Overview of Dutch agri-food export to South Korea in 2020

Dutch agricultural exports to South Korea continued to grow in 2020, with a total export value of EUR 435 million, an increase of 6.1% compared to the previous year. Despite the COVID-19 related issues facing logistics in the beginning of the year, the overall agri-food trade was not damaged. Korean consumer’s growing interest in western food as well as the impact the Korea-EU FTA put positive effect on trade.

The largest export commodity in 2020 was milk powder preparation, followed by pork, beer, butter preparation and food processing machinery. Milk powder preparation, pork and beer were ranked in the second, fourth and 10th places respectively by export value among all kinds of trade commodities, including non-agricultural products exported from the Netherlands into South Korea.

Fig 1. Agrifood export
©SEO-LNV
Fig.1 Agri-food exports from the Netherlands into South Korea by year
Table 1. Top 10 Dutch agricultural commodities exported into South Korea in 2019 and 2020
------ Year 2019 Year 2020
Commodities

Exports

(Euro. Mil.)

Commodities

Exports

(Euro. Mil.)

1 Milk powder preparation 78 Milk powder preparation 103
2 Pork 62 Pork 51
3 Butter preparation 29 Beer 36
4 Food processing machinery 28 Butter preparation 26
5 Beer 27 Food processing machinery 22
6 Feed 20 Feed 20
7 Farming machinery 13 Cheese 16
8 Cheese 13 Malt extract 14
9 Cocoa preparation 12 Cocoa preparation 11
10 Malt extract 10 Starch 10

Milk powder

Milk powder preparation is a blend of milk and whey powder, originally created to lower the customs duty when exported into South Korea. Milk powder preparation exports grew remarkably and reached EUR 103 million in 2020, with an increase of 32% compared to the previous year. The Netherlands is the largest exporter of milk powder preparation, accounting for 63% of the market. As local raw milk in South Korea costs more than twice as much as the world average raw milk, the demand for high-quality dairy ingredients from abroad is high. The Netherlands has a good name in the Korean market for its high-quality dairy chain. Dutch milk powder preparation is largely used in the Korean dairy and confectionary sectors.

Pork

Pork exports stood at EUR 51 million in 2020, 16% down from a year earlier. Since local pork price is about twice as expensive as that of imported pork, Korean consumers have increasingly demanded imported pork products. In 2020, however, pork exports dropped due to Covid-19, as Dutch pork is prepared mainly in restaurants while local pork is consumed individually. While many businesses and restaurants stayed open in Korea during the pandemic, the fear of infection led to less eating out and more cooking and eating domestic pork at home. Nevertheless, in 2020 the Netherlands, as a major player, was the 6th largest exporter of pork after the US, Germany, Spain, Canada and Chile. Around 81% of pork exported from the Netherlands into Korea was frozen pork belly (called Samgyeopsal in Korean language) which is mainly used for Korean BBQ.

Fig2. Pork and milk powder preparation exports
©SEO-LNV
Fig.2 Pork and milk powder preparation exports from the Netherlands into South Korea by year

Beer

Dutch beer exports hit a record high of EUR 36 million in 2020, 34% up on-year. The export value almost doubled in two years.  In 2020, after 10 year, the Netherlands gained the first place in beer exports again, followed by the US, China, Belgium, Poland, Germany and Ireland.  Dutch beer was the only beer that grew in spite of Covid-19, while total beer imports declined by 19.2%. Especially Chinese beer and Belgian beer took a hit by - 25.6% and - 30.8% respectively. This is an indication that Dutch beer tends to be enjoyed at home rather than in bars or restaurants. 

Beer
©Stella de Smit on Unsplash

Food processing machinery

The Netherlands has exported different kinds of food processing machinery into South Korea. In 2020, the exports decreased by 17.1%. Machinery exports generally require install on site. The frequent travel of experts for this purpose was hindered in 2020 due to Covid-19.
The Netherlands was the 2nd largest exporter of food processing machinery in 2020, with  Japan being the first. With regards to meat processing/slaughtering machinery, the Netherlands was the largest exporter in 2020, accounting for 39% of the market.

Beef/veal and live poultry

For beef/veal and live poultry, new market access commodities opened in 2019 and 2020 respectively. The Netherlands exported EUR 400,000 (89 ton) of beef/veal and EUR 176,000 of live poultry into South Korea in 2020.