6

1 961 145

1.1

-831 760

2004

253 844 672

224 462 687

1 278 638

0.5

2 261 356

1.0

-982 718

Year

C/A

Source: Korea Rural Economic Institute, Food Balance Sheet, 2006.

In 2000, Korean seafood export continued to increase to about US$1 504 million, but in 2001 it realized a trade deficit for the first time in history, which was affected largely by the market liberalization. The trade deficit in 2004 amounted to about US$1 billion and marginally increased to US$1.2 billion in 2005. This phenomenon provided Korean consumers with an increased selection of choice, while at the same time causing difficulties and various challenges for the Korean fisheries.

Chart 6: Seafood Export/Import Trend

2500000

US$thousand

2000000 1500000 1000000 500000 0 1980

1990

1995

1997

1998

1999

2000

2001

2002

2003

2004

Year Export

Import

In 2005, import of fishery products increased with 5.4 percent in value from 2004, amounting to nearly US$2.4 billion, despite a marginal decline in quantity. A significant increase were noticed for import of processed products such as smoked, dried, and canned products, while on the other hand, import of live fish and frozen products declined. Table 27:

Export/Import of Fishery Products, 2004/2005 2004 MT

2005 US$ 1000

05/04 (%) US$ 1000

US$ 1000

Exports

406 435

1 278 638

411 878

1 193 117

+1.34

-6.69

Imports

1 280 915

2 261 356

1 256 142

2 383 574

-1.93

+5.40

Source: Ministry of Marine Affairs and Fisheries, ROK.

Table 28:

Import of Fishery Products

Product Groups

2005 MT

Live

2004

US$ 1000

05/04 (%)

US$ 1000

38 363

176 449

54 486

201 175

-29.59

-12.29

Fresh or chilled

120 772

330 782

129 164

318 305

-6.50

3.92

Frozen

897 493

1 406 323

904 471

1 337 986

-0.77

5.11

890

2 761

732

2 124

21.58

29.99

Dried

14 256

87 579

12 457

73 604

14.44

18.99

Salted or in brine

37 593

31 002

42 987

30 669

-12.50

1.09

3 616

13 925

3 132

13 211

15.45

5.40

Other prepared products

60 839

202 395

59 548

189 588

2.17

6.76

Others

82 339

132 357

73 938

94 694

11.36

39.77

1 256 142

2 383 574

1 280 915

2 261 356

-1.93

5.40

Smoked

In airtight containers

Total

Source: Ministry of Marine Affairs and Fisheries, ROK. Korean export of seafood for 2005 declined by 6.7 percent in value to about US$ 1.2 billion compared to 2004, even though the export quantity in 2005 increased marginally over 2004. Significant decline was observed for smoked products, products in airtight containers, and other prepared products. This resulted in a fisheries trade deficit of US$ 1.2 billion in 2004. Table 29:

Export by Main Fish Products

Product Groups Live

2005 MT

2004

US$ 1000

05/04 (%)

US$ 1000

8 514

89 695

7 334

91 572

15.93

-2.05

24 237

136 795

38 076

144 090

-10.49

-5.06

278 865

595 113

270 793

654 680

2.98

-9.10

114

773

205

4 847

-44.39

-40.05

9 444

64 162

10 966

80 161

-13.88

-19.96

13 135

22 616

14 123

23 934

-6.99

-5.51

6 318

30 063

8 567

39 862

-26.25

-24.58

Other prepared products

23 463

135 405

28 294

147 111

-17.07

-7.96

Others

47 788

118 495

39 067

92 381

22.32

28.27

411 878

1 193 117

406 435

1 278 638

1.34

-6.69

Fresh or chilled Frozen Smoked Dried Salted or in brine In air tight container

Total

Source: Ministry of Marine Affairs and Fisheries, ROK.

5.2

MAJOR EXPORT AND IMPORT COUNTRIES

In 2005 China, Russia and Japan were the top three exporters to the Korean seafood market, together representing around 63 percent and 58 percent respectively of the total import by quantity and value. In particular, import of seafood from China has increased remarkably during the last decade and import countries diversified with Vietnam, USA, Thailand, Chile, Canada, etc. It is expected that free trade agreements (FTAs) with other coastal nations would expand and diversify import sources much more than ever before (Annex C: Table 31). Korean fish and fish products are exported to more than 100 countries. Major export markets are Japan, China, USA, EU, and Thailand. Japan is the single dominant export market, which comprised 65.3 percent of total Korean export value of fish and fish products in 2005. Table 30:

Import by Origin

Origin

2005 MT

2004

US$ 1000

05/04 (%)

US$ 1000

China

496 915

936 351

490 426

909 536

1.32

2.95

Russia

211 357

277 216

196 525

276 782

7.55

0.16

Japan

81 332

173 140

104 536

180 620

-22.20

-4.14

Vietnam

74 767

163 642

72 362

143 524

3.30

14.02

USA

67 176

152 555

79 283

136 225

-15.27

11.99

Thailand

40 787

125 147

34 043

106 521

19.81

17.49

Canada

11 431

42 474

16 067

46 582

-28.85

-8.82

Chile

50 325

57 076

42 175

43 935

19.32

29.91

8 459

29 146

14 666

35 226

-42.32

-17.26

20 132

33 630

15 687

29 008

28.34

15.93

Philippines

4 477

21 800

9 765

28 097

-54.15

-22.41

6 911

30 182

8 927

25 543

-22.58

18.16

New Zealand

5 033

17 211

3 953

11 528

27.32

49.30

Argentina

8 057

14 636

6 145

9 570

31.11

52.94

168 982

309 367

186 335

278 659

-9.31

11.02

1 256 142

2 383 574

1 280 915

2 261 356

-1.93

5.40

Norway Indonesia

Others Total

Source: Ministry of Marine Affairs and Fisheries, ROK.

Table 31: Korean Export to Major Countries Destination

2005 MT

2004

US$ 1000

05/04 ( %)

US$ 1000

Japan

136 948

741 062

115 556

834 649

-11.97

-11.21

China

64 865

108 031

68 073

124 102

-4.71

-12.95

USA

22 694

88 174

20 947

81 130

8.34

8.68

New Zealand

35 172

60 478

31 884

44 544

10.31

35.77

Thailand

61 210

57 383

42 688

37 565

41.05

52.76

Spain

23 237

31 519

22 606

34 702

2.79

-14.12

Taiwan

4 708

13 196

7 811

20 117

-39.73

-34.60

Hong Kong

1 718

8 895

1 867

15 334

-7.98

-41.99

Italy

4 835

11 253

5 937

14 030

-18.56

-19.79

Canada

4 853

9 025

2 197

6 172

120.89

46.22

Australia

1 503

5 029

1 915

6 551

-21.51

-23.23

Vietnam

7 459

4 570

6 462

4 885

15.43

-6.45

Indonesia

8 595

5 869

6 487

4 337

32.50

35.32

Russia

3 346

4 468

3 016

4 249

10.94

5.15

Singapore

1 555

4 095

707

3 868

119394

5.87

30 180

40 070

28 272

40 343

6.75

-0.68

411 878

1 193 117

406 435

1 278 638

1.34

-6.69

Others Total

Source: Ministry of Marine Affairs and Fisheries, ROK. 5.3

TRADE DETERMINANTS

Trade theory says that, first, if relative prices of imported products are lowered, import tend to increase since prices of imported products become cheaper relative to those of domestic products. Second, if exchange rates go down, import may increase since imported products are cheaper. Third, if fluctuation of exchange rate is high, uncertainty cost due to exchange rate difference loss occurs and the import tends to be reduced since importers are going to avoid such uncertainty. The results of a study (Kim and Kim 2006)1 show that exchange rates have considerably more influence on all seafood import than relative prices, but exchange rate fluctuations do not have a significant impact. Import from China is sensitive to relative prices, while those from Japan are notably influenced by the exchange rates.

Ki-Soo Kim and Woo-Kyeong Kim, Influence of Exchange Rate and Fluctuation on Seafood Imports in 2006 Individual Paper Abstracts of the Spring Meeting, Korea Society of Fisheries Business Administration, 2006. 30

5.4

FISH PRODUCTS FROM NORTH KOREA

Declaration for National Self-Existence/Reunification/Prosperity in 1988 provided a historical momentum to start South-North Korean cooperative exchanges and since then, North Korean seafood in the South has increased over time. Until the middle of the 1990s, seafood from the North consisted of less than 10 000 tonnes, but then in 1992, the availability of North Korean fish products on the South Korean market began to increase rapidly. In 2004, it amounted to 42 367 tonnes (US$68 million), which accounted for 2.8 percent of the total fisheries production of South Korea, including distant-water capture fisheries capture. Table 32:

North Korean Seafood in South Korea

(Unit: M/T, US$ thousand) 2001 Quantity

2002 Value

Quantity

2003 Value

Quantity

2004 Value

Quantity

Value

Total

20 378

33 706

29 800

63 857

39 192

90 010

42 367

68 210

Fish

1 396

7 849

5 647

30 649

532

1 108

183

334

Seaweed

Shellfish

15 744

16 087

19 694

21 536

22 143

20 337

25 997

21 675

Other 3 238 9 770 4 459 11 672 16 487 68 487 16 179 46 194 Source: Korea Ministry of Marine Affairs and Fisheries, 2004 Major Statistic of Marine Affairs and Fisheries, 2005. 5.5

LOWERING SELF-SUFFICIENCY LEVEL AND INCREASING IMPORT POTENTIAL

Overexploitation of fishery resources in Korean waters and the declaration of EEZs by far-east countries such as Korea, China and Japan, made a significant contribution to the decline of Korean fisheries production. In addition, the strengthening of global and regional fisheries management seriously limited Korean distant-water fishing opportunities on the high seas as well as within other coastal nationsâ&#x20AC;&#x2122; EEZs. Table 33:

Seafood Self-Sufficiency

1000 M/T Total production

2001

2002

2 665

2 476

2 486

2 519

Total consumption

3 221

3 433

3 578

3 922

Self-sufficiency (%)

2003

2004

83 72 69 64 Source: Korea Ministry of Marine Affairs and Fisheries, 2004 Major Statistic of Marine Affairs and Fisheries, 2005.

On the contrary, seafood consumption in Korea has rapidly expanded over time, since the 1980s. During the 1990s, domestic supply exceeded consumption by more than 20 percent, but from 2000 the supply/demand structure began to be reversed. In 2001, this resulted in the first fisheries trade deficit in Korean history, which implies that Korea’s seafood import market is getting larger as far as its present economic growth and development are maintained (see Annex C: Tables 32-34 for details). 5.6

FREE TRADE AGREEMENT (FTA)

Following the Uruguay Round (UR) which culminated with the Marrakech Agreement (1994), members of the WTO agreed to a reduction of their tariff rates from the pre-UR level to the level of tariff bindings. Within the WTO framework, Republic of Korea pursues comprehensive free trade agreements on a bilateral basis to expand opportunities for Korean workers, farmers and fishermen. So far, South Korea completed free trade agreements with Chile, Singapore, ASEAN, and EFTA (European Free Trade Association: Member states include Iceland, Liechtenstein, Norway, and Switzerland). Now, there are bilateral free trade negotiations on-going with the United States, Japan, Mexico, Canada, etc. The negotiation of a free trade agreement between Korea and the USA is the commercially most significant free trade negotiation Korea embarked on in 15 years. The United State is the world’s largest economy and Korea’s largest export market. Removing and/or lowering trade and investment barriers between the two nations through an FTA, will increase market access for businesses to both economies, boosting trade in goods and services. The United States is a valuable partner to Korea in the ongoing global trade negotiations, commonly known as the Doha Development Agenda. The United States will also be instrumental in advancing trade liberalization in the American region. Two-way goods trade between Korea and the U.S. was valued at about US$72 billion in 2005. Major export items to the U.S. include cars, telecommunications equipment and electrical machinery. The main imported products on the other hand include agriculture products, aircraft, machinery, organic chemicals, and seafood. Over the past ten years, despite the Asian financial crisis, Korea has maintained a strong real average annual GDP growth rate of 4.9 percent and an even stronger real average annual trade growth rate of 12.5 percent. It has also taken a series of important steps to open and reform its economy that continues to this day. An FTA with the U.S. and other economies will help promote continued economic reform in Korea. The Republic of Korea is positively working to open markets globally, regionally and bilaterally and to expand Korean opportunities in overseas markets. Korea is working to open markets globally in the Doha WTO negotiations; regionally through the APEC forum and the Free Trade Area of the MERCOSUR negotiations. In the foreseeable future, FTAs with Japan and China – presently initiating 32

such discussions, are expected to have a profound impact on the tri-angle seafood trade structure in the Far East Asia region (see Appendix D table 30-31). From the 1960s to 2000, the Republic of Korea aggressively developed coastal and distant-water fisheries. During this period, it enjoyed a more or less constant trade surplus in fisheries. However, the UN convention on the law of the sea came into force in 1994, limiting Koreaâ&#x20AC;&#x2122;s off-shore fishing grounds and distant-water fishing on the high seas. At the same time, the completion of the Uruguay Round trade negotiations began to push Korean fisheries sector harder to work on opening up its markets. Moreover, it is expected that ongoing FTA negotiations make a great contribution towards lowering tariffs and non-tariff barriers within the Korean fisheries. This will result in an increase of Koreaâ&#x20AC;&#x2122;s dependency on importing seafood. Distribution/marketing sectors will also face keen competition with large-scale foreign discounters such as Wal Mart.

6. 6.1 6.1.1

RULES AND REGULATIONS OF SEAFOOD TRADE TARIFF Tariff Structure

Trade of all seafood is subject to the rules and regulations of the external trade law and the tariff law. Tariffs consist of the national policy and concession duties. In national policy tariffs there are three types: basic, provisional and elastic tariffs. Provisional tariffs are duties applied where it is difficult to place basic tariffs to all items. Elastic tariffs (ET), include adjustment tariff (AT), quota tariff (QT), safeguard tariff (ST), seasonal tariff (SET), and counter tariff (CT). Concession tariffs are duties, upon which a country agrees with another country or several other countries that tariffs would not exceed a certain rate. In fisheries, there are WTO concession tariffs, most favored tariffs (MFT) applied to the least developed countries and FTA concession tariffs (e.g. Chile, ASEAN, Singapore), etc. In terms of seafood of KHS 10 unit, concession tariff items are 175 and non-concession tariff seafood includes 232. The overall tariff average rate for 407 items is about 18.0 percent. Table 34:

Tariff Items (2006)

Item

Non-Agricultural Product

Seafood

Agricultural Product

Total

Total (KHS 10)

9 810

407

1 451

11 261

Concession

8 867

175

1 435

10 302

943

232

959

Non-concession

Note: KHS codes are Korean harmonized system codes for commodity classification. Source: Ministry of Marine Affairs and Fisheries (www.momaf.go.kr), ROK. Table 35: Average Tariff Rates (2006) No. of Items

Average basic rate (%)

407

17.56

Concession

175 (43%)

17.53

Non-concession

232 (57%)

17.57

Total

Average Average concession Average active elastic rate (%) Rate (%) rate (%) 38.10

17.75

18.02

17.75

17.07

38.10

Source: Ministry of Marine Affairs and Fisheries (www.momaf.go.kr), ROK. 34

18.74

6.1.2

Adjustment Tariff

Adjustment tariffs are applied in order to control import of foreign seafood with much lower prices than domestic/other foreign items and which subsequently would represent a serious threat to distort and severely affect the fishermen and/or the whole fisheries. In 2006, adjustment tariffs are applied to 10 seafood items with a range of 23 - 63 percent, including live eel, live sea bream, live common sea bass, live brown croaker, frozen Alaska pollack, frozen saury, frozen skate ray, frozen brown croaker, pickled shrimp, and frozen squid (Annex C). The domestic fisheries related to these species are considered to be very vulnerable to importation. 6.2

6.2.1

SEAFOOD SAFETY SANITARY INSPECTION

Country of Origin Labeling (COOL)

Korean seafood COOL system follows the rules of country of origin labeling (COOL) in the WTO agreement. It is operated under the two laws: one is the external trade law and another is the law of Fish Product Quality Control. It is applied indiscriminately to all seafood domestically produced, exported and imported. The country of origin labeling policy in Korea has been implemented since 1994 in response to import liberalization, which was followed by the decision of the GATT BOP (balance of payment) board of trustees. The COOL system of domestic and imported seafood is subject to the external trade law, but it is implemented under the law of seafood quality control. 6.2.2

Hazard Analysis Critical Control Point (HACCP)

HACCP is a pro-active process control system by which food quality is ensured. This system has been adopted by many countries around the world and is mandatory in some countries. The HACCP process consists of: •

Hazard Analysis,

•

Identifying Critical Control Points (CCP),

•

Establishing Critical Limits for each CCP,

•

Monitoring CCP requirements and using the data gathered to effectively control processes,

•

Corrective Action,

•

Record keeping,

•

Verification.

The ISO 9000 standards (Quality Assurance) provide an excellent framework for the inclusion of the HACCP principles and an ongoing basis for continuing improvement. Monitoring, corrective actions, 35

record keeping and verification requirements are already contained within ISO 9000. Adding hazard analysis and CCP's to the quality system is relatively simple. The range of hazards could include safety hazards such as toxins, contamination, foreign bodies, decomposition, microbiological and non-safety hazards such as product quality, product substitution, etc. The next step by Acumen is to help identify "critical control points" in the production process and establish critical limits. Many companies include too many CCP's in their HACCP system thereby making it unwieldy and ineffective. The key is to separate the important control issues from those that have no real impact. CCP's are those where the failure of the process would cause or contribute to the occurrence of a hazard. Critical Limits are then established for each CCP. These limits may be determined by government regulation and are used to establish the HACCP system that is working correctly. The remaining parts of the HACCP system, monitoring, corrective action, record keeping and verification already exist within an ISO 9000 quality system. Acumen would normally strengthen these parts of the ISO 9000 system to ensure they effectively deal with the HACCP requirements. (Chung 2002)2 In Korea, food safety and sanitary law provides a legal basis to introduce HACCP by establishing rules for securing seafood safety and harmonizing with the international food safety rules. Raw and processed seafood registers for export and import should comply with the HACCP notice and the government issues a certification of implementation.

6.2.3

Inspection

Seafood safety inspection aims at promoting seafood quality and supplying safe fish and fish products. Seafood inspections are carried out by the National Fisheries Product Quality Inspection Service, which is a competent authority, based on the law of seafood quality control. Its main purpose is to confirm human safety and harmfulness problems by analyzing antibiotics, heavy metals and the like, using chemical and/or biological inspection methods. In particular, the growing demand for seafood by health-conscious consumers results in an increased concern about seafood safety. As supply of seafood, domestically produced or imported, increases drastically media attention to the use of aquaculture chemicals to maintain fish health has heightened this concern.

Myong S. Chung and Kyung H. Im, Policy for Seafood Processing Industry Development, Korea Maritime Institute, 2003. 36

The government authority of seafood safety control advocates the use of alternative culture techniques to reduce chemicals dramatically. A survey of the Korean consumers suggests that they would be willing to pay more for certified, chemical-free aquaculture fish but are not willing to sacrifice quality. However, it is not clear how much chemical use can be reduced without loss of visual quality of fish, nor is it sure how reduced visual quality would affect consumption. Inspections are made at production, processing and shipping stages. If the inspected items exceed the standards established by the government, the information is passed on to producers/importers/exporters and city/county administration. In such cases, the city/county would take appropriate measures on the production or shipping deferment in question and destroy the items disqualified. In 2005, there was an increase of 293 in the disqualified cases compared to 2004, but a slight decline in quantity and value. Inspection results in 2005 showed that the disqualified ratio of seafood imported from Taiwan was highest in case, quantity and value. Table 36:

Inspection of Imported Seafood

(Unit: M/T, US$ thousand) Year

2005

2003

2000

1998

Total Import

Inspection (Ratio %)

Quantity

Value

Case

1 256 142

2 383 574

96 112

1 238,603

749 191

375 224

1 961 145

1 410 598

587 481

80 031

49 155

17 507

Disqualified (Ratio %)

Quantity

Value

Case

Quantity

Value

932 085

1 939 045

292

1 559

5 685

(74.2)

(81.4)

(0.3)

(0.2)

(0.3)

930 307

1 648 907

3 006

7 375

(75.1)

(84.1)

(0.0)

(0.3)

(0.4)

514 755

1 186 256

347

2 425

6 048

(68.7)

(84.1)

(0.7)

(0.5)

249 033

436 608

584

1 299

(66.4)

(74.3)

(0.5)

(0.2)

(0.3)

Source: Korea Ministry of Marine Affairs and Fisheries. Because the WTO DDA negotiation failed, it is expected that tariffs and non-tariff barriers would be much lowered through FTAs, which must promote regional trade of goods and services. In the foreseeable future Koreaâ&#x20AC;&#x2122;s FTA will be concluded with many countries or economic blocks. Many of the counter parties may include coastal states. In 2005, the net import value of seafood was more than US$1.2 billion. As seafood import value exceeds export, seafood is becoming a key commodity in inspection and quality assurance.

Table 37:

Disqualified Volume and Value by Country (2005)

(Unit: M/T, US$ thousand) Inspection

Disqualified

Disqualified Ratio (%)

Country Case

Quantity

Value

Case

Quantity

Value

Total

96 112

932 085

1 939 045

292

1 559

5 685

0.3

0.2

0.3

China

35 129

330 854

758 132

642

2 053

0.3

0.2

0.3

Russia

6 396

211 459

263 399

151

0.2

0.0

0.1

Taiwan

1 324

61 824

63 070

237

1 479

2.6

0.4

2.3

17 422

58 518

144 042

109

413

0.2

0.3

N. Korea

5 311

49 151

61 137

0.2

0.1

Vietnam

5 294

39 412

108 348

123

0.2

0.1

Thailand

9 035

21 892

98 102

163

0.2

0.1

0.2

16 201

158 975

442 815

404

1 239

0.4

0.3

Japan

Other

Case Quantity Value

Chart 7: Imported & Disqualified Seafood

Disqualified Case/Volume/Value

3 2.5 2 1.5 1 0.5 0 China

Russia

Taiwan

Japan

N. Korea

Vietnam

Thailand

Country Case

Volume

Value

As import of fresh or live seafood increase, seafood safety issues are becoming a growing concern for Korean consumers. The government requires exporting countries to apply HACCP, COOL and close inspections to their seafood exported to the Korean market. In the future, stricter inspections will be applied to seafood imported from less developed countries. As far as seafood trade is concerned, it is expected that many of the seafood import countries operate more systematic and under stringent inspection systems. 38

DISTRIBUTION AND MARKETING SYSTEM

7.1

DISTRIBUTION CHANNELS OF DOMESTIC FISH

Seafood distribution channels are a complex network between landing port/urban wholesale/retail markets and between fishermen and consumers. Fisheries wholesale market consists of wholesale legal person, middlemen, participants in market exchanges (e.g., processors, exporters, retailers, group consumers, etc), and landing-port distributors. Figure 1: General Distribution Channels of Seafood

Landing-port distribution

Consumption-area distribution

LandingPort wholesale market

Consumers

NIWM

Retailers

WMOWMLP

Producers

CLT

Commission merchant

CWM

Non-institutional wholesale market

Direct sales market

Direct sales/E-commerce

Note: PF = processing firms, MW = middle wholesaler, CWM = consumption-area wholesale market (wholesale legal person), CLT = collector, NIWM = non-institutional wholesale market, WMOWMP = wholesale market outside wholesale market legal person Source: Young-Soo Jang, A Study on Survey of Fishery Product Distribution Prices and Improvement of Fisheries Distribution System, Korea Ministry of Marine Affairs and Fisheries, 2002.

Even though the Korean seafood distribution system is complex, five types of distribution channels are generally observed as follows.

•

Producer → landing-port wholesale market (landing-port fisheries cooperative consignment market) → landing-port middle wholesaler → [collectors (landing-port distributors)]→ urban wholesale market → urban-area middle wholesaler → [middlemen outside of institutional market] → retailers → consumers : fisheries cooperatives are in full charge of sales on behalf of fishermen.

•

Producer → [landing-port wholesale market (landing-port fisheries cooperative consignment market) → landing-port middle wholesaler] → [collectors (landing-port distributors)] → wholesalers within a urban wholesale market → [middlemen outside of institutional market] → retailers → consumers

•

Producer → commission merchant → analogous wholesale market → [middle wholesaler outside institutional market] → retailers → consumers: fishermen borrow a certain amount of commission merchant’s money so that sales are entirely consigned to a commission merchant.

•

Producer → direct sales market → consumers: fisheries cooperatives set up a direct market at which exchanges take place between fishermen and consumers without any involvement of brokers.

•

Producer → cyber market → consumers: this is another type of direct trade between producers and consumers on the cyber space.

7.2 7.2.1

DISTRIBUTION CHANNELS OF SOME IMPORTANT FISH SPECIES Domestic Mackerel / Squid (Fresh)

Mackerel and fresh squid have the same distribution channels. Mackerel produced in Korean waters is distributed through landing-port markets, especially the Busan common fish market. All of them are not distributed in a fresh form, but are sent to processing firms and freezing facilities or are used for aquaculture feed/tuna long-liner baits. There are two channels in mackerel distribution: fish market attached to landing-port and the consumption-area wholesale market. Mackerel, which is landed at the consignment fish market, is traded through auction on board or in card-board boxes at the landing port. Distribution through the urban wholesale markets is as follows: report of shipping in (submitting standard shipping documents) → receipt → unloading and arranging → auction → middleman’s bid → sales.

Figure 2: Distribution Channels of Domestic Mackerel and Squid (Fresh)

(1)

(3)

(2)

(10)

(4)

(5)

(6)

(7)

(9)

(11) (8)

Note: (1) producer, (2) landing-port fisheries cooperatives, (3) landing-port middle wholesale firm as a legal person, (4) consumption-area middle wholesaler, (5) wholesaler, (7) retailer, (8) large discounter, (9) consumer, (10) land-port consignment market, and (11) consumption-area wholesale market. Source: Young-Soo Jang, A Study on Survey of Fishery Product Distribution Prices and Improvement of Fisheries Distribution System, Korea Ministry of Marine Affairs and Fisheries, 2002 Mackerels are graded into large, medium and small sizes and they are packed in styrofoam boxes at landing ports, so additional grading is not necessary at the urban wholesale markets. Squids of 20-30 are packed in a styrofoam box and then they go through the same distribution channels as mackerels. 7.2.2

Domestic Squid (Frozen)

A large part of the squid is harvested by off-shore jigging and trawl fisheries and used for the production of frozen products and to a certain degree for processed products. Squid prices are initially fixed by the landing-port middle wholesalers. Landing-port fisheries cooperatives pay fishermen the rest of the total amount after allowing consignment fees of 4 percent. Most of the squids are purchased by freezing facilities and/or processing firms (i.e. drying firms).

Figure 3: Frozen Domestic Squid Distribution Channels

(4)

(1)

(2)

(3) (6)

(5)

(7)

(8)

Note: (1) producer, (2) landing-port fisheries cooperatives, (3) landing-port middle wholesaler, (4) consumption-area wholesale market, (5) freezing facility, (6) consumption-area wholesale market, (7) drying firm, and (8) consumption-area wholesaler. Source: Young-Soo Jang, A Study on Survey of Fishery Product Distribution Prices and Improvement of Fisheries Distribution System, Korea Ministry of Marine Affairs and Fisheries, 2002 7.2.3

Frozen Distant-Water Squid

The first auction on distant-water squid is made outside the public landing-port markets, different from domestically caught squid. In some distant-water squid distribution channels, there are general trading firms between producer and first wholesaler. Eight distribution channels are observed as follows:

•

Producer → general trading firm → first wholesale firm (→ second wholesale firm) → wholesaler → retailer

•

Producer → first wholesale firm (→ second wholesale firm) → wholesaler → retailer

•

Producer → first wholesale firm → processor → consumption-area wholesale market → retailer

•

Producer → first wholesale firm → processor → consumption-area wholesale firm (second wholesale firm →

retailer

•

Producer →

first wholesale firm → processor → retailer

•

Producer →

processor → consumption-area wholesale firm (second wholesale firm) →

retailer •

Producer → general trading firms such as agricultural and fisheries marketing companies → consumption-area wholesale market → retailer

•

Producer → export (mainly to China)

7.2.4

Farmed Flat Fish (Live)

Most of the flat fish traded in Korea are produced by about 700 mari-culture farms. Flat fish distribution channels are quite different from those of other fish. As they are sold live, the flat fish is normally purchased by sashimi restaurants through non-institutional wholesale markets (i.e. Hanam, Incheon, Pyongtak, Busan and others) or landing-port distributors (collectors). Figure 4: Flat Fish Distribution Channels

(2)

(3)

(4)

(5)

(6)

(1)

(9)

(10)

(7)

(8)

(11)

(12)

Non-main channel

Main channel

Note: (1) producer/importer, (2) fisheries cooperative consignment market, (3) consumption-area wholesale market, (4) landing-port middleman, (5) consumption-area middleman, (6) middle wholesaler, (7) consumption-area stock point, (8) landing-port distributor, (9) retailer (sashimi restaurant)/pseudo wholesale market/large discounter/group catering/department store, (10) consumer, (11) producer, and (12) consumer. Source: Nam-Soo Lee, Distribution and Consumption Structure of Farmed in A Policy Measure for Promoting Competitiveness of Flat fish Farming, Korean Fisheries Business Administration Society, 2006. Most trade of live flat fish is carried out by small-scale middle distributors, with an oxygen-salt-water tank truck or large-scale distributors outside the institutional markets. Since flat fish is traded live, the distributors are facing serious financial consequences should they fail to meet the regulated conditions for transportation of live fish.

Looking at trade volumes at the major live flat fish wholesale markets by production region, markets in Busan, Seoul and Incheon handle the most quantity of flat fish which is produced in Jeju province, the largest region of farming flat fish in Korea. Table 38: Flat Fish Trade Volumes of Major Live-Fish Markets by Regions (2005) (Unit: %) Region

Nohryangjin

Incheon

Hanam

Busan

Jeju-do

62.0

55.0

2.5

65.0

Whan-do

24.0

43.8

87.5

13.0

Other 14.0 1.2 10.0 22.0 Source: Nam-Soo Lee, Distribution and Consumption Structure of Farmed Flat fish in A Policy Measure for Promoting Competitiveness of Flat fish Farming, Korean Fisheries Business Administration Society, 2006. Live fish markets supply flat fish to a wide spectrum of purchasers, who include general sashimi restaurants, Japanese restaurants, department stores, large-scale discounters and others. General sashimi and Japanese restaurants buy more than 88 percent of the total supply of live flat fish. Hanam live-fish wholesale market is the largest supplier to general sashimi restaurants (75.7 percent), followed by Busan market (59 percent). Nohryangjin market in Seoul sells to general sashimi restaurants (46.5 percent) and Japanese restaurants (42.4 percent) almost equally. Table 39: Flat Fish Sales Volumes of Live-Fish Markets by Purchasers (Unit: %) LBWMT

GSR

LSD

Other

Total

Garakdong

45.0

15.7

15.0

7.5

100.0

Nohryangjin

53.4

15.0

12.7

11.2

7.7

100.0

Incheon

50.0

25.0

7.5

10.0

100.0

Hanam

45.0

33.9

11.5

7.1

2.5

100.0

Busan 38.0 23.0 10.0 14.0 15.0 100.0 Note: LBWMT = live-flat fish wholesale market, GSR = general sashimi restaurant, JR = Japanese restaurant, DS = department store, and LSD = large-scale discounter. Source: Nam-Soo Lee, Distribution and Consumption Structure of Farmed Flat fish in A Policy Measure for Promoting Competitiveness of Flat fish Farming, Korean Fisheries Business Administration Society, 2006. 7.3

DIRECT MARKETING

A small but significant quantity of fresh or live fish, possibly 3-5 percent of the total, bypass the usual distribution systems, moving directly from fishermen to retailer, foodservice operator, or consumer. Many factors have affected the revitalization of direct marketing in recent years. The desire by 44

consumers, retailers, and restaurants for freshly harvested fish and the inability of the distribution system to provide them, have encouraged fishermen to harvest and sell fish directly. Fishermen marketing directly can be more responsive to the preferences of buyers regarding fish species and quality. Some consumers apparently enjoy the opportunity to buy direct from fishermen at fishing port or community fishermen markets. 7.4

WHOLESALERS

The Korean fisheries market is comprised largely of landing-port and wholesale/retail outlets. Landingport market consists of fisheries cooperatives joint markets, fisheries cooperatives consignment markets and the Busan common fish market, which are located around fishing ports. Fifteen central and provincial wholesale markets are located at large urban areas. Table 40:

Trade Quantity of Fisheries Wholesale Markets (Legal Persons)

(Unit: million won, %) Market Total

15 Garakdong

2001

2002

2003

2004

04/03(%)

992 929

976 745

977 892

1 006 575

2.9

408 653

390 939

347 838

383 668

0.3

Central

Daegu

21 897

21 318

21 781

25 602

17.5

wholesale

Daejeon

13 728

12 125

15 026

15 271

1.6

market

Ulsan

19 269

20 595

20 797

19 868

-4.5

Nohryangjin

305 364

315 459

308 594

330 668

7.1

Guri

129 268

125 378

118 883

126 250

6.1

13 305

10 387

7 124

11 644

63.4

8 785

8 442

5 445

4 652

-24.6

14 078

11 541

10 157

-12.0

32 820

36 451

42 902

49 425

15.2

Ahnsan

9 346

7 419

7 434

13 145

76.8

Chungju

2 761

2 502

2 295

2 341

2.0

Iksan

2 554

2 565

2 644

3 087

16.7

Pohang

7 040

8 002

8 040

9 031

12.3

Geongju

4 061

3 258

2 284

1 756

-23.2

Suwon Cheongju Provincial Jeonju wholesale Anyang market

Source: Korea Fisheries Association, Fisheries Year Book, 2006. Wholesale markets play a crucial role in distributing fish and fish products. There are 15 wholesale markets (five central wholesale markets and ten provincial wholesale markets). Two wholesale markets (e.g., Garakdong and Nohryangjin) in Seoul account for some 64 percent of the total trade volume and about 51 percent of the total trade value. 45

Big discount chains purchase most of their needs directly from landing point sources to improve seafood quality and save distribution costs, bypassing institutional wholesalers. 7.5

RETAILERS

Since the 1990s, the Korean retail stores have experienced a real boom in their development. In particular, large-scale discounters have drastically transformed the Korean retail market structure from the conventional to the modern. Consumers in Korea purchase most of the seafood they eat at home in large-scale discount stores and conventional fish markets. These stores provide an increasing number of services. As big discounters have increased in size and as fresh seafood has become relatively more important, retail merchandising has become much more effective. The key criteria for the change in preference of the choice for food procurement are as follows: (i) proximity to home or to work; (ii) a wide assortment of products; (iii) best prices; and (iv) one-stop shopping. The leading retailers (discounters) in Korea include E Mart, Mega Mart, Home Plus, Lotte Mart, Wal Mart (American global discounter), etc. 7.6 7.6.1

MAIN GOVERNMENT POLICIES Government and Private Purchases for Price Stabilization

Seafood has some unique characteristics such as the difficulty of planned production, one-time mass catch, high seasonality, and a high degree of perishablility subsequently making it difficult to maintain a balance of supply and demand. In a highly seasonal fishery, prices fall when large landings are made unless there are some means of withdrawing part of the supplies from the market by, for example, holding them in refrigerated storage for a period until prices improve once again. The arguments for providing such storage are generally based on three points; 1) during periods of large landings the quality of fish reaching the market will otherwise fall because it is handled in large quantities and is probably hastily or inadequately processed and stored; 2) boom landings depress prices for the fishermen, thus causing his earning to fall; and 3) in periods of fish scarcity, consumers suffer because fish prices rise. Therefore, it is argued that a system should be introduced by which fish can be stored under refrigeration, thus enabling fish prices to be stabilized over the year. Sometimes it is argued that as a result fishermenâ&#x20AC;&#x2122;s income would rise.

Table 41:

The Government Purchase

(Unit: M/T, million won) Item Quantity(Q) 2001 2002 2003 Value(V) Total Q 20 488 12 000 18 782 V 30 804 30 991 44 505 Dried laver Q 806 680 538 V 12 038 9 664 6 653 Salted sea Q 2 627 1 960 2 000 mustard V 2 629 2 158 2 041 Dried sea Q 40 mustard V 419 Dried squid Q 6 V 67 Dried anchovy Q V Frozen squid Q 11 194 3 025 2 786 V 13 133 5 292 6 818 Frozen Q 1 954 1 791 1 183 mackerel V 3 809 3 514 4 042 Frozen Alaska Q 3 685 4 046 11 940 pollack V 4 966 5 962 21 932 Frozen croaker Q 1 57 85 V 13 569 808 Frozen hair tail Q 175 304 250 V 1 730 3 339 2 211 Frozen saury Q V Source: Korea Fisheries Association, Fisheries Year Book, 2006.

2004

04/03(%)

20 541 38 590 401 4 769 2 065 4 847 3 781 6 067 14 054 20 380 240 2 527 -

9.4 -13.3 -25.5 -28.3 -25.9 -28.9 219.6 50.1 17.7 -7.1 -4.0 14.3 -

The Korean government purchases and releases 11 dried/frozen/salted fish and seaweeds to stabilize the prices as well as the fishermenâ&#x20AC;&#x2122;s income using the agricultural and fisheries price stabilization fund, through landing-port fisheries cooperatives. An important goal of the price stabilization policy is to raise the fishermanâ&#x20AC;&#x2122;s price and income, while supplying seafood to consumers at lower prices. In 2004, the government planned at the cost of 47.2 billion won (US$47.2 million), to purchase five fish species such as frozen squid, Alaska pollack, mackerel, dried laver and frozen hair tail, but it actually only used 38.5 billion won (US$38.5 million) as the purchase consisted of 2 000 tonnes less than planned due to a short harvest of squid and laver. In 2004, the government also supported 263.4 billion won (US$263.4 million) through the agricultural and fisheries product price stabilization fund to the private freezing storage firms for the purchasing and storage of squid, croaker, hair tail, and laver amounting to some 1 552 tonnes. This support was utilized as follows; (i) 97 billion won (US$97 million) (99 thousand tonnes) for purchasing & storage; (ii) 11.9 billion won (US$11.9 million) (106 thousand tonnes) for processing & purchasing; (iii) 52.1 billion won (US$52.1 million) (154 thousand tonnes) for purchasing superior fish products and facilitating 47

their exports; and (iv) 102.4 billion won (US$102.4 million) for the operation of private storage establishments. The main purpose of this subsidy is to stabilize domestic seafood prices and in turn the fishermenâ&#x20AC;&#x2122;s income. 7.6.2

Expansion of Distribution Facilities

In 2004, the government invested 15 530 million won (US$ 15.53 million) in expanding the distribution facilities for efficient landing and sanitary handling of fish and fish products. Four cooperative consignment markets were expanded, four distribution facilities were added and the construction of Gamcheon-port public fish wholesale market was funded. The Gamcheon-port fish wholesale market is a leading centre for imported or landed distant-water fishing fleets without auction. Table 42:

2004 Government Support for Distribution Facilities

(Unit: million won) Support

No. of Total

facility

Total

National

Lending

Provincial

Self

28 869

15 530

1 307

10 794

1 238

A 4 26 562 947 947 758 B 1 8 571 6 000 2 571 C 2 1 200 360 360 480 D 3 9 000 4 500 4 500 E 4 7 446 3 723 3 723 Note: A = live fish consignment facility, B = construction of wholesale market, C = direct sales facility, D = distribution center, and E = supplementation of distribution facility. Source: Korea Fisheries Association, Fisheries Annual Year Book, 2006.

During the last decade, the government supported efforts to promote direct shipping of seafood from landing ports to urban (consumption) areas. To do this, the national budget of 947 million won (US$947 thousand) was allocated for the construction of four facilities to handle direct live fish sales by the fishery management cooperative legal persons. 7.6.3

Facilitation of Distribution Functions

Landing-port fisheries cooperatives traded 48.6 percent (1 244 thousand tonnes) of the total production of Korean coastal fisheries including aquaculture. Joint wholesale markets handled 17.4 percent (353 thousand tonnes) of the total production. Of the volume traded, the wholesale markets accounted for 81.5 percent (288 thousand tonnes), fisheries cooperatives joint markets for 18.4 percent (65 thousand tonnes), and markets outside the listed for 7.0 percent (25 thousand tonnes). In terms of seafood standardization, the government set up and implemented the standard-trade-units for 32 items (Annex D: Table 35). To encourage fishermen to ship their products in the established 48

standards, the government lent fishermen, fishermanâ&#x20AC;&#x2122;s groups, and fisheries participants 15.6 billion won (US$15.6 million) at a low annual interest rate of four percent through the fisheries cooperatives. In order to reduce logistic costs occurring in the process of distribution, the loading/unloading system was mechanized with the assistance of 338 million won (US$338 thousand), which allowed the wholesale markets to significantly save labor costs. In addition, most of the landing-port fisheries cooperatives constructed an information network system so that information generated in the fisheries distribution system became available at a real time. Eleven wholesale markets established 11 data bases with auction information. Three wholesale legal persons employed an electronic auction system to secure its transparency. The e-commerce system was established to facilitate direct market exchanges between fishermen and consumers and an internet system was set up to provide all fish trade participants with export/import information. During the last decade, the Korean fisheries distribution system has been modernized and expanded in an effective way, primarily lowering distribution costs. Landing-port cooperatives joint consignment fish markets and urban fish wholesale markets (legal persons), have played central roles in distributing fish and fish products among traders and fixed the prices at the landing and consumption stages. Innovation in computer network and transportation technologies has advanced the fish distribution system rapidly and has also promoted the market transparency, which facilitated the market competition and safety capacity at the level of producers. The government support also made major contributions to the expansion of distribution facilities and functions, adopting labor-saving loading/unloading equipments, and establishing data bases to provide market participants with transaction information in real time. Considering the on-going globalization, the public distribution systems of seafood will face keener competition with big foreign discounters. At the same time, the functions of private large-scale discounters in urban areas will be of more importance than the conventional retail fish markets.

8.1

IMPORTANT INSTITUTIONS

FISHERIES ADMINISTRATION

Korea Ministry of Maritime and Fisheries (MOMAF: www.momaf.go.kr) and its related branch offices carries out all aspects of fishery policies, including resource utilization and management, cooperatives’ affairs, distribution and processing, research & development, international trade and affairs and so forth. Much of its administration capacity is focused on developing and implementing fisheries resource restoration policies. Recently, the Ministry has been heavily involved in WTO DDA (Doha Development Agenda) and FTA negotiations. These two negotiations are of particular importance for Korean fisheries since there are some critical issues related to subsidies, tariffs and technical trade barriers. Among these, the subsidy issue is of particular interest. Regarding imported seafood, the country of origin labeling program started in 1994 and is applied more strictly and extensively than ever before since seafood importers recently seem to tend to disguise imported fish as domestic ones to get a higher price. 8.2

TRADE

Over the past half a century, the Korean International Trade Association (KITA: global.kita.net) has played a central role in Korea’s international trade and has grown into a trade promotion agency. KITA provides a variety of direct services such as business arrangements and trade consulting. It also assists trading companies in resolving grievances by reporting them to relevant government authorities. KITA enhances public awareness on the significance of trade in order to foster and promote Korea's commercial potential with the global community. It has been and will continue to be the driving force behind Korea's international trade during the 21st century, building the necessary infrastructure through the training of trade experts, establishing cyber trade infrastructure, hosting international special exhibitions, and implementing new trade strategies. KITA’s main responsibilities include the support of overseas marketing, international trade cooperation, trade information/statistics and research, and education of international trade specialists. The KITA’s Trade Statistics have always been provided free of charge, but recently it became a pay service. Korea’s trade statistics provided by KITA contains trade overviews (balance of trade, terms of payment, trade and all companies), trade by commodity (all commodities, specific commodities, all countries, selected countries and all Korean companies), trade by country and trade by continent/trade block. KITA has seven overseas branches: New York, Washington, Brussels, Beijing, Shanghai, Tokyo and Singapore. 50

8.3

SAFETY AND QUALITY CONTROL

In recent years, seafood safety in processing plants became a growing concern. Producing safe seafood and protecting it from hazards on production sites and during the processing procedures, is the main focus of the seafood safety policies. Now in various stages of development and implementation by Koreaâ&#x20AC;&#x2122;s seafood producers and processing organizations, government-recognized seafood productionand processing sites safety programs are technically based on the internationally accepted food safety control system called Hazard Analysis Critical Control Point (HACCP). Government recognition of HACCP-based seafood safety programs may enhance Korea's domestic and international reputation for seafood safety and quality. This, in turn, could mean expanded markets for Korean fish products. Responding to food safety concerns of consumers regarding international trade requirements, seafood safety programs have been in development by Korean government and/or government-sponsored research institutes since the middle 1990s. The Korean seafood safety program provides fishery and seafood processing organizations with the opportunity to develop strategies and tools to educate fishermen, sea farmers and processors, and to implement the programs. The Korean seafood safety program is administered by the National Fishery Product Quality Inspection Service (NFPQIS: www.nfpqis.go.kr) under the law of seafood quality control and the food safety and sanitary law. All imported fish and fish products are subject to inspection of the NFPQIS. The law also provides a legal basis to introduce HACCP (hazard analysis critical control point) by establishing rules for securing seafood safety and harmonizing with the international standards. Registered seafood processing companies should comply with the HACCP system. If they do, the government issues a certification of HACCP implementation. 8.4

RESEARCH AND DEVELOPMENT

The National Fisheries Research and Development Institute (NFRDI) carries out fisheries scientific research and development in many fields including resource management, aquaculture development and disease control, red tide control, artificial reef development and management, processing technology development, and international cooperation of fisheries research. In addition, NFRDI controls foreign live small fish and fertilized fish eggs imported for the purpose of aquaculture and fisheries resource enhancement. The Korea Maritime Institute (KMI), sponsored by the government, performs research and development in the field of marine socio-economic policy. Its research includes overall marine policy, domestic and international trends of marine affairs, marine environment policy, marine logistics, port development and management, fisheries resource management, trade and marketing of seafood, integrated fishing village development, ocean tourism, and integrated coastal management.

Korea Institute of Marine Science & Technology Promotion (KIMST) is a government sponsored institute funded by the special tax for agricultural and fishing village development. KIMST carries out fisheries-specific research and development such as; (i) allocation of the research fund; (ii) research planning and coordination; (iii) evaluation/management of research results; and (iv) dissemination and commercialization of developed technologies. In 2004, 83 projects were funded with 6.1 billion won (US$6.1 million). As of 2004, the output produced includes 23 international patents (13 applications and 10 registrations) and 261 domestic patents (164 applications and 97 registrations). Table 43:

Projects and Funds of Fisheries-Specific R&D

(Unit: No., million won, %) 2001 No. of projects

Total

Development Policy Research

2003

2004

04/03(%)

7.8

5 631

6,136

5 348

6 100

14.1

9.5

4 888

5,351

4 634

5 350

15.5

No. of projects

100

Budget

743

785

714

750

5.0

Budget

Technology

2002

No. of projects Budget

Source: Ministry of Marine Affairs and Fisheries. 8.5

DISTRIBUTION AND MARKETING

Korean fisheries cooperatives system consists of the National Federation of Fisheries Cooperatives (NFFC), comprising 72 regional fisheries cooperatives (RFC) and 22 fishery-specific cooperatives (FSC). RFCs are primarily composed of a large number of small-scale on-shore fishing operators (including sea farmers), who are the main targets for government fishery-support policies such as public financial transfers, while FSCs are organized by large fishing firms. RFCs and FSCs operate landing-port cooperative markets and mutual-banking businesses in landing areas. NFFC owns and manages the Nohryangjin fish wholesale market in Seoul, which is the second largest consumption-area for this type of market (legal person) following the Garakdong agricultural and fishery market under the control of Seoul city (agricultural and fishery distribution corporation) and NFFC also operates direct fish markets and credit banks in the urban areas. 8.6

INFORMATION OF SEAFOOD PRICE AND TRADE

Economic information on seafood is available through Korea agro-fisheries trade corporation (www.at.or.kr). All partakers in food distribution and trade are provided with information services regarding seafood prices, trade by commodity, public relations, purchase and release of seafood, and financial support. 52

The Korea agro-fisheries corporation (KAFC) carries out, on behalf of the government, the activity of withdrawing part of seafood supplies from the markets by holding them in refrigerated storage facilities until prices go up again. However, KAFCâ&#x20AC;&#x2122;s role in price stabilization becomes increasingly difficult and inefficient since the significant presence of import tends to disrupt the local/domestic market in an uncertain manner.

ANNEX A:

FISHING VESSEL BUYBACK PROGRAM

Table 1: Fishing Vessel Buyback Program and Crew Support (Unit: million won) International Regulation Buyback Unemployed crew support Vessel Budget Vessel Budget Total

General Coastal Buyback Unemployed crew support Vessel Budget Vessel Budget

1 328

573 634

9 200

69 906

1 952

216 909

307

28 977

1997

135

27 200

1998

159

27 513

1999

652

331 496

2 415

10 654

15 180

2000

1 566

369

7 096

134

22 500

2001

514

196 786

4 975

40 442

105

10 811

2002

131

43 786

1 441

11 714

211

41 283

2003

110

19 011

1994 1996

2004 725 24 434 Source: Korea Ministry of Marine Affairs and Fisheries, 2004 Major Statistics of Maritime and Fisheries, 2005.

ANNEX B:

CATEGORIES OF PROCESSED SEAFOOD

Table 2: Frozen Seafood Item Prototype-frozen

Spanish mackerels, Jack mackerels, hickory shad, shrimp, crab Semi dressed : tuna, sea eel, arabesque greenling, puffer

Processed frozen

Dressed : cods, salmon, hair tail, mud fish Fillet : Alaska Pollack, banded shrimp, monk fish, cuttle fish Other : chunk, slice, dice, loin

Source: Korea Fisheries Association, Fisheries Year Book, 2006. Table 3: Dried Seafood Item Plain dried

Squid, shrimp, sharkâ&#x20AC;&#x2122;s fin

Boiled and dried

Anchovies, sea cucumber, abalones, adductor muscle of shellfish

Salted and dried

Dried redlip croaker, red horsehead, flounder, brown croaker, cod

Frozen and dried

Red cod, agar

Boiled, roasted and dried

Skip jack tuna, mackerels, sardine

Source: Korea Fisheries Association, Fisheries Year Book, 2006. Table 4: Salted Seafood Item Salted and preserved fish

Mackerels, saury, hair tail, croaker, sardine, anchovy

Salted and preserved roe

Cod roe, salmon roe, herring roe, caviar

Salted and preserved seaweeds

Sea mustard

Source: Korea Fisheries Association, Fisheries Year Book, 2006.

Table 5: Canned Seafood Item Canned boiled

Salmon, mackerels, saury, Spanish mackerels, oyster, short neck clam

Canned seasoned

Saury, bai top shell, squid, shell fishes

Canned in oil

Tuna, salmon, mackerels fillet, anchovies

Canned smoked in oil

Oyster, short neck clam, tuna, sharp toothed eel

Other

Canned vinegar, canned butter and source, canned jelly and source

Source: Korea Fisheries Association, Fisheries Year Book, 2006. Table 6: Fish Pastes Item Fish cake

Sausage, kamaboko, chikuwa, fried fish cake, fish ball

Fish cake sausage

Tuna, skip jack tuna, mackerel, saury

Fish cake ham

Tuna, whale

Fish cake hamburger

Cod, mackerels

Source: Korea Fisheries Association, Fisheries Year Book, 2006. Table 7: Smoked Seafood Item Cold smoking

Herring, salmon, trout, yellow tail, cod, arabesque greenling

Hot smoking

Eel, squid

Source: Korea Fisheries Association, Fisheries Year Book, 2006. Table 8: Fermented Seafood Item Salted-fermented

Pickled anchovy, pickled sardine, Alaska pollack guts, Alaska pollack roe

Fermented fish sauce

Anchovy, sand ell

Salt-fermented fish

Flounder, sushi, kaszke, nukazke

Source: Korea Fisheries Association, Fisheries Year Book, 2006.

Table 9: Flavor-Seasoned Seafood Item Salted

Soy-sauce mixed with vinegar, boiled sugar

Boiled

Beef boiled down in soy sauce, steamed favor-seasoned

Flavor-seasoned dried

Squid, laver, etc

Source: Korea Fisheries Association, Fisheries Year Book, 2006.

ANNEX C:

CONSUMER PURCHASE PATTERNS AND PERFERENCES

Table 10: Frequent Purchase Items (Unit: person, %) Species

Response(person)

Ratio (%)

Hair tail

417

16.8

Mackerel

475

19.2

Croaker

383

15.5

Saury

179

7.2

Squid

227

9.2

Other

795

32.1

Total 2 476 100.0 Source: Ge-Im Lee, Seong-Kwae Park et al, Supply and Demand Projection for Fishery Products, Ministry of Marine Affairs and Fisheries, 2003. Table 11: Frequent Purchase Items in Summer (Unit: person, %) Species

Response(person)

Ratio (%)

Hair tail

109

Mackerel

Croaker

Saury

Squid

Other

161

Total 491 491 Source: Ge-Im Lee, Seong-Kwae Park et al, Supply and Demand Projection for Fishery Products, Ministry of Marine Affairs and Fisheries, 2003. Table 12: Frequent Purchase Item in Winter (Unit: person, %) Species

Response(person) Ratio (%) Hair tail 44 5.9 Mackerel 76 10.0 Croaker 67 8.9 Squid 61 8.1 Alaska Pollack 275 36.6 Other 299 30.5 Total 752 100.0 Source: Ge-Im Lee, Seong-Kwae Park et al, Supply and Demand Projection for Fishery Products, Ministry of Marine Affairs and Fisheries, 2003.

Table 13: Purchase Type (Unit: person, %) Response(person)

Ratio (%)

Raw fish and handling at home

185

20.9

Handled at the markets

641

72.4

5.5

Semi-ready-made

0.2

Cooked

0.3

Other

0.6

Handled and Packed at the market

No response

(4)

Total 885 100.0 Source: Ge-Im Lee, Seong-Kwae Park et al, Supply and Demand Projection for Fishery Products, Ministry of Marine Affairs and Fisheries, 2003. . Table 14: Price Satisfaction (Unit: person, %) Fish Too expensive Fresh 169(19.4)

Moderately expensive 475(54.4)

Average 218(25.0)

A little cheap 9(1.0)

Very cheap 2(0.2)

No response (16)

Total 837(100.0)

Dried

160(18.3)

399(45.6)

300(34.3)

14(1.6)

2(0.2)

(14)

875(100.0)

Seaweed

69(11.4)

295(34.0)

403(46.4)

66(7.6)

5(0.6)

(21)

868(100.0)

Processed 58(6.8) 234(27.4) 475(55.6) 77(9.0) 11(1.3) (34) 855(100.0) Source: Ge-Im Lee, Seong-Kwae Park et al, Supply and Demand Projection for Fishery Products, Ministry of Marine Affairs and Fisheries, 2003. Table 15: Quality Satisfaction (Unit: person, %) Fish Very A little Average A little unsatisfied unsatisfied satisfied Fresh 15(1.7) 208(24.0) 478(55.2) 146(16.9)

Very satisfied 19(2.2)

(No response) (23)

Total 866(100.0)

Dried

18(2.1)

136(15.7) 495(57.3) 189(21.9)

26(3.0)

(25)

864(100.0)

Seaweed

20(2.3)

137(15.9) 493(57.4) 183(21.3)

26(3.0)

(30)

859(100.0)

Processed

49(5.8)

188(22.1) 495(54.0) 139(16.4)

15(1.8)

(39)

850(100.0)

(Unit: person, %)Source: Ge-Im Lee, Seong-Kwae Park et al, Supply and Demand Projection for Fishery Products, Ministry of Marine Affairs and Fisheries, 2003.

Table 16: Frequency of Packed Seafood Purchase (Unit: person, %) Response(person) One time a week

Ratio (%)

8.5

1~3 times a month

190

21.5

One time a few month

197

22.3

Few purchases

422

47.7

(No response)

(5)

Total 884 100.0 Source: Ge-Im Lee, Seong-Kwae Park et al, Supply and Demand Projection for Fishery Products, Ministry of Marine Affairs and Fisheries, 2003. Table 17: Reason for not Purchasing Unpacked Seafood (Unit: person, %) Response(person)

Ratio (%)

No sales of packed seafood

9.9

Convenient for mass purchase

5.5

No packed fish meat part desired

2.0

Direct confirmation of freshness

655

80.7

2.0

Other (No response)

(77)

Total 812 100.0 Source: Ge-Im Lee, Seong-Kwae Park et al, Supply and Demand Projection for Fishery Products, Ministry of Marine Affairs and Fisheries, 2003. Table 18: Preference on Chilled/Frozen Seafood (Unit: person, %) Response(person)

Ratio (%)

Chilled

659

74.7

Frozen

6.4

167

18.9

No discrimination between chilled and frozen (No response)

(7)

Total 882 100.0 Source: Ge-Im Lee, Seong-Kwae Park et al, Supply and Demand Projection for Fishery Products, Ministry of Marine Affairs and Fisheries, 2003.

Table 19: Reason for Fresh/Chilled Seafood (Unit: person, %) Response(person)

Ratio (%)

Better taste

248

30.0

Freshness

502

60.8

Fast cooling

8.0

Other

1.2

(No response)

(63)

Total 826 100.0 Source: Ge-Im Lee, Seong-Kwae Park et al, Supply and Demand Projection for Fishery Products, Ministry of Marine Affairs and Fisheries, 2003. Table 20: Frequency of Consuming Processed Seafood (Unit: person, %) Response(person)

Ratio (%)

Often

164

18.6

From time to time

564

63.8

Rarely

156

17.6

(No response)

(5)

Total 884 100.0 Source: Ge-Im Lee, Seong-Kwae Park et al, Supply and Demand Projection for Fishery Products, Ministry of Marine Affairs and Fisheries, 2003. Table 21: Reasons for Consuming Processed Seafood (Unit: person, %) Response(person) Better taste

Ratio (%)

10.3

376

77.5

Low-priced

4.5

Other

7.6

Convenient for Cooking

(No)

(404)

Total 485 100.0 Source: Ge-Im Lee, Seong-Kwae Park et al, Supply and Demand Projection for Fishery Products, Ministry of Marine Affairs and Fisheries, 2003.

Table 22: Seafood Cuisine Preferred (Unit: person, %) Response(person)

Ratio (%)

Roasted

498

43.0

Hard-boiled

230

19.9

7.9

Sashimi

112

9.6

Pot stew

154

13.3

6.3

Fried

Other

Total 1,161 100.0 Source: Ge-Im Lee, Seong-Kwae Park et al, Supply and Demand Projection for Fishery Products, Ministry of Marine Affairs and Fisheries, 2003. Table 23: Confirmation of the Origin of Country Labeling (Unit: person, %) Response(person)

Ratio (%)

Purchase with no confirmation

6.4

Confirmation but little concern

367

41.5

Purchasing only domestic with confirmation

442

49.9

Other

2.1

(No response)

(4)

Total 885 100.0 Source: Ge-Im Lee, Seong-Kwae Park et al, Supply and Demand Projection for Fishery Products, Ministry of Marine Affairs and Fisheries, 2003. Table 24: Preference of Wild or Farmed Fish (Unit: person, %) Response(person) Wild

Ratio (%)

589

66.7

2.6

No discrimination

216

24.5

Just do not know

6.2

(No response)

(6)

Cultured

Total 883 100.0 Source: Ge-Im Lee, Seong-Kwae Park et al, Supply and Demand Projection for Fishery Products, Ministry of Marine Affairs and Fisheries, 2003.

Table 25: Reason for Preferring Wild to Farmed Fish (Unit: person, %) Response(person) Better taste Better nutrient No harmful element

458

66.7

12.4

141

20.5

0.6

Other (No response)

Ratio (%)

(201)

Total 688 100.0 Source: Ge-Im Lee, Seong-Kwae Park et al, Supply and Demand Projection for Fishery Products, Ministry of Marine Affairs and Fisheries, 2003. Table 26: Seafood Good for Health (Unit: person, %) Response(person) Fish with blue back

Ratio (%)

165

58.9

Croaker

5.7

Hair tail

7.5

Other

27.9

Total 280 100.0 Source: Ge-Im Lee, Seong-Kwae Park et al, Supply and Demand Projection for Fishery Products, Ministry of Marine Affairs and Fisheries, 2003.

ANNEX D:

TRADE

Table 27: Tariff Structure (2006)

Tariff rate (%)

No. of Items

Item

Frozen brown croaker

Pickled shrimps

Live sea bream, frozen seaweeds(13)

Live common sea bass

live brown croaker, frozen saury

Frozen skate

frozen squid

Live eel, frozen Alaska pollack(3), marine live resources(3), fish juice, fish soup

Fresh or chilled fishes(38), fillets(6), dried or salted or 20

249

smoked(38), crustacea(19), mollusca(60), Seaweeds(25), in airtight containers(63)

Frozen blue crab, frozen crab(other)

Seed oyster, fish waste, fish meal, crude fish meal (2)

Brine shrimp

Fish liver oil, fish oil/powder(5)

Total

407

Live Fishes(24), frozen fishes(51), fillets(11), mollusca(5), Frozen laver(1) Clam worm(2), Mud Turtle, coral, shell(15), agar(3), whale oil(2), flavor seasoned laver(2)

Source: Korea Ministry of Marine Affairs and Fisheries (www.momaf.go.kr).

Table 28:

Adjustment Tariff Rates (2006)

Item

Basic Tariff

Adjustment tariff (%)

(%)

2001

2002

2003

2004

2005

2006

Live eel

Live sea bream

Live common sea bass

Live croakers

Frozen Alaska Pollack

Frozen saury

Frozen skate ray

Frozen brown croaker

Frozen shrimp

Pickled shrimp

Frozen squid

Frozen rouple squid

Demersal fish

Other

55 35

Source: Korea Ministry of Marine Affairs and Fisheries (www.momaf.go.kr).

Table 29: Distant-Water Fisheries Export by Main Species (Unit: US$ thousand) Year

Total

Tuna

Cod

Squid

1960

153

1970

38,008

35,694

2,314

1980

351,865

196,581

24,209

131,075

1990

516,880

329,357

45,314

14,315

127,894

1995

539,513

298,382

88,964

45,961

29,804

79,402

1998

529,540

318,934

48,798

24,655

35,674

101,479

1999

429,325

292,124

32,972

16,189

37,583

50,457

2000

538,972

350,723

39,417

39,340

52,318

57,174

2001

389,688

273,165

24,208

28,474

42,241

21,600

2002

414,478

278,377

20,111

23,237

58,047

24,706

2003

365,422

231,500

9,405

39,304

72,958

12,255

2004

395,534

260,744

3,221

54,230

67,854

9,485

Source: Korea Fisheries Association, Fisheries Year Book, 2006.

Table 30: Seafood Exported to Japan by Main Species (Unit: US$ thousand) Year

Total

Tuna

Sea Eel

Oysters

Bastard

Ark Shell

Fusiform

Laver

Others

1991

1 163 059 171 799

68 289

39 920

1 735

85 466

29 853

226 765 771

1993

1 168 241 239 559

68 757

45 426

8 081

82 473

53 962

1 472 668 511

1994

1 278 552 246 609 104 320

50 740

13 061

92 542

54 934

4 037 712 309

1995

1 280 984 227 267 108 774

60 458

21 388

76 899

47 297

811 738 090

1996

1 217 476 267 974 104 791

55 357

19 642 101 173

34 823

825 632 891

1997

1 017 530 256 422 101 297

39 552

16 545

62 789

30 848

2 433 507 644

1998

895 512 205 135

81 709

44 315

24 330

54 827

39 091

2 869 443 245

1999

1 155 211 262 951

93 485

66 894

34 523

49 326

38 011

5 698 604 323

2000

1 125 248 281 403

90 718

85 321

35 663

49 945

29 777

11 343 541 048

2001

924 873 226 053

73 208

83 328

39 209

41 698

30 178

14 586 416 613

2002

823 118 242 155

56 992

39 039

39 081

28 485

32 449

11 946 372 972

2003

740 447 192 469

51 242

35 046

47 047

24 865

35 601

14 748 399 429

2004

834 649 219 255

51 271

39 842

54 609

19 396

29 863

17 374 403 039

Source: Korea Ministry of Marine Affairs and Fisheries, Major Statistics of Marine Affairs and Fisheries, 2005.

Table 31: Seafood Import from China by Main Species (Unit: US$ thousand) Year Total Croakers (frozen) 1991

29 003

Hair Monk small blue puffer Common Tail fish octopus crab (frozen) Seabass (frozen) (frozen) (frozen) (frozen) (frozen) 1 664 6 1, 243 -

other

1993

44 466

2 471

158

741

41 096

1994

111 831

2 287

2 527

23 135

6 746

77 136

1995 128 874

4 224

2 920

15 060

7 475

1 696

97 496

1996 217 354

16 244

1 357

5 486

44 358

9 961

5 690 134 258

1997 271 543

34 248

30 316

14 690

28 577

4 558

8 804 150 350

1998 197 050

52 148

22 164

11 642

18 487

3 380

4 229

1999 413 270

130 848

23 649

14 858

31 377

6 561

8 917 197 060

2000 486 841

140 762

33 755

17 160

31 262

9 386

11 789

10 823 232 904

2001 634 449

146 530

45 339

16 530

24 117

20 433

18 043

17 295 336 162

2002 719 314

137 497

65 175

18 622

35 081

41 848

13 491

16 649 390 951

2003 713 538

126 948

45 192

15 692

40 429

37 596

7 529

24 091 416 061

26 090

85 000

2004 909 536 129 600 52 765 22 744 53 277 64 706 8 907 34 049 543 388 Source: Korea Ministry of Marine Affairs and Fisheries, Major Statistics of Marine Affairs and Fisheries, 2005. Table 32: Export Forecast of Major Fish Species (Unit: M/T, %) 2006 Flat fish

2007

2008

2009

2010

2011

2012

AGR

3 524

3 591

3 660

3 730

3 802

3 875

3 950

1.9

Tuna

177 173

178 236

179 306

180 381

181 464

182 553

183 648

0.6

Squid

96 092

99 782

103 614

107 592

111 724

116 014

120 469

3.8

246 369

248 439

250 525

252 630

254 752

256 892

259 050

0.8

51 455

50 796

50 146

49 504

48 870

48 245

47 627

-1.3

Laver

7 202

7 386

7 576

7 769

7 968

8 172

8 382

2.6

Sea Eel

9 852

9 946

10 042

10 138

10 235

10 334

10 433

1.0

Oysters Sea mustard

Note: AGR = Annual Growth Rate (%). Source: Ge-Im Lee, Seong-Kwae Park et al, Supply and Demand Projection for Fishery Products, Ministry of Marine Affairs and Fisheries, 2003.

Table 33: Import Forecast of Major Fish Species (Unit: M/T, %) 2006

2007

2008

2009

2010

2011

2012

69 339

71 114

72 934

74 802

76 716

78 680

80 695

2.6

263 272

274 856

286 950

299 575

312 757

326 518

340 885

4.4

45 172

48 063

51 139

54 412

57 894

61 599

65 542

6.4

2 571

2 705

2 835

2 971

3 114

3 263

3 420

4.8

Mackerels

41 132

43 106

45 175

47 343

49 616

51 997

54 493

4.8

Shrimps

67 878

70 865

73 983

77 238

80 636

84 184

91 756

4.4

Croakers Alaska Pollack Hair Tail Spanish mackerels

AGR

Note: AGR = Annual Growth Rate (%). Source: Ge-Im Lee, Seong-Kwae Park et al, Supply and Demand Projection for Fishery Products, Ministry of Marine Affairs and Fisheries, 2003. Table 34: Self-Sufficiency Forecast of Major Fish Species (Unit: %) 2008 2012 Flounders 73 62 Alaska Pollack 35 32 Croakers 26 23 Hair Tail 63 57 Mackerels 88 84 Spanish mackerels 99 97 Saury 83 77 Skate rays 64 60 Anchovy 83 78 Shrimps 26 25 Crabs 42 37 Squid 108 104 Bastard 80 78 Black rockfish 118 124 Oysters 82 80 Short neck 114 105 Laver 113 117 Sea mustard 133 130 Source: Ge-Im Lee, Seong-Kwae Park et al, Supply and Demand Projection for Fishery Products, Ministry of Marine Affairs and Fisheries, 2003.

ANNEX E:

SEAFOOD DISTRIBUTION

Table 35: Standard Shipment Items and Distribution Standards Item

Unit

Quantity

Dried anchovy Dried Alaska Pollack Dried squid Dried croaker Laver Dried sea mustard Dried threaded sea mustard Dried cutting sea mustard Dried slices of file fish Dried shrimps Dried octopus Dried slices of whiting Dried sand lance Salted sea mustard

bag, box bag, box bag, box box bag bag bag bag bag box set sheet box bag, box

500g, 1kg, 2kg 5 fish, 10 fish 5 fish, 10 fish 5 fish, 10 fish 10 sheets 5 sheets 20g, 50g, 100g, 250g 20g, 50g 200g, 500g, 1kg 500g, 1kg, 2kg, 3kg 5 fish, 10 fish 5 sheets, 10 sheets 500g, 1kg, 2kg, 3kg 200g, 500g, 1kg, 3kg, 5kg, 10kg 1kg, 3kg, 5kg, 10kg 1kg, 3kg, 5kg, 10kg 200g, 500g, 1kg

Pickled shrimps Pickled anchovy Pickled oyster

tong, bottle " "

Packing materials Vinyl, cardboard Vinyl, cardboard Vinyl, cardboard Cardboard Vinyl Vinyl Vinyl Vinyl Vinyl Cardboard Vinyl, cardboard Vinyl, cardboard Cardboard P.E film, cardboard

P.E or glass container P.E or glass container Glass container, synthetic resins Oysters tong, bag 200g, 500g, 1kg, 3kg, Vinyl, P.E container, P.S box 10kg Short neck sack 500g, 1kg, 3kg, 5kg, P.E net 10kg Ark shell tong 500g, 1kg, 3kg, 5kg, Zinc, styrofoam 10kg Cockle sack 500g, 1kg, 3kg, 5kg, P.P sock 10kg Sea squirts tong 500g, 1kg, 3kg, 5kg, Styrofoam 10kg Sea mussel sack 500g, 1kg, 3kg, 5kg, cotton fabrics, synthetic 10kg resins blue crab box 3kg, 5kg, 10kg Cardboard, PVC frozen squid " 2kg, 4kg, 8kg Cardboard Alaska Pollack " 1kg, 3kg, 5kg, 10kg Styrofoam, cardboard Croakers " 1kg, 3kg, 5kg, 10kg Styrofoam, cardboard Mackerels " 1kg, 3kg, 5kg, 10kg Styrofoam, cardboard Hair tail " 1kg, 3kg, 5kg, 10kg Styrofoam, cardboard Spanish mackerels " 1kg, 3kg, 5kg, 10kg Styrofoam, cardboard Stalked Sea Squirts " 1.5kg, 2kg Styrofoam Source: Korea Fisheries Association, Fisheries Year Book, 2006. 69

Table 36: Fisheries Production and Sale through Fisheries Cooperatives (Unit: M/T, million won, %) Year

1992

Total production 2 230 874

Quantity Consignment sales 1 503 430

67.4

Production value 2 465 682

Value Consignment sales 1 642 018

1993

2 564 258

1 699 468

66.3

2 852 502

1 881 510

66.0

1994

2 558 483

1 622 668

63.4

3 241 172

2 171 918

67.0

1995

2 421 664

1 564 960

64.6

3 127 524

2 187 373

69.9

1996

2 498 632

1 711 736

68.5

3 378 401

2 404 055

71.1

1997

2 382 540

1 489 110

62.5

3 406 168

2 119 336

62.2

1998

2 084 967

1 370 341

65.7

3 239 139

2 023 295

62.5

1999

2 100 091

1 482 266

70.6

3 111 855

3 039 989

65.6

2000

1 862 958

1 337 756

71.8

3 136 780

2 131 779

68.0

2001

1 926 067

1 446 237

75.1

3 288 773

2 286 678

69.5

2002

1 895 842

1 338 966

70.6

3 395 836

2 233 559

65.8

2003

1 942 451

1 244 003

64.0

3 698 203

2 101 975

56.8

Rate

Rate 66.6

2004 2 019 701 1 244 033 61.5 3 994 034 2 287 488 57.2 Note: Ratio (%) = cooperatives consignment sales (quantity or value) / total production (quantity or value) x 100 Source: Korea Fisheries Association, Fisheries Year Book, 2006.

ANNEX F:

USEFUL ADDRESSES

List of Government Institutions Ministry of Marine Affairs and Fisheries Address: 140-2 Hyundai B/D, Gae-dong, Jongro-gu, 110-793, Seoul, Republic of Korea Tel : +82 (02) 3674-6114 Homeoage: www.momaf.go.kr National Fisheries Research and Development Institute Address: 408-1 Sirang-ri, Gijang-eup, Gijang-gun, Busan, 619-902, Republic of Korea Tel +82 (05) 720-2114

Fax: +82 (05)-2054-5

Homepage: www.nfrdi.re.kr List of Fishery Cooperative, Association and Corporation National Federation of Fisheries Cooperatives Address: 11-6, Shinchon-dong, Songpa-gu, Seoul, 429-882, Republic of Korea Tel 02-2240-2114/3114 Homepage: www.suhyup.co.kr Korea Fisheries Association Address: A-509, Samho B/D, 275-1, Yangjae-dong, Seocho-gu, Seoul, 137-940, Republic of Korea Tel: +82 (02) 589-0601 Homepage:

Fax : +82 (02) 589-1700

www.fishale.co.kr

Korea Deep Sea Fisheries Association Address: A-6, Samho B/D, 275-1, Yangjae-dong, Seocho-gu, Seoul, 137-940, Republic of Korea Tel: +82 (02) 589-1621 Homepage:

Fax: +82 (02) 589-1630

www.kodefa.or.kr

Korea Fishery Distribution & Processing Association Address: 503, Samho B/D-A, 275-1, Yangjae-dong, Seocho-gu, Seou, 137-940l, Republic of Korea Tel: +82 (02) 589-1634

Fax: +82 (02) 589-1364

Homepage: www.seafood.org

Korea Fishery Trade Association Address: 1103, aT center, 232, Yangjae-dong, Seocho-gu, Seoul, 137-787, Republic of Korea Tel: +82 (02) 6300-8901

Fax: +82 (02) 6300-8900

Homepage http://www.kfta.net Kangdong Fisheries Corporation Address: 600, Garak-dong, Songpa-gu, Seoul, 138-160, Republic of Korea Tel: +82 (02) 3435-3300

Fax: +82 (02) 3435-3360

Homepage: www.kd-fishery.co.kr Seoul Agricultural & Fisheries Product Corporation Address: 600, Garak-dong, Songpa-gu, Seoul, 138-160, Republic of Korea Tel: +82 (02) 3435-0400

Fax : +82 (02) 3435-0595

Homepage: www.samaco.co.kr Busan Common Fish Market Address: 691-3, Nambumin-dong, Seo-gu, Busan, 602-740, Republic of Korea Tel: +82 (051) 254-8961

Fax: +82 (051) 243-8961

Homepage: www.bcfm.co.kr Noryangjin Fisheries Wholesale Market Address: 13-8, Noryangjin-dong, Dongjak-gu, Seoul, 156-703, Republic of Korea Tel: +82 (02) 814-2211~2

Fax: +82 (02) 812-4940

Homepage: www.susansijang.co.kr Korea Agro-Fisheries Trade Corporation Address: aT center, 232, Yangjae-gong, Seocho-gu, Seoul, 137-787 Tel: +82 (02) 6300-1114

Fax: +82 (02) 6300-1600

Homepage: www.at.or.kr Korea Fishery Trade Association Address: 1103, aT center, 232, Yangjae-dong, Seocho-gu, Seoul, 137-787, Republic of Korea Tel: +82 (02) 6300-8901

Fax: +82 (02) 6300-8900

Homepage: www.kfta.net

List of Seafood Importers and Agents Company Kunhwa Susan

Name in charge So-Ill Oh

Main items surimi

Phone (Fax) 02-3474-5770

E-mail -

(02-3474-6174) Deok Hwa Ryu

Sug-Joon

Tong Ltd.

Chang

Geo-Young

Jung-Moon

pollack roe

051-208-4557~9 (051-208-4558)

bottom fish

051-247-9981/2

Kang Bong Shin

Oh-Hyun

Susan

Jung

Sang jin

Sang-Yun

Trading

Lim

Korean Foods

Noh-Sup

(051-254-9567) bottom fish

02-441-4141/3

(02-441-4144) salmon

02-572-9959

sj0603@chollian.net

(02-582-9834) bottom fish

Park

051-257-0966

ksc@koreanseafoods.co

(051-462-9027)

m khshin@yahoo.co.kr

Sea-World

Hae-Ryong

ribbonfish

051-257-9435

Co., Ltd.

Shin

octopus

(051-257-9304)

Seung Ji Trading

Yong-Hyo Ha

pollack roe

02-409-4307/8

Co., Ltd.

02-589-1731/8

wonilseafood@korea.co

(02-589-1730)

Wonil Trading

Doo-Young

Corp.

Jung

Global

Young-Chul

mackerel/redfish

02-586-5161/4

globalkim@korea.com

Seafoods

Kim

greenland turbot

(02-586-5165)

globalfish@korea.com

02-736-4328/9

luckysusan@korea.com

Co., Ltd.

salmon/mussel

(02-401-7714)

salmon/welkmeat sardin/loligo squid skate wing/fish roe + milt

Luckysusan

Jean Roh

mackerel/redfish

Co., Ltd.

(02-739-5689)

List of Seafood Exporters Company

Name

Phone

E-mail

Daeyeong Co., Ltd

Hyeon-su Kim

051-261-5331

daiyeong@daiyeong.co.kr

Boyang Co., Ltd

Gyu-jin Cho

061-682-9661

yujung0509@nate.com

Saekang Co., Ltd

Gi-il Bai

051-241-1851

sgc1851@hotmail.com

Korea Fishery Trade Association

Yeong-sik Jeon

02-6300-8901

kfta@kfta.net

Daeyeong Co., Ltd

Hyun-su Kim

051-261-5331

daiyeong@daiyeong.co.kr

Donghwa Susan

Jong-deok Kim

051-868-2771

donghwaf@donghwaf.co.kr

Jinhae Co., Ltd

Beom-yong Kim

051-941-2400

jinhaem@jinhaem.com

Samhwa Co., Ltd

Yong-hwan Jeon

051-263-7331

samhwams@cornet.net

Haejin Co., Ltd

Seok-min Sohn

051-831-1622

haejin@haejin.co.kr

Samhae Co., Ltd

Eung-hyo Lee

02-431-2345

master@samhae.co.kr

Dongwon Co., Ltd

Seong-taek Shin

02-589-3105

dwpusan303@dw.co.kr

Wonil Seafoods

Do-young Jung

02-589-1731

wonilseafood@korea.com

Woosung Co., Ltd

Gyeong-nam Kim

031-634-3105

laver@wooseong.co.kr

Chungwan Trade

Jeon-hee Lee

061-863-8558

ckt8558@hotmail.com

Source: Korea Fisheries Association, Fisheries Statistic Year Book, 2006.

GLOBEFISH MARKET RESEARCH PROGRAMME Effect of World Trade Organization’s Regulation on World Fish Trade (87p.)

Mar 2000

Vol.66

European Union Standards for Fishery Products (including EU duties) (248p.)

June 2000

Vol.67

The Ornamental Fish Market (91p.)

Oct 2000

Vol.68

The World Market for Frog Legs (44p.)

June 2001

Vol.65

Vol.69

Fishery Industry Profile – Thailand (76p.)

Nov 2001

Vol.70

The Fishery Industry in Greece (59p.)

Nov 2001

Vol.71

The German Market for Fish and Seafood (116p.)

Jan 2002

Vol.72

Fish Roe in Europe: Supply and Demand Conditions (47p.)

Nov 2002

Vol.73

Salmon – A Study of Global Supply and Demand (151p.)

July 2003

Vol.74

World Tuna markets (135p.)

May 2004

Vol.75

Fishery Industry Profile – Viet Nam (57p.)

July 2004

Vol.76

Fishery Industry in China (74p.)

Sept 2004

Vol.77

Overview of Organic Markets: an Opportunity for Aquaculture Products? (98p.)

Jan 2005

Vol.78

Seafood Price Indices (44p.)

Apr 2005

Vol.79

World Market of Tilapia (28p.)

Apr 2005

Vol.80

Fishery Industry Profile – Russia (70p.)

June 2005

Vol.81

Trends in European Groundfish Markets (153p.)

Nov 2005

Vol.82

Freshwater Species on the European Market (119p.)

Dec 2005

Vol.83

Fish Supply and Demand in the Near East Region (67p.)

Jan 2006

Vol.84

The Market for Nile Perch (94p.)

Apr 2006

Vol.85

Supermarkets and the Artisanal Fisheries Sector in Latin America (79p.)

Apr 2006

Markets and Marketing of Aquaculture Finfish in Europe (50p.)

Aug 2006

Oct 2006

Nov 2006

Vol.86

Focus on the Mediterranean Basin Vol.88 Republic of Korea – Fishery Industry Profile (Post Harvest Sector) (72p.) Focus on the Mediterranean Basin 1) Prices include air mail delivery Vol.87

Lobster Markets (92p.)

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GLOBEFISH RESEARCH PROGRAMME Trends in European Groundfish Markets Volume 81

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Trends in European Groundfish Markets

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