According to the Department of Import and Export (Ministry of Industry and Trade), Vietnam is the third largest supplier of mango to South Korea. However, the amount of mangoes imported from Vietnam only accounts for 5.8% of the total mango imports.
The remaining market potential presents an opportunity for mango exporters to increase their exports to South Korea in the near future. Additionally, effectively leveraging the Free Trade Agreements (FTAs) that Vietnam has signed with South Korea is also yielding positive results.
Citing data from the Korea International Trade Association (KITA), the Department of Import and Export reports that South Korea’s import of mangoes (HS 08045020) for the first three months of 2023 reached 8,000 tons, valued at $36.4 million. This represents an 18% decrease in quantity and a 19% decrease in value compared to the same period in 2022. The average import price of mangoes in the first three months of 2023 was $4,533.8 per ton, down 1.2% from the same period in 2022.
Currently, Peru is the largest supplier of mangoes to South Korea for the first three months of 2023. Mangoes imported from Peru account for 63.4% of the total mango imports into South Korea, amounting to 5,100 tons, valued at $25.7 million. This represents a 14.8% decrease in quantity and an 18.1% decrease in value compared to the same period in 2022.
Thailand is the second largest supplier, with 2,300 tons valued at $7.8 million, representing a 22% decrease in quantity and a 20.4% decrease in value, accounting for 28.1% of the total. However, to boost mango exports to South Korea, exporters need to consider that South Korean consumers prioritize the safety of agricultural products and food, followed by quality, taste, appearance, and price.
In particular, South Korea is known for having some of the strictest regulations in Asia regarding conditions for imported agricultural products.
According to the Department of Import and Export, the export value of vegetables and fruits from Vietnam in March 2023 reached $418 million, an increase of 22% compared to March 2022. For the first three months of 2023, the export value of vegetables and fruits reached $982 million, up 16.2% compared to the same period in 2022.
The positive growth in vegetable and fruit exports during the first three months of 2023 is due to a significant increase in exports to China. The export value to China reached $576.4 million, up 27.4% compared to the same period in 2022. The increased demand from China is attributed to the cold season in February and March, which resulted in lower fruit production and insufficient domestic supply.
The reopening of China after several years of Zero-Covid policies is expected to drive promising growth for Vietnam’s vegetable and fruit exports to this market in 2023.
However, China is gradually tightening non-quota imports and shifting to formal channels, raising the quality requirements for imported vegetables and fruits. To export to this market, in addition to improving product quality, companies and farmers must adhere to and control the certification of cultivation areas and packaging facilities.
While exports to China have surged, exports of vegetables and fruits to the United States have decreased significantly due to inflation affecting purchasing power in this market. Notably, exports to other markets such as South Korea, Japan, and the Netherlands have shown positive growth in the first three months of 2023.
The Vietnam Trade Office in South Korea reports that in 2023, several factors will continue to impact Vietnam’s trade with South Korea. The South Korean economy is under significant pressure from high inflation and rising interest rates. Recent data shows that the consumer price index in South Korea increased by 5% in December 2022 compared to the same period in 2021.
To curb rising prices, the Bank of Korea (BoK) is expected to implement another interest rate hike early this year. High interest rates could lead South Korean households to reduce their spending budgets. Furthermore, South Korea’s Ministry of Finance has revised its growth forecast down to 1.6% for 2023, compared to an estimated 2.5% growth in 2022. On the other hand, the South Korean government prioritizes boosting exports as a key policy for economic recovery in 2023.
hese factors will affect Vietnam’s exports to South Korea, and adjusting trade promotion and export strategies to fit the market context is deemed necessary.
To enhance exports to South Korea, the Vietnam Trade Office in South Korea advises that food safety and sanitary and phytosanitary (SPS) measures in South Korea remain significant barriers affecting the export of Vietnamese agricultural, aquatic products, and processed foods.
In 2023 and beyond, it is important to further enhance the role of the SPS Subcommittee under the Vietnam-South Korea Free Trade Agreement Joint Committee in resolving these challenges.
Additionally, relevant ministries and sectors should support Vietnamese businesses in researching and developing products by requesting assistance from South Korea in market and product analysis for specific items, and by supporting marketing on social media platforms.
Furthermore, increasing cooperation and exchanges between domestic industry associations and their South Korean counterparts, as well as with major distributors such as Lotte Mart, E-Mart, Home Plus, and CJ Home Shopping, can help boost opportunities for selling products in South Korea’s supermarket chains and distribution networks.
Efforts should also focus on supporting Vietnamese companies in promoting and selling products on major South Korean e-commerce platforms such as Coupang and Gmarket to gradually penetrate the South Korean e-commerce market. Increasing trade promotion activities by participating in high-profile industry fairs in South Korea can effectively showcase Vietnamese products in the local market and support trade connections through various online and offline methods.
Moreover, directly arranging trade and investment opportunities for South Korean business delegations with Vietnamese businesses and industry associations in the industrial and trade sectors is essential.
Finally, Vietnam needs to strengthen mechanisms to attract South Korean companies to collaborate and invest in producing agricultural products for export to South Korea.
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