Vietnam: Shrimp exports to South Korea to boast after FTA

16/03/2015 12:00 - 558 Views

(vasep.com.vn) Free trade agreement between South Korea and Vietnam which final negotiation round finished in late 2014 is expected to achieve a higher level of liberalization comparing to FTA between South Korea and ASEAN (AKFTA).

Shrimp, classified as a 'sensitive good', is currently tariffed at 20% when imported to South Korea. With the coming FTA, the tax rate will be lower.

Statistics from Ministry of Industry and Trade show that from 2001 to 2006, trade turnover between Vietnam and South Korea increased by 14.9% annually. This rate grew to 29.1% during the period 2007-2012. Vietnam's seafood exports to Korea increased significantly. In 2010, Vietnam's seafood exports to South Korea valued at US$ 386.1 million. In 2014, the value doubled to US$ 662.8 million.

Among seafood items exported to Korea, shrimp is found to have the highest value, accounting for 48% of the total seafood export value. South Korea is currently the fifth largest market for shrimp from Vietnam, behind the US, Japan, EU and China.

In the last 5 years, Korean's imports of Vietnamese shrimp maintained positive growth. In 2014, Vietnam surpassed China to become the largest shrimp supplier with 44% of market share in Korea. China became the runner-up with 22%, followed by Thailand with 7%.

FTA between Vietnam and South Korea with the pledge to cut taxes for Vietnam's main agricultural products, including shrimp, when exporting to South Korea will create greater competitive advantage for Vietnam. Accordingly, Korea is expected to be a more important shrimp market for Vietnam in the coming years.

Shrimp imports into South Korea 2010 – 2014 by weight (Unit: MT) Source: ITC
Origin	2010	2011	2012	2013	2014	2014/2013 (%)
World	66,934	77,450	72,472	60,833	62,878	3.4
Vietnam	18,041	19,118	18,795	20,381	27,791	36.4
China	25,738	34,093	31,425	21,208	13,936	-34.3
Thailand	10,381	10296	10,434	5,626	4,424	-21.4
Ecuador	15	1113	3,478	3,914	4,251	8.6
Malaysia	8,361	8,764	4,998	4,059	4,026	-0.8
India	29	52	361	2,519	2,964	17.7
Argentina	0	124	177	331	1,041	214.5
Indonesia	305	557	406	384	869	126.3
Philippines	129	227	66	426	696	63.4
Saudi Arabia	2,064	1245	669	280	448	60.0

Shrimp imports into South Korea 2010 – 2014 by value (Unit: US$ thousands) Source: ITC
Origin	2010	2011	2012	2013	2014	2014/2013 (%)
World	323,221	412,694	428,321	437,618	566,781	29.5
Vietnam	117,419	152,703	163,974	181,705	290,244	59.7
China	74,488	99,409	110,346	96,824	69,580	-28.1
Thailand	62,908	77,308	79,272	51,978	56,165	8.1
Ecuador	119	8179	23,742	32,920	41,564	26.3
Malaysia	40,605	47,225	28,120	29,439	36,784	24.9
India	246	558	1,920	20,836	21,765	4.5
Philippines	1,654	3251	854	5,692	10,416	83.0
Argentina	0	945	1,350	2,405	9,060	276.7
Indonesia	2,474	3126	3,640	3,023	8,687	187.4
Peru	0	0	109	1,613	3,424	112.3