Last Year Food Imports Increased by 20%... "Impact of Daily Recovery and High Inflation"

[Asia Economy Reporter Byeon Seon-jin] Last year, food import volume increased by 19.6% as daily life recovery and high inflation coincided. This was due to the recovery of the dining-out industry following the lifting of social distancing measures, and the government’s temporary reduction of tariffs on imported agricultural products to stabilize prices, which increased the quantity of imported food.

According to the "2022 Imported Food Statistics" announced by the Ministry of Food and Drug Safety on the 26th, there were a total of 802,201 import declarations for domestic food last year. Food from 166 countries including the United States, China, and Australia, comprising 2,330 items, 19.5 million tons, and worth 38.955 billion dollars, was imported. Although the number of import declarations decreased by 1.5% compared to the previous year, the import volume and value increased by 3.0% and 19.6%, respectively. This was due to an increase in import volume across all product groups, with particularly large increases in health functional foods (up 20.0%) and livestock products (up 14.5%).

By product group, agricultural and forestry products accounted for the largest share at 46.1%. This was followed by processed foods (33.3%), livestock products (9.5%), seafood (6.2%), and equipment or containers/packaging (2.4%). Livestock products increased by 14.5% compared to the previous year, more than five times the average annual growth rate of 2.6% over the past five years. This was influenced by the application of tariff quotas on pork and chicken in June and July last year amid high inflation, which increased pork and chicken imports by 25.9% and 54.0%, respectively.

Increase in Chinese Kimchi Imports... Imported Beer Continues to Decline

Kimchi imports, which had been declining since COVID-19, increased again last year due to high inflation and the lifting of restaurant operating restrictions. 100% of kimchi imported into Korea is from China. Kimchi import volume decreased for two consecutive years from 306,619 tons in 2019 to 281,021 tons in 2020 and 243,124 tons in 2021, but turned to an increase last year, reaching 263,498 tons.

Kimchi [Image source=Pixabay]

On the other hand, beer imports have been declining for three consecutive years. Last year, beer imports totaled 231,148 tons, down 11.1% from 260,102 tons the previous year. This is because the craft beer market is expanding, and demand for fruit wines and whiskey is replacing imported beer. According to the Korea Consumer Agency, the domestic craft beer market size was 118 billion won in 2020, a 47.5% increase from 80 billion won the previous year. Although fruit wine and whiskey imports decreased by 7.3% to 113,742 tons last year compared to the previous year, they increased by 62.0% compared to 2019 before COVID-19.

Beer

Since COVID-19, as health management has gained attention, imports of health functional foods have steadily increased. Last year, 27,045 tons of health functional foods were imported, a 20.0% increase from the previous year, exceeding the average annual import growth rate of 18.9% over the past five years. Imports of complex nutrients such as vitamins and minerals for nutritional supplementation increased significantly by 51.6%. Imports of xylitol, which helps dental health, increased by 167.5%.

The main countries exporting food to Korea are the United States and China, whose combined import volume accounts for 33.8% of the total. Last year, 3,426,671 tons and 3,171,318 tons of food were imported from the United States and China, respectively. In the United States, wheat, soybeans, and corn accounted for 2,022,587 tons (59.0%), more than half of the total. In China, processed foods such as kimchi (263,495 tons), refined salt (231,369 tons), and pickled foods (151,610 tons) ranked first to third, respectively.

Number of Customs Inspection Failures Similar to Previous Year... MFDS "Food Customs Inspections Ongoing"

Last year, the failure rate in customs inspections was 0.18% (1,427 cases), similar to 0.17% (1,414 cases) the previous year. The top five countries with the most failures (by number of cases) were China, Vietnam, the United States, Thailand, and India. The reasons included violations of individual standards and specifications (32.1%, 458 cases) and pesticide residue tolerance violations (22.2%, 317 cases). The Ministry of Food and Drug Safety explained that to ensure safe food imports, they conduct customs inspections including detailed tests and random sampling, and products failing inspections are either returned to the exporting country or disposed of.

The Ministry plans to switch to SAFE-i24, the first government digital system that automatically reviews import documents 24/7, 365 days a year. This will reduce the average import declaration processing time from one day to five minutes and is expected to save 6 billion won annually in logistics costs.

This content was produced with the assistance of AI translation services.