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Strong year for New Zealand-South Korea trade

The value of total trade in goods between New Zealand and South Korea rose 33% in 2018 to NZ$4.5 billion, led by a 45.1% increase in imports from South Korea.  Exports from New Zealand to South Korea, New Zealand’s fifth largest goods trading partner, increased 17% in 2018 on the previous year, up to NZ$1.7 billion.

 

“This is very strong growth in trade with South Korea, especially as overall goods exports from New Zealand increased by only 7%,” said Philip Turner, New Zealand Ambassador to South Korea.  “It appears to show the results of the FTA, which came into effect at the end of 2015, are now kicking in..”

 

The growth in New Zealand exports to South Korea was led by an 18% increase in high quality New Zealand food and beverage products to NZ$755 million, with increases of 19.8% in dairy exports, 15% in meat exports, and 47.6% in kiwifruit.

 

Wood and wood products remain the largest export category to South Korea, worth over NZ$480 million annually, but the category saw easing volumes of rough timber exports in 2018.

 

“There are some exciting niche export areas where New Zealand has a strong brand presence in South Korea,” said Ambassador Turner.  “For example, exports of honey increased 200% in 2018 and wine exports grew by 24%.”

 

“The Korea-New Zealand FTA reduced tariffs on New Zealand wine from 15% to 0% in 2015, and there has been strong growth since then off a low base. Events such as the annual Kiwi Chamber wine festivals in Busan and Seoul have also helped to increase the profile of New Zealand’s products.”

South Korea has also become New Zealand’s second largest export market for un-wrought aluminum, with exports increasing 50% in 2018 to NZ$169 million.  Ambassador Turner said: “This is another example of complementary economies, where New Zealand provides an input product to South Korea, while importing for example the refined oil needed to power our economy in New Zealand”.

 

The 45.1% increase in South Korea’s exports to New Zealand was largely due to a 113% increase in the value of refined oil exports, up to NZ$1.3 billion – this product category alone accounted for almost 30% of the trade between New Zealand and South Korea.

 

Iron and steel exports to New Zealand rose 31% to NZ$110m, while exports of vehicles remained steady around NZ$452m.  Construction machinery increased 32.3%, up to NZ$107m.

 

“As the Korea-New Zealand Free Trade Agreement enters its fifth year, we are excited to see this trade growth, and expect that 2019 will be another good year for trade between our two countries. And from next year, the Korea-New Zealand FTA will deliver further benefits, including duty free access for all kiwifruit and further increases in the quotas for duty free dairy products” said Ambassador Turner.

 

New Zealand Embassy Seoul, February 2019

Exports

  • Total goods exports to Korea in 2018 increased 17% on 2017 figures, up to NZ$1.7bn. Overall NZ exports to all countries increased 7%.
  • Wood and wood products remains the largest export category to South Korea, worth NZ$483m in 2018, down 6.5% from 2017 (due to easing volumes of rough timber). South Korea is New Zealand’s third largest market for wood exports.
  • Dairy product exports grew 19.8% in 2018, up from NZ$191m to NZ$229m in 2018. Cheese remains the largest export category with NZ$114m in 2018 (up 4.9%), but the growth was led by a strong 67.4% increase in butter exports (52% increase by volume) to NZ$49m.  From 2021, cheddar cheese becomes duty free.
  • Exports of honey increased 200% by volume and 218% by value from 2017 to 2018, to just over NZ$4 million.
  • South Korea is our 9th largest export market for meat and meat products, with exports up 15.0% in 2018 to NZ$206m, mainly frozen beef.
  • Fish and seafood exports declined by 13.1% in 2018 to NZ$27m.
  • Exports of un-wrought aluminum increased by 50% in 2018 to NZ$169m (28% by volume), up from NZ$88m in 2016, making South Korea the second largest export market for this product after Japan.
  • Exports of kiwifruit to Korea increased 47.6% in 2018, up from NZ$78.7m to NZ$116m, partly driven by price increases as volume increased by 24.3%. From next year, all New Zealand kiwifruit will enter the Korean market duty free.
  • Korea is the third largest market in the world for NZ food preparations, up 15% in 2018 to NZ$116m.
  • Wine exports to South Korea increased 24% in 2018 to NZ$3.5m.
  • The value of processed primary products exports to South Korea was up 16.7% in 2018 to NZ$476m, accounting for approx. 30% of total New Zealand exports to South Korea. Unprocessed primary products made up around 25%, worth NZ$432m in 2018, up 26% on the previous year.

Imports

  • Imports from South Korea to New Zealand increased 45.1% in 2018, up from NZ$1.9bn to NZ$2.8bn.
  • This reflected a 117% increase in refined oil imports from South Korea, up to NZ$1.3bn in 2018, and moving South Korea into New Zealand’s third largest supplier of refined oil.
  • Imports of vehicles remained steady around NZ$452m, however there was a 32.3% increase in the value of bulldozers and such machinery, up to NZ$107m. Overall machinery imports from South Korea rose 11% to NZ$283m.
  • Iron and steel imports from South Korea rose 31% to NZ$110m in 2018, making South Korea the largest source of iron and steel to New Zealand in 2018, ahead of Australia.