Cherries to Korea

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Phillip Georgios

Facilitator

Senior Global Engagement Manager

Australian Trade & Investment Commission

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Agribusiness Expansion Initiative

Suite of services to help clients expand and

diversify

Comprehensive sector/market info

online 24/7, self serve

Events and activities specifically for the agri-

food sector

Boots on the ground to work with you in multiple markets

Working with peak bodies and government agencies on agreed priorities and for seamless service

Helen Oh

Trade Commissioner Seoul

Australian Trade & Investment Commission

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Market Overview

Trade Korea is the 4th largest

trading

partner for Australia

Population51.8 million in 2020

Low birth rate (0.92)

EconomyGDP per capita in 2020 U$ 31,497

Eco growth rate 3.6% in 2021

(IMF Estimation)

KAFTA8th year of implementation

Tariff 0% for cherries

TrendsIncreased fruit import from Australia under

KAFTA

Covid-19Daily confirmed cases 1,500-2,200

Restriction level 4

Vaccine rollout 26.0% (2nd dose)

Market Overview

6

Consumer demands Distribution channel Considerations

• Increased fruit import from Australia under KAFTA

- Table grapes, citrus

• Ageing population and increasing number of single-person households.

– small purchasing unit

• Increasing demand for premium fruits

- Seeking new varieties

- Retail signboard on fruit variety

- SNS and viral marketing

• Increasing prominence of online platforms – e.g. Coupang, Naverand major retailers’ online stores

• Continuing importance of physical wholesale outlets and retail stores – e.g. Emart, Lotte Mart, Homeplus and Costco

• Decreased sales for fresh fruits in food service due to COVIDrestrictions on social gathering

• KAFTA tariff benefits

• Importance of food safety

• Strict regulations for quarantine inspection

• Korean buyers’ high standards for quality fruits

- hardness, sweetness, size

• Competition with Chilean cherries in price

• IFAM flights available in Melbourne and Sydney via Tokyo to Seoul.

Korea’s Cherries Import

Country 2016 2019 2020

Total 13,805 15,855 14,215

USA 12,376 11,501 10,807

Chile 690 4,155 3,120

Australia 310 13 87

Uzbekistan 150 113 124

New Zealand 279 71 67

Turkey - 8

• US is a major exporter (Air/Sea)

• Chilean export increased from 2019 following successful arrival of sea-freighted cherries

Korea’s total import volume for cherries in 2020: 14,215 tonnes

• Australian export increased from 2020 again with market access of mainland cherries in 2020

• Tasmanian cherries : 310 tonnes in 2016(Source : Korea International Trade Association)

Unit: Tonnes

Major Competitors

8

Country Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

USA

Air

Sea

Uzbekistan

Air

Turkey Air

Australia Air

Chile

Air

Sea

New Zealand

Air

Shipping methods and supply season by country

Christmas in Dec

There are no

imported cherries avail.

until Dec.

Opportunity

for Australia to supply

from Oct and Nov

Country Fumigation

USAYes/California 37 countiesNo/California 16 counties

Uzbekistan Yes

Turkey Yes

AustraliaYes/MainlandNo/Tasmania

Chile No

New Zealand No

Australian Cherries Last Year

• Target consumer price by retailer is below KRW 10,000-12,000 (A$ 12-14) per 1 pack (700g)

• Preferable size is 26mm

9

Emart

HypermarketA$ 14/500g

Homeplus

HypermarketA$ 14/300g

Coupang

Online EcommerceA$ 20/400g

To Remember

Top 3 takeaways Drivers of success

Market access of mainland cherries from last year with 0% KAFTA tariff.

Korean consumers seeking premium fruits and new variety.

Supplying window starts in October and competition with Chile starts in December.

Please check your air freight connection and price.

Air freighted marketing works for only premium fruits. Please send premium quality cherries with clean skin and crunchy texture.

Start communication with Korean importers early, starting in September.

Emma Hatcher

Agriculture Counsellor

Department of Agriculture, Water and the Environment

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Regulatory Overview

Covid-19 Impact Update

Challenges Considerations

• Interim arrangements –due to COVID-19 travel restrictions

• Container shortages and disrupted freight schedules

• Potential delay in arrival of phytosanitary certificates

• Korea has specific requirements for trade (protocol market)

• Avoiding non-compliance

• Quarantine and food safety requirements must be understood and met

• APQA is a diligent regulator – act early if you know there is a problem

• Some issues we can fix –others we can’t!

Market Access

Tasmanian cherries

• Recognised as a PFA for fruit flies

• Codling moth trap monitoring and inspection

Mainland (excluding WA)

• Finalised in January 2020 – 2021 first full season (but limited uptake)

• Methyl bromide fumigation

Interim arrangements for 2022 trade

• Ordinarily would require Korean inspectors for pre-clearance inspections (mainland) and on-site verification (Tasmania)

• Likely that DAWE will undertake remote verification/audit processes on behalf of APQA (as in 2021)

Korea – a protocol market for Australian cherries

14

To remember

Top 3 takeaways Drivers of success

Australia has good market access to Korea for cherries: interim arrangements for 2022

Australia is recognized for strong compliance (quarantine and food safety)

Act quickly to resolve any issues before fruit arrives

Adherence to Korea’s requirements is key to avoiding costly delays

Understand what Korea’s cherry import requirements are and comply

Partner with an experienced importer who fully understands Korea’s requirements

Korean Buyer Experience

Monica Lee, Business Development Manager

Australian Trade & Investment Commission

and

David Lee, Manager, PSK International

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Q&A

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What’s Next?

Reach out to your Tradestart or Global Engagement Manager

• 13 28 78New to Austrade? Get in touch to see how we can help and ask specific questions about grants, programs and services

• export.business.gov.auTry the Guide to Exporting tool to identify, understand and prioritise markets

• agriculture.gov.au

• austrade.gov.auRead more about the $72m Agribusiness Expansion Initiative

• austrade.gov.au/news/newsletters

Keep informed about the latest agribusiness news

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