RoK burgeoning market for Vietnam’s agro-forestry-fisheries exports

Workers process fish for export. (Illustrative photo: VNA)

Vietnam’s agro-forestry-fishery exports to the Republic of Korea (RoK) have surged thanks to the bilateral Free Trade Agreement (VKFTA), topping 2 billion USD annually during 2016 - 2023, and the Northeast Asian country is forecast to remain an attractive market in the coming time.

The RoK is currently the fourth largest market of Vietnamese agro-forestry-fisheries products.

Since the VKFTA took effect in late December 2015, aquatic exports to this market have grown considerably, by 35% to 787 million USD in 2023 from 585 million USD in 2015, according to the Vietnam Association of Seafood Exporters and Producers (VASEP).

Phung Thi Kim Thu, a shrimp market expert at VASEP, said the RoK is the largest importer of squid and octopus from Vietnam, accounting for 37% of total shipments. Meanwhile, Vietnam ranks second among suppliers of these products for this market, following China.

Vietnam’s squid and octopus exports to the RoK are forecast to rise in the first quarter of 2024, she said, noting that shrimp is also a key aquatic export to the market.

The RoK will remain a popular choice of many businesses given its close proximity to Vietnam and stable demand, especially as inflation in such major markets as the US and Europe slowed consumption. Sea freight costs to the US and Europe have soared, thus closer markets like the RoK prove more attractive for exporters, Thu went on.

The Foreign Trade Agency under the Ministry of Industry and Trade reported that in 2023, the RoK’s coffee import from Vietnam increased 17.9% in volume to 41,450 tonnes and 16.3% in value to 93.35 million USD compared to the previous year. The proportion of Vietnamese coffee in the RoK’s total imports rose to 21.52% in 2023 from 17.15% in 2022.

The Korean coffee market’s revenue is predicted to hit 2.2 billion USD this year, the agency said, considering this a chance for coffee producers around the world, including Vietnam, boost shipments to the RoK.

Meanwhile, the RoK was the third largest importer of Vietnamese rubber with 8,200 tonnes worth 12.77 million USD in the first two months of 2024, up 61.7% in volume and 60.3% in value year on year, statistics show.

Last year, this market also ranked third among importers of Vietnamese fruits and vegetables with 226 million USD in value, rising 25% from 2022.

The Institute of Policy and Strategy for Agriculture and Rural Development (IPSARD) cited a report released in mid-February by the Korea Rural Economic Institute as saying that the RoK’s frozen fruit import volume stood at 64,000 tonnes in 2023, up 6% from 2022. The import is expected to increase further this year as the RoK reduces or exempts tariffs on foreign fruits to stabilise domestic prices.

However, imports into the RoK are also facing increasingly strict requirements in terms of quality, food safety, sanitary and phytosanitary measures. This is also a big reason why Vietnam’s agro-forestry-fisheries products have accounted for just 4% of the RoK’s total imports of these commodities in 2023.

Facing that fact, the Korea International Cooperation Agency (KOICA) has pledged to assist Vietnam with agricultural development through many projects like improving value chains, enhancing connectivity, and bettering climate change response capacity to produce high-quality farm produce and meet demand from the RoK./.