Food and Agriculture Organization of the United NationsFishery Industries Division

Viale delle Terme di Caracalla00100 Rome, Italy

Tel.: +39 06 5705 5074Fax: +39 06 5705 5188

www.globefish.org

Republic of Korea Fishery Industry ProfilePost Harvest Sector

Volume 88

GLOBEFISH RESEARCH PROGRAMME

Vo

lume 88

Republic o

f Ko

rea - Fishery Industry P

rofile, P

ost H

arvest Secto

r

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

ii

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© FAO

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

iii

TABLE OF CONTENTS

1. INTRODUCTION........................................................................................................... 3

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

1.2 Population ............................................................................................................... 3

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

2. 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

3. 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

4. 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

iv

5. 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

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

6.1 Tariff ...................................................................................................................... 34

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

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

6.2 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

7. 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

v

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

8. 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

vi

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

vii

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

viii

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

ix

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

1

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 world’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 23-

63% 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

2

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.

3

1. 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.

4

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

0

5000

10000

15000

20000

25000

30000

35000

40000

1995 2000 2005

Age

Population(thousa

nd)

Y(0-14 yrs) M(15-64yrs) O(> 65 yrs)

5

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.

6

2. 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 government’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 04/ 03

Fishing household 77 717 73 124 72 760 72 513 99.7

population 234 434 215 174 212 104 209 855 98.9

Female

(%)

117 409

(50.1)

107 486

(50.0)

105 720

(50.0)

104 493

(49.8)

98.8

-

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

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.

7

Table 4: Fishing Population by Sex and Age

(Unit: person, %)

2001 2002 2003 2004 04/ 03

Total 136 869 127 694 125 023 122 384 97.9

Man

70 851

(51.8)

69 666

(54.6)

67 870

(54.3)

66 380

(54.2)

97.8

-

Sex

(%) Woman

66 018

(48.2)

58 027

(45.4)

57 153

(45.7)

56 004

(45.8)

98.0

-

< 30

4 149

(3.0)

3 817

(3.0)

3 854

(3.1)

3 313

(2.7)

86.0

-

30~39 14 914

(10.9)

13 067

(10.2)

11 600

(9.3)

10 490

(8.6)

90.4

-

40~49 35 280

(25.8)

35 401

(27.7)

33 974

(27.2)

32 097

(26.2)

94.5

-

50~59 40 190

(29.4)

37 994

(29.8)

36 916

(29.5)

37 171

(30.4)

100.7

-

Age

(%)

> 60 42 336

(30.9)

37 414

(29.3)

38 680

(30.9)

39 312

(32.1)

101.6

-

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

Chart 2: Age Structure Change of Fishing Population

0

20000

40000

60000

80000

100000

120000

140000

160000

2001 2002 2003 2004

Year

Fis

hin

g P

op

ula

tio

n

Total Man Woman A(< 30 yrs) B(30-60 yrs) E(> 60 yrs)

2.2 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 distant-

8

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 04/ 03

No. of vessels

•Motorized

•Non-motorized

93 257

88 521

4 736

91 608

87 203

4 405

98.2

98.5

93.0

Total

Tonnage

•Motorized

•Non-motorized

754 439

750 763

3 676

724 980

721 398

3 582

96.1

96.1

97.4

Coastal fisheries No. of vessels

Tonnage

66 698

345 066

66 063

330 203

99.0

95.7

Mariculture No. of vessels

Tonnage

19 228

28 034

18 792

27 296

97.7

97.4

Inland No. of vessels

Tonnage

4 510

3 941

3 991

3 102

88.5

78.7

Distant water No. of vessels

Tonnage

517

273 086

491

261 237

95.0

95.7

Others No. of vessels

Tonnage

2 304

104 312

2 271

103 142

98.6

98.9

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

2.3 PRODUCTION

2.3.1 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.

9

Table 6: Catch and Value by Fisheries

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

2003 2004 04/ 03 (%)

Fisheries Quantity Value Quantity 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

Aquaculture 826 1 165.7 918 2 117.1 111.1 104.4

Inland 20 126.7 25 167.2 128.6 132.0

Distant-water 545 1 072.6 499 7 373 91.7 68.7

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

Table 7: Production by Main Species

(Unit: thousand MT)

Year Alaska pollack

Hair tail

Croackers Mackerels Anchovies Flounders Squids Oysters Sea Mustard

Laver

1970 13.4 69.1 55.2 38.3 54.0 21.6 72.1 42.4 45.0 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.

10

2.3.2 Aquaculture Production: Flat fish••••Black Rockfish••••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 salt-

water 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

(56.1)

23 343

(48.6)

34 533

(47.7)

32 141

(49.8)

Black rockfish

(%)

9 330

(31.8)

16 634

(34.6)

23 771

(32.8)

19 576

(30.4)

Other

(%)

3 541

(12.1)

8 096

(16.8)

14 089

(19.5)

12 759

(19.8)

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.

11

Table 9: Fresh Water Farmed Fish Production (2005)

Rank Species Production(M/T) % of the Total

1 Eel 5 810 26.7

2 Rainbow trout 3 320 15.3

3 Catfish 2 575 11.7

4 Loach 1 953 9.0

5 Carp 1 640 7.5

6 Crucian carp 1 321 6.1

7 Mullet 1 002 4.6

8 Israel carp 975 4.5

9 Pond smelt 424 1.9

10 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.

12

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

0

0.5

1

1.5

2

2.5

3

3.5

4

70 80 90 94 95 96 97 98 99 0 1 2 3 4

Year

CPU

E(M

T/G

T)

CPUE(MT/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

13

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.

14

3. PROCESSING INDUSTRY

3.1 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.

15

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 04/03(%)

Total 1 546 839 1 438 677 1 357 717 1 528 795 12.6

Higher degree of processing (%)

228 272 (14.8)

209 641 (14.6)

207 501 (15.3)

287 960 (18.8)

38.8

Canned 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 36 013 19 843 13 924 8 797 -36.8

Minimally processed (%)

1 318 567 (85.2)

1 229 036 (85.4)

1 150 216 (84.7)

1 240 835 (81.2)

7.9

Frozen 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

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

0

200000

400000

600000

800000

1000000

1200000

1400000

1600000

1800000

2001 2002 2003 2004

Year

Pro

ductio

n(M

/T)

Total Canned Frozen

16

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 04/03(%)

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

Sardine 402 498 1 565 0 -

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 54 72 33.3

Short neck clam 135 42 0 397 -

Other 4 230 4 108 3 122 110 -96.5

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 19.6 19.5 18.5 5.13

Sahjo 7 6.2 5.0 5.1 -2

Hanseong 0.4 0.2 0.1 0.1 0

Ohyang 0.1 0.2 0.2 0.2 0

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

17

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)

2005 2004 05/04 (%) Product Groups

MT US$1000 MT US$1000 MT 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

Smoked 114 773 205 4 847 -44.39 -40.05

Dried 9 444 64 162 10 966 80 161 -13.88 -19.96

Salted or in brine 13 135 22 616 14 123 23 934 -6.99 -5.51

In air tight container 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

Source: Ministry of Marine Affairs and Fisheries, ROK

Table 15: Import of Processed Seafood

(Unit: M/T, US$ thousand)

2005 2004 05/04 (%) Product Groups

MT US$1000 MT US$1000 MT US$1000

Total 1 097 007 1 876 343 1 097 265 1 741 876 -0.02 7.72

Frozen 897 493 1 406 323 904 471 1 337 986 -0.77 5.11

Smoked 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

In airtight containers 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

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.

18

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 SOME IMPORTANT POLICIES

3.3.1 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.

19

Table 16: Support for Seafood Processing Sector

(Unit: million won)

2003 2004

No. Budget No. Budget

04/03(%)

Total 65 19 662 85 22 455 14

Fund for Facility Freezing and chilling Modernizing plant Landing-port plant Sashimi facility Other

33 5 - 4 4

20

11 402 4 650

- 1 552 4 000 1 200

43 5 2

10 3

23

12 700 5 000 1 080 3 740 1 500 1 380

11 8 -

141 -62 15

Operation Fund Freezing and cooling Canning Flavor-seasoned Paste Other

32 22

7 - 1 2

8 260 6 635 1 090

- 90

445

42 18

4 1 1

18

9 755 5 150

700 100 100

3 705

18 -22 -36

- 11

733

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

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

Item

Pickled (27) 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), salt-fermented fish (flounder, Alaska pollack)

Porridge (6) 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)

Other (5) Flavor-seasoned laver, dried croaker with red pepper paste, corbicula soup, spiced eels, fried seaweeds

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

20

Table 18: General Seafood Certification

Item

Dried (10) Dried squid, semi dried squid, dried red horsehead, dried anchovy, dried 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

Seaweeds (8) Dried laver, dried rock laver, dried strand sea mustard, dried cut sea 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 (4) Flavor-seasoned dried slices of file fish, flavor-seasoned improved clam, 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 value-

added processed seafood. From the seafood processing firm’s perspective, regular consumer surveys

will be of importance since they can help to improve the understanding of changes in the consumers’

preferences and purchasing patterns.

21

4. CONSUMPTION

4.1 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 1980 1990 2001 2002 2003 2004 04/03(%)

Fish & Shellfish 22.5 30.5 35.6 36.6 38.5 40.8 6.0

Rice 132.9 120.8 92.8 91.1 87.8 88.6 0.3

Wheat flour 29.4 29.7 34.4 34.6 32.4 33.5 3.4

Soybean 8.0 8.3 8.2 8.4 8.0 8.5 6.3

Vegetables 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 8.9 0

Milk 10.8 31.8 51.4 52.8 50.8 53.8 5.9

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

22

Chart 5: Main Food Consumption Pattern

0

20

40

60

80

100

120

140

1980 1990 2001 2002 2003 2004

Year

Consu

mption(K

g/Y

r/P

erso

n)

Seafood Rice Meat Milk

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 consumers’ 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.

23

Table 21: Consumption Pattern of Major Species

(Unit: g)

1980 1985 1990 1995 1999 2000 2001 2002 2003 2004

Total 73.7 102.0 99.1 123.4 105.1 100.6 115.5 122.4 123.2 113.2

Alaska pollack 6 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 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

Shrimp 1 1.6 2.33 2.7 4.58 4.80 4.30 4.87 7.38 7.33

Crab 0.4 0.7 0.69 2.38 1.97 1.26 1.04 1.44 1.79 2.89

Squid 3 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 7 5.88 10.65 9.01 6.96 8.89 8.08 6.80 8.70

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.

24

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 Salted/dried Seaweeds

Large discounter 328(36.9) 378(42.6) 376(42.5)

Super market inside village 95(10.7) 53(6.0) 168(19.0)

Conventional market 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)

Internet 1(0.1) 3(0.3) 7(0.8)

Other 18(2.0) 27(3.0) 25(2.8)

No response (1) (1) (5)

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.

25

Table 24: Reason for Visiting the Retail Stores

(Unit: person, %)

Fresh fish and shellfish Salted/dried Seaweeds

Cheap price 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)

Handling and caring 36(4.1) - -

Convenience 254(28.6) 332(36.4) 268(30.4)

Other 11(1.2) 18(2.0) 17(1.9)

No response (1) (4) (6)

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 non-

discrimination 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 63 7.1

Nutritional value 17 1.9

Sanitary reason 20 2.3

Other 1 0.1

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.

26

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. TRADE OF SEAFOOD

5.1 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 country’s economy faced the worst situation in modern

history, which invited the IMF’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, %)

Fisheries export Fisheries import Year National

export(A)

National

import(B) Value(C) C/A Value(D) D/B

BOP

(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

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

27

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

0

500000

1000000

1500000

2000000

2500000

1980 1990 1995 1997 1998 1999 2000 2001 2002 2003 2004

Year

US

$th

ou

san

d

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 2005 05/04 (%)

MT US$ 1000 MT US$ 1000 MT 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.

28

Table 28: Import of Fishery Products

2005 2004 05/04 (%) Product Groups

MT US$ 1000 MT US$ 1000 MT US$ 1000

Live 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

Smoked 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

In airtight containers 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 1 256 142 2 383 574 1 280 915 2 261 356 -1.93 5.40

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

2005 2004 05/04 (%) Product Groups

MT US$ 1000 MT US$ 1000 MT US$ 1000

Live 8 514 89 695 7 334 91 572 15.93 -2.05

Fresh or chilled 24 237 136 795 38 076 144 090 -10.49 -5.06

Frozen 278 865 595 113 270 793 654 680 2.98 -9.10

Smoked 114 773 205 4 847 -44.39 -40.05

Dried 9 444 64 162 10 966 80 161 -13.88 -19.96

Salted or in brine 13 135 22 616 14 123 23 934 -6.99 -5.51

In air tight container 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

Total 411 878 1 193 117 406 435 1 278 638 1.34 -6.69

Source: Ministry of Marine Affairs and Fisheries, ROK.

29

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

2005 2004 05/04 (%) Origin

MT US$ 1000 MT US$ 1000 MT 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

Norway 8 459 29 146 14 666 35 226 -42.32 -17.26

Indonesia 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

UK 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

Others 168 982 309 367 186 335 278 659 -9.31 11.02

Total 1 256 142 2 383 574 1 280 915 2 261 356 -1.93 5.40

Source: Ministry of Marine Affairs and Fisheries, ROK.

30

Table 31: Korean Export to Major Countries

2005 2004 05/04 ( %) Destination

MT US$ 1000 MT US$ 1000 MT 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

Others 30 180 40 070 28 272 40 343 6.75 -0.68

Total 411 878 1 193 117 406 435 1 278 638 1.34 -6.69

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.

1 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.

31

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 2002 2003 2004

Quantity Value Quantity Value Quantity 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 - - - - 30 31 8 7

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 nations’ EEZs.

Table 33: Seafood Self-Sufficiency

1000 M/T 2001 2002 2003 2004

Total production 2 665 2 476 2 486 2 519

Total consumption 3 221 3 433 3 578 3 922

Self-sufficiency (%) 83 72 69 64

Source: Korea Ministry of Marine Affairs and Fisheries, 2004 Major Statistic of Marine Affairs and Fisheries, 2005.

32

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

33

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 Korea’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 Korea’s

dependency on importing seafood. Distribution/marketing sectors will also face keen competition with

large-scale foreign discounters such as Wal Mart.

34

6. RULES AND REGULATIONS OF SEAFOOD TRADE

6.1 TARIFF

6.1.1 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

Non-concession 943 232 16 959

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 (%)

Average elastic rate (%)

Average concession Rate (%)

Average active rate (%)

Total 407 17.56 38.10 17.75 18.02

Concession 175 (43%) 17.53 17.75 17.07

Non-concession 232 (57%) 17.57 38.10 18.74

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

35

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 SEAFOOD SAFETY SANITARY INSPECTION

6.2.1 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,

36

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.

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

Institute, 2003.

37

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)

Total Import Inspection (Ratio %) Disqualified (Ratio %) Year

Quantity Value Case Quantity Value Case Quantity Value

932 085 1 939 045 292 1 559 5 685 2005 1 256 142 2 383 574 96 112

(74.2) (81.4) (0.3) (0.2) (0.3)

930 307 1 648 907 33 3 006 7 375 2003 1 238,603 1 961 145 80 031

(75.1) (84.1) (0.0) (0.3) (0.4)

514 755 1 186 256 347 2 425 6 048 2000 749 191 1 410 598 49 155

(68.7) (84.1) (0.7) (0.5) (0.5)

249 033 436 608 92 584 1 299 1998 375 224 587 481 17 507

(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 Korea’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.

38

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 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 94 642 2 053 0.3 0.2 0.3

Russia 6 396 211 459 263 399 15 51 151 0.2 0.0 0.1

Taiwan 1 324 61 824 63 070 34 237 1 479 2.6 0.4 2.3

Japan 17 422 58 518 144 042 37 109 413 0.2 0.2 0.3

N. Korea 5 311 49 151 61 137 12 48 64 0.2 0.1 0.1

Vietnam 5 294 39 412 108 348 11 37 123 0.2 0.1 0.1

Thailand 9 035 21 892 98 102 20 31 163 0.2 0.1 0.2

Other 16 201 158 975 442 815 69 404 1 239 0.4 0.3 0.3

Chart 7: Imported & Disqualified Seafood

0

0.5

1

1.5

2

2.5

3

China Russia Taiwan Japan N. Korea Vietnam Thailand

Country

Dis

qual

ifie

d C

ase/

Volu

me/

Val

ue

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.

39

7. 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

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.

Landing-port distribution Consumption-area distribution

Pro

du

cers

Landing- Port

wholesale market

MW

PF Commission

merchant

CLT

Direct sales market

Non-institutional

wholesale market

NIWM

CWM

Co

nsu

mers

Retailers

MW

WM

OW

ML

P

Direct sales/E-commerce

40

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 DISTRIBUTION CHANNELS OF SOME IMPORTANT FISH SPECIES

7.2.1 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.

41

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

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).

(1) (2) (3) (4) (5) (6) (7)

(8)

(10) (11)

(9)

42

Figure 3: Frozen Domestic Squid Distribution Channels

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)

(1) (2)

(4)

(3)

(5)

(7) (8)

(6)

43

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

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.

Main channel Non-main channel

(1)

(2) (3)

(4) (5) (6)

(7)

(8)

(11) (12)

(9) (10)

44

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 JR DS LSD Other Total

Garakdong 45.0 15.7 15.0 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 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

45

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. Landing-

port 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 2001 2002 2003 2004 04/03(%)

Total 15 992 929 976 745 977 892 1 006 575 2.9

Garakdong 408 653 390 939 347 838 383 668 0.3

Daegu 21 897 21 318 21 781 25 602 17.5

Daejeon 13 728 12 125 15 026 15 271 1.6

Ulsan 19 269 20 595 20 797 19 868 -4.5

Central

wholesale

market

Nohryangjin 305 364 315 459 308 594 330 668 7.1

Guri 129 268 125 378 118 883 126 250 6.1

Suwon 13 305 10 387 7 124 11 644 63.4

Cheongju 8 785 8 442 5 445 4 652 -24.6

Jeonju 14 078 11 541 11 541 10 157 -12.0

Anyang 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

Provincial

wholesale

market

Geongju 4 061 3 258 2 284 1 756 -23.2

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.

46

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 MAIN GOVERNMENT POLICIES

7.6.1 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 fishermen’s income would rise.

47

Table 41: The Government Purchase

(Unit: M/T, million won)

Item Quantity(Q)

Value(V)

2001 2002 2003 2004 04/03(%)

Total Q

V

20 488

30 804

12 000

30 991

18 782

44 505

20 541

38 590

9.4

-13.3

Dried laver Q

V

806

12 038

680

9 664

538

6 653

401

4 769

-25.5

-28.3

Salted sea

mustard

Q

V

2 627

2 629

1 960

2 158

2 000

2 041

-

-

-

-

Dried sea

mustard

Q

V

40

419

-

-

-

-

-

-

-

-

Dried squid Q

V

6

67

-

-

-

-

-

-

-

-

Dried anchovy Q

V

-

-

-

-

-

-

-

-

-

-

Frozen squid Q

V

11 194

13 133

3 025

5 292

2 786

6 818

2 065

4 847

-25.9

-28.9

Frozen

mackerel

Q

V

1 954

3 809

1 791

3 514

1 183

4 042

3 781

6 067

219.6

50.1

Frozen Alaska

pollack

Q

V

3 685

4 966

4 046

5 962

11 940

21 932

14 054

20 380

17.7

-7.1

Frozen croaker Q

V

1

13

57

569

85

808

-

-

-

-

Frozen hair tail Q

V

175

1 730

304

3 339

250

2 211

240

2 527

-4.0

14.3

Frozen saury Q

V

-

-

-

-

-

-

-

-

-

-

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

The Korean government purchases and releases 11 dried/frozen/salted fish and seaweeds to stabilize the

prices as well as the fishermen’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 fisherman’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

48

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

fishermen’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

facility Total National Lending Provincial Self

Total 14 28 869 15 530 1 307 10 794 1 238

A

B

C

D

E

4

1

2

3

4

26 562

8 571

1 200

9 000

7 446

947

6 000

360

4 500

3 723

947

-

360

-

-

-

2 571

-

4 500

3 723

758

-

480

-

-

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

49

standards, the government lent fishermen, fisherman’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.

50

8. IMPORTANT INSTITUTIONS

8.1 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.

51

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

Korea’s seafood producers and processing organizations, government-recognized seafood production-

and 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.

52

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 2002 2003 2004 04/03(%)

Total No. of projects

Budget

91

5 631

91

6,136

77

5 348

83

6 100

7.8

14.1

Technology

Development

No. of projects

Budget

76

4 888

77

5,351

63

4 634

69

5 350

9.5

15.5

Policy

Research

No. of projects

Budget

15

743

14

785

14

714

14

750

100

5.0

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.

53

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, KAFC’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.

54

ANNEX A: FISHING VESSEL BUYBACK PROGRAM

Table 1: Fishing Vessel Buyback Program and Crew Support

(Unit: million won)

International Regulation General Coastal

Buyback Unemployed crew support

Buyback Unemployed crew support

Vessel Budget Vessel Budget Vessel Budget Vessel Budget

Total 1 328 573 634 9 200 69 906 1 952 216 909 - -

1994 -

1996

- - - - 307 28 977 - -

1997 - - - - 135 27 200 - -

1998 - - - - 159 27 513 - -

1999 652 331 496 2 415 10 654 78 15 180 - -

2000 31 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 - -

2004 - - - - 725 24 434 - -

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

55

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

Dressed : cods, salmon, hair tail, mud fish

Fillet : Alaska Pollack, banded shrimp, monk fish, cuttle fish

Processed frozen

Other : chunk, slice, dice, loin

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

Table 3: Dried Seafood

Item

Plain dried Squid, shrimp, shark’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.

56

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.

57

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.

58

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 109 109

Mackerel 73 73

Croaker 64 64

Saury 59 59

Squid 25 25

Other 161 161

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.

59

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

Handled and Packed at the market 49 5.5

Semi-ready-made 2 0.2

Cooked 3 0.3

Other 5 0.6

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

Moderately expensive

Average A little cheap

Very cheap

No response

Total

Fresh 169(19.4) 475(54.4) 218(25.0) 9(1.0) 2(0.2) (16) 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 unsatisfied

A little unsatisfied

Average A little satisfied

Very satisfied

(No response)

Total

Fresh 15(1.7) 208(24.0) 478(55.2) 146(16.9) 19(2.2) (23) 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.

60

Table 16: Frequency of Packed Seafood Purchase

(Unit: person, %)

Response(person) Ratio (%)

One time a week 75 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 80 9.9

Convenient for mass purchase 45 5.5

No packed fish meat part desired 16 2.0

Direct confirmation of freshness 655 80.7

Other 16 2.0

(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 56 6.4

No discrimination between chilled and frozen 167 18.9

(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.

61

Table 19: Reason for Fresh/Chilled Seafood

(Unit: person, %)

Response(person) Ratio (%)

Better taste 248 30.0

Freshness 502 60.8

Fast cooling 66 8.0

Other 10 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) Ratio (%)

Better taste 50 10.3

Convenient for Cooking 376 77.5

Low-priced 22 4.5

Other 37 7.6

(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.

62

Table 22: Seafood Cuisine Preferred

(Unit: person, %)

Response(person) Ratio (%)

Roasted 498 43.0

Hard-boiled 230 19.9

Fried 92 7.9

Sashimi 112 9.6

Pot stew 154 13.3

Other 75 6.3

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 57 6.4

Confirmation but little concern 367 41.5

Purchasing only domestic with confirmation 442 49.9

Other 19 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) Ratio (%)

Wild 589 66.7

Cultured 23 2.6

No discrimination 216 24.5

Just do not know 56 6.2

(No response) (6)

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.

63

Table 25: Reason for Preferring Wild to Farmed Fish

(Unit: person, %)

Response(person) Ratio (%)

Better taste 458 66.7

Better nutrient 85 12.4

No harmful element 141 20.5

Other 4 0.6

(No response) (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) Ratio (%)

Fish with blue back 165 58.9

Croaker 13 5.7

Hair tail 21 7.5

Other 78 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.

64

ANNEX D: TRADE

Table 27: Tariff Structure (2006)

Tariff rate (%) No. of Items Item

63 1 Frozen brown croaker

50 1 Pickled shrimps

45 14 Live sea bream, frozen seaweeds(13)

40 1 Live common sea bass

36 2 live brown croaker, frozen saury

30 9 Live eel, frozen Alaska pollack(3), marine live resources(3), fish

juice, fish soup

27 1 Frozen skate

24 1 frozen squid

20 249

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

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

containers(63)

14 2 Frozen blue crab, frozen crab(other)

10 92 Live Fishes(24), frozen fishes(51), fillets(11), mollusca(5), Frozen

laver(1)

8 24 Clam worm(2), Mud Turtle, coral, shell(15), agar(3), whale oil(2),

flavor seasoned laver(2)

5 4 Seed oyster, fish waste, fish meal, crude fish meal (2)

4 5 Brine shrimp

3 2 Fish liver oil, fish oil/powder(5)

Total 407

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

65

Table 28: Adjustment Tariff Rates (2006)

Adjustment tariff (%) Item Basic Tariff

(%) 2001 2002 2003 2004 2005 2006

Live eel 10 30 30 30 30 30 30

Live sea bream 10 65 60 55 50 45 45

Live common sea bass 10 65 60 55 50 45 40

Live croakers 10 - 40 40 40 36 36

Frozen Alaska Pollack 10 30 30 30 30 30 30

Frozen saury 10 40 40 40 40 40 36

Frozen skate ray 10 50 40 35 30 30 27

Frozen brown croaker 10 70 70 70 70 70 63

Frozen shrimp 20 35 35 30 30 27 -

Pickled shrimp 20 60 55 55

Frozen squid 10 40 40 35 30 27 24

Frozen rouple squid 20 35 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 Demersal fish Other

1960 153 153 - - - -

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.

66

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.

67

Table 31: Seafood Import from China by Main Species

(Unit: US$ thousand)

Year Total Croakers (frozen)

Hair Tail

(frozen)

Monk fish

(frozen)

small octopus (frozen)

blue crab

(frozen)

puffer (frozen)

Common Seabass (frozen)

other

1991 29 003 1 664 6 - - - 1, 243 - 26 090

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 85 000

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

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 2007 2008 2009 2010 2011 2012 AGR

Flat fish 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

Oysters 246 369 248 439 250 525 252 630 254 752 256 892 259 050 0.8

Sea mustard 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

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.

68

Table 33: Import Forecast of Major Fish Species

(Unit: M/T, %)

2006 2007 2008 2009 2010 2011 2012 AGR

Croakers 69 339 71 114 72 934 74 802 76 716 78 680 80 695 2.6

Alaska Pollack 263 272 274 856 286 950 299 575 312 757 326 518 340 885 4.4

Hair Tail 45 172 48 063 51 139 54 412 57 894 61 599 65 542 6.4

Spanish mackerels 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

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

Alaska Pollack

Croakers

Hair Tail

Mackerels

Spanish mackerels

Saury

Skate rays

Anchovy

Shrimps

Crabs

Squid

Bastard

Black rockfish

Oysters

Short neck

Laver

Sea mustard

73

35

26

63

88

99

83

64

83

26

42

108

80

118

82

114

113

133

62

32

23

57

84

97

77

60

78

25

37

104

78

124

80

105

117

130

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

69

ANNEX E: SEAFOOD DISTRIBUTION

Table 35: Standard Shipment Items and Distribution Standards

Item Unit Quantity Packing materials

Dried anchovy bag, box 500g, 1kg, 2kg Vinyl, cardboard

Dried Alaska Pollack bag, box 5 fish, 10 fish Vinyl, cardboard

Dried squid bag, box 5 fish, 10 fish Vinyl, cardboard

Dried croaker box 5 fish, 10 fish Cardboard

Laver bag 10 sheets Vinyl

Dried sea mustard bag 5 sheets Vinyl

Dried threaded sea mustard bag 20g, 50g, 100g, 250g Vinyl

Dried cutting sea mustard bag 20g, 50g Vinyl

Dried slices of file fish bag 200g, 500g, 1kg Vinyl

Dried shrimps box 500g, 1kg, 2kg, 3kg Cardboard

Dried octopus set 5 fish, 10 fish Vinyl, cardboard

Dried slices of whiting sheet 5 sheets, 10 sheets Vinyl, cardboard

Dried sand lance box 500g, 1kg, 2kg, 3kg Cardboard

Salted sea mustard bag, box 200g, 500g, 1kg, 3kg,

5kg, 10kg

P.E film, cardboard

Pickled shrimps tong, bottle 1kg, 3kg, 5kg, 10kg P.E or glass container

Pickled anchovy " 1kg, 3kg, 5kg, 10kg P.E or glass container

Pickled oyster " 200g, 500g, 1kg Glass container, synthetic

resins

Oysters tong, bag 200g, 500g, 1kg, 3kg,

10kg

Vinyl, P.E container, P.S box

Short neck sack 500g, 1kg, 3kg, 5kg,

10kg

P.E net

Ark shell tong 500g, 1kg, 3kg, 5kg,

10kg

Zinc, styrofoam

Cockle sack 500g, 1kg, 3kg, 5kg,

10kg

P.P sock

Sea squirts tong 500g, 1kg, 3kg, 5kg,

10kg

Styrofoam

Sea mussel sack 500g, 1kg, 3kg, 5kg,

10kg

cotton fabrics, synthetic

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.

70

Table 36: Fisheries Production and Sale through Fisheries Cooperatives

(Unit: M/T, million won, %)

Quantity Value Year

Total production

Consignment sales

Rate Production value

Consignment sales

Rate

1992 2 230 874 1 503 430 67.4 2 465 682 1 642 018 66.6

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

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.

71

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 Fax : +82 (02) 589-1700

Homepage: 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 Fax: +82 (02) 589-1630

Homepage: 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

72

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

73

List of Seafood Importers and Agents

Company Name in charge

Main items Phone (Fax)

E-mail

Kunhwa Susan So-Ill Oh surimi 02-3474-5770

(02-3474-6174)

-

Deok Hwa Ryu

Tong Ltd.

Sug-Joon

Chang

pollack roe 051-208-4557~9

(051-208-4558)

-

Geo-Young Jung-Moon

Kang

bottom fish 051-247-9981/2

(051-254-9567)

-

Bong Shin

Susan

Oh-Hyun

Jung

bottom fish 02-441-4141/3

(02-441-4144)

-

Sang jin

Trading

Sang-Yun

Lim

salmon 02-572-9959

(02-582-9834)

sj0603@chollian.net

Korean Foods Noh-Sup

Park

bottom fish 051-257-0966

(051-462-9027)

ksc@koreanseafoods.co

m

Sea-World

Co., Ltd.

Hae-Ryong

Shin

ribbonfish

octopus

051-257-9435

(051-257-9304)

khshin@yahoo.co.kr

Seung Ji Trading

Co., Ltd.

Yong-Hyo Ha pollack roe 02-409-4307/8

(02-401-7714)

-

Wonil Trading

Corp.

Doo-Young

Jung

salmon/mussel 02-589-1731/8

(02-589-1730)

wonilseafood@korea.co

m

Global

Seafoods

Co., Ltd.

Young-Chul

Kim

mackerel/redfish

greenland turbot

salmon/welkmeat

sardin/loligo squid

skate wing/fish

roe + milt

02-586-5161/4

(02-586-5165)

globalkim@korea.com

globalfish@korea.com

Luckysusan

Co., Ltd.

Jean Roh mackerel/redfish 02-736-4328/9

(02-739-5689)

luckysusan@korea.com

74

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

Vol.65 Effect of World Trade Organization’s Regulation on World Fish Trade (87p.) Mar 2000 30

Vol.66 European Union Standards for Fishery Products (including EU duties) (248p.) June 2000 30

Vol.67 The Ornamental Fish Market (91p.) Oct 2000 30

Vol.68 The World Market for Frog Legs (44p.) June 2001 30

Vol.69 Fishery Industry Profile – Thailand (76p.) Nov 2001 30

Vol.70 The Fishery Industry in Greece (59p.) Nov 2001 30

Vol.71 The German Market for Fish and Seafood (116p.) Jan 2002 30

Vol.72 Fish Roe in Europe: Supply and Demand Conditions (47p.) Nov 2002 30

Vol.73 Salmon – A Study of Global Supply and Demand (151p.) July 2003 30

Vol.74 World Tuna markets (135p.) May 2004 30

Vol.75 Fishery Industry Profile – Viet Nam (57p.) July 2004 30

Vol.76 Fishery Industry in China (74p.) Sept 2004 30

Vol.77 Overview of Organic Markets: an Opportunity for Aquaculture Products? (98p.) Jan 2005 30

Vol.78 Seafood Price Indices (44p.) Apr 2005 30

Vol.79 World Market of Tilapia (28p.) Apr 2005 20

Vol.80 Fishery Industry Profile – Russia (70p.) June 2005 30

Vol.81

Trends in European Groundfish Markets (153p.) Nov 2005

50

Vol.82 Freshwater Species on the European Market (119p.) Dec 2005 30

Vol.83 Fish Supply and Demand in the Near East Region (67p.) Jan 2006 30

Vol.84 The Market for Nile Perch (94p.) Apr 2006 30

Vol.85 Supermarkets and the Artisanal Fisheries Sector in Latin America (79p.) Apr 2006 30

Vol.86 Markets and Marketing of Aquaculture Finfish in Europe (50p.)

Focus on the Mediterranean Basin Aug 2006 30

Vol.87 Lobster Ma rkets (92p .)

Focus on the Mediterranean Basin Oct 2006 30

Vol.88 Republic of Korea – Fishery Industry Profile (Post Harvest Sector) (72p.) Nov 2006 30

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Trends in European Groundfish Markets

Volume 81

GLOBEFISH RESEARCH PROGRAMME

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