Market Information   >   Food News Clipping

Food News Clipping

November 13 - 16, 2023


FAS/Seoul Monitoring of Media Reporting on Agricultural Issues 

Today's Date: Monday,  November 20,  2023

For Coverage:  November 13 ~ 16, 2023

 “Will the Size of the Food Industry Grow in 2023?  No”... Food Industry Market Size Nominal GDP Rose Significantly, but Real GDP Fell
Summary:  On November 15th, at the “2024 Food and Restaurant Industry Outlook”, Dr. Sanghyo Kim of the Korea Rural Economic Institute discussed the current state and outlook for each food industry segment and what food industry managers think.  He noted that while the size of the food market is expected to be 148 trillion KRW in 2023 (roughly 15 trillion won greater than 2022), it is hard to say that the market actually grew, as the growth is mostly due to price increases rather than demand.  Dr. Kim noted the rapid growth of the domestic protein food market size, as well as for meal kits, sprout vegetables and cut fruit salads.  Food managers believe that the raw material supply and price conditions have had the most influence on sales in 2023 followed by domestic economic situation, minimum wage increase and shortened working hours.  The presentation also assessed management difficulties, including raw material purchase price, social burden of increase in consumer pricing, the high labor costs, high dollar exchange rate, and a low operating profit ratio.  Overall, food industry managers believe that the procurement of raw materials is the most important policy the government should pursue for the future growth of the sector, followed by support for entering overseas markets. 

Food Trade Agency Launches Global Low-Carbon Diet Campaign
Summary:  The Korea Agro-Fisheries & Food Trade Corp announced on Wednesday that it launched a consultative body to promote low-carbon diets.  The aim of the new Low-carbon Diet Campaign Forum is for the voluntary cooperation of officials from around 600 institutions, including K-food buyers and international Korean organizations, to spread low-carbon diet practices.  The agency has designated 11 individuals from various countries to serve as goodwill ambassadors in an effort to expand exports and the adoption of the low-carbon diet.  The members of the organization will aim to minimize carbon emissions in all stages of the food system – from production to consumption. 


Container Shipping Costs for U.S. West Coast Rise 7 Percent in October
Summary:  According to data from the Korea Customs Service, the average shipping cost for a 40-foot container from South Korea to the U.S. west coast increased by 7.1 percent on-month.  While this is the second consecutive month of increased costs, if looking at a year-on-year basis, the costs are down 58.6 in October.

Let's Check Lettuce, Spinach, Clams, Oysters… Efforts to Stabilize Prices in Seoul's Shopping Basket

Summary:  Beginning November 15th, the city of Seoul is examining the prices of 30 commonly used food items to ease the burden on consumers preparing meals at home.  60 individuals will oversee around 100 traditional markets to track price changes, aiming to use this data in measures promoting price stability.  The focus is primarily on 30 items, ranging from agricultural to marine foods like lettuce, carrots, potatoes, strawberries, shrimp, and crabs.  These products are not included in the government's existing 35 monitored items, thus broadening the scope for a more comprehensive understanding of price fluctuations.  If there's a significant price surge in the monitored food items, Seoul plans to collaborate with the national government for further action.  This might involve offering these items at reduced prices, especially if adverse weather conditions damage crops.  Additionally, they're not just looking at agricultural products; they're also identifying restaurants selling affordable food.  Once found, these restaurants will be labeled as 'Good Price Restaurants.'

The Later You Make Kimchi, the Lower the Cost… Autumn Cabbage Supply Stabilized

Summary:  Koreans traditionally engage in a yearly kimchi-making event between November and December, varying in time among families.  During this time, families typically gather to produce a significant amount of kimchi for the upcoming year.  Approaching this season, there's a belief that delaying the purchase of cabbage for kimchi-making might result in cost savings, as it's expected that cabbage prices will decrease towards the end of November.  The main ingredient's price surge earlier this year, reaching 9,000 KRW per cabbage, has now reduced to 2,736 KRW due to increased supply, aided by governmental support.  The Korea Rural Economic Institute forecasts a 7.6 percent decrease in cabbage production compared to last year, yet the overall supply will be similar.  Even though supply is similar, the supply will start later than usual, leading to more available cabbage by early December, not November.  This drop in cabbage prices is complemented by a good harvest of radish and garlic, contributing to a decreased overall cost for kimchi ingredients.  Beyond domestic agricultural factors, the government is also actively working to import ingredients to further drive down kimchi-making costs.  Despite these efforts, there's a slight decrease (1.7 percent) in people intending to make kimchi themselves, down to 63.3 percent from last year.  Conversely, the demand for buying pre-made kimchi, primarily due to convenience, has risen by 3.8 percent, reaching 29.5 percent compared to the previous year.

Next Year, Tariffs on Major Food Ingredients such as Processed Corn and Soybeans will be Lowered
Summary:  The Korean government aims to reduce tariffs on key food ingredients next year to alleviate costs within the food industry.  This includes processed corn, soybean, sugar, potatoes, modified starch, and sunflower seed oil.  Deputy Prime Minister Choo recently assessed ingredient prices, particularly those for kimchi production, ahead of the upcoming 'Kimchi making season'.  During this assessment, he engaged with industry representatives and visited markets to gather insights.  Choo highlighted the stability in global oil prices and noted a stability in major agricultural products, contributing to a decrease in consumer prices.  However, he acknowledged the unpredictability brought by factors like climate change and global conflicts.  Despite these uncertainties, responsible ministries are proactively examining the market and doing their best to deal with the unknown future.  
An official from the Ministry of Agriculture, Food, and Rural Affairs noted the stability of prices for kimchi ingredients, down by 10.4 percent compared to the previous year.  This encompasses 14 products, including cabbage, radish, pepper powder, pear, and salt.  Cabbage prices, for instance, dropped to 2,771 KRW compared to last year's 3,227 KRW.  Additionally, the price of salt used in kimchi-making decreased to 11,000 KRW per 5kg due to lower sea salt costs.  Choo mentioned recent changes in tariff regulations with the revision of the relevant presidential decree, stating that 10 imported fruits and food items will be applied to reduced tariffs starting from the 17th of this month, aiming to ease industry pressures.  The government also plans to decrease taxes on products like coffee and cocoa.  Newly lowered tariffs will apply to items such as banana, mango, grapefruit, butter, cheese, cocoa, chicken, green onion, grapefruit concentrate, and powdered milk.

Finally, expressing confidence, the Deputy Prime Minister affirmed the commitment to replicate efforts made in 2023 by striving to reduce prices for processed corn, soybean, sugar, potatoes, modified starch, and sunflower seed oil in 2024.

Processed Milk Sales Increase Unlike White Milk Sales

Summary:  In comparison to the decline in white milk sales among major dairy companies like Maeil and Namyang, there is an upward trend in the sales of processed milk.  The popularity of flavored processed milks such as banana, chocolate, strawberry, and coffee seems to be driven by the diverse options available to consumers, especially as white milk faces reduced popularity due to factors like price increases and a decline in fertility rates (as young children are the primary consumers of white fluid milk).  According to a Market Link market research report, white milk sales have seen a decrease since the start of COVID, marking a 12 percent decline in 2023 compared to previous years.  In contrast, processed milk sales are showing a different trajectory, experiencing either a slight increase or maintaining similar sales compared to the same period last year.  Banana milk has seen a 5 percent increase, strawberry milk a 7 percent increase, while coffee and chocolate milk have maintained sales levels similar to the previous year.  The success of processed milk is crucial for the survival of dairy companies.  Traditionally, white milk was considered an essential nutritional beverage for children and the elderly.  However, the market now offers a plethora of nutritional drinks, leading to a significant increase in competitors.  A representative from the dairy industry suggests that the effectiveness of processed milk with various flavors lies in its ability to attract consumers.

Children remain a key demographic for milk sales, and with their return to school after COVID, which increase their time spending outside of their house, they play a significant role in boosting sales, especially in channels such as convenience stores.  Convenience store milk sales have recorded a 7.57 percent increase compared to the previous year, in contrast to retail stores, which have seen a 0.35 percent decrease in milk sales.

"Rather than Spending 10,000 KRW for Lunch…” A Place Where Demand Soared

Summary:  Catering and food ingredient distribution companies are witnessing a surge in sales during the third quarter of 2023.  With the transition of COVID-19 to an 'endemic' status, large entities such as corporations and schools are turning to catering services.  Moreover, the rising cost of dining out has prompted individuals to seek more budget-friendly food options.  Prominent companies in the catering industry have reported heightened sales compared to the same period in the previous year.  CJ Freshway, for instance, achieved a notable 15.6 percent increase in sales, driven by growing demand from offices, schools, hospitals, and recreational facilities.  Other major companies, including Hyundai Green Food (6.3 percent increase), Shinsegae Food (5.3 percent increase), and Samsung Welstory (3.1 percent increase), have also experienced positive sales growth.  The shift from pandemic to endemic status has led to a reduction in remote work, bringing more people back to workplaces.  This, in turn, has resulted in an increased demand for dining options near workplaces.  Additionally, the general rise in consumer prices has created a financial pressure for individuals, prompting a search for more economical food choices.  Collectively, these factors have contributed positively to catering businesses in South Korea.

'Korean Laver' Exports Reach the Highest Record

Summary:  On November 13th, the Ministry of Oceans and Fisheries declared that the export value of seasoned laver had surpassed $701 million, surpassing the 2021 record of $700 million.  While traditionally consumed as a rice side dish in Korea, seasoned laver is now gaining global recognition as a low-calorie, healthy product.  The product, once primarily sorted by oil or salt content, is adapting to global preferences by expanding its range of seasonings, including barbecue and cheese flavors.

The Ministry of Oceans and Fisheries has actively promoted Korean laver on the global stage, securing certifications, organizing food export exhibitions, and ensuring food safety through radiation checks.  These efforts have led to a significant increase in laver-importing countries, doubling from 60 to 120 over the past 12 years.  The minister of the Ministry of Oceans and Fisheries emphasized that the entire production, processing, and supply chain for laver occurs in Korea, resulting in substantial economic success and contributing to the nation's development.  With the goal of sustaining this momentum, they are committed to achieving a $10 billion export target by 2027, as outlined in their laver industry promotion plan.  The ministry anticipates that this effort will further enhance the reputation of Korean laver products globally.


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