Wednesday, 25 January 2017 09:55

South Korea FTA good for cheese

Written by 
All South Korean tariifs on NZ cheese will be remoevd within 15 years. All South Korean tariifs on NZ cheese will be remoevd within 15 years.

Fonterra is bracing for a boom in cheese exports to South Korea.

It says the 12-month- old free trade agreement with South Korea offers huge potential for its dairy products there, particularly cheese.

Since the FTA was signed in December 2015, New Zealand has seen 16% growth in exports of food and beverages to South Korea.

It is NZ’s fifth-largest cheese market, worth $70m a year, comparable to the cheese trade with the US.

NZ’s new annual duty free quota of 7000 tonnes of cheese to South Korea will increase by 3% a year. Tariffs on cheddar and block mozzarella will be removed after seven and 12 years, respectively, and all cheese tariffs will be eliminated and quotas removed after 15 years.

Quotas and tariffs on butter, anhydrous milk fat and infant formula will also be phased out over 15 years.

Fonterra’s country manager South Korea, Jason Murney, says many existing custom- ers and new customers are approaching the co-op to develop new business opportunities.

“The FTA will help Fonterra deepen its com- mercial relationships in the market over time, as our access continues to increase.

“We have already seen positive results, with gov- ernment import statistics showing that NZ’s share of the Korean cheddar market has grown 60% in 2016, up from 50% in 2015.”

Fonterra has developed a new cheese specifically for pizzas, to be launched in South Korea. Koreans have a growing taste for pizza and ‘fusion’ foods.

Fonterra has increased its South Korea workforce and will buy a warehouse from which to distribute more of its products.

South Koreans are consuming more dairy products. In 1990 they consumed 43.8kg liquid milk equivalent per capita but by 2014 that had risen to 72.4kg.

The access under the FTA allows Fonterra to invest in product and supply chain inno- vations, and its South Korean business from low risk ingredients to higher value food service.

“The development of the Korean market is in line with Fonterra’s strategy of moving more milk volumes into higher margin products,” says Murney.

More like this

Editorial: Passage to India

OPINION: Even before the National-led coalition came into power, India was very much at the fore of its trade agenda.

Fonterra posts solid results

Fonterra has delivered a solid half-year result, thanks to higher margins and sales volumes across the co-op's diversified product and category mix.

Featured

Sheep drench resistance costly

Analysis by Dunedin-based Techion New Zealand shows the cost of undetected drench resistance in sheep has exploded to an estimated $98 million a year.

Dairy sheep and goat turmoil

Dairy sheep and goat farmers are being told to reduce milk supply as processors face a slump in global demand for their products.

Hurry up and slow down!

OPINION: We have good friends from way back who had lived in one of our major cities for many years.

National

Govt urged to reduce ETS units

The Climate Change Commission wants the new Government to reduce NZ Emissions Trading Scheme (ETS) auction volumes as son as…

Dairy sheep, goat woes mount

Dairy sheep and goat farmers are being told to reduce milk supply as processors face a slump in global demand…

Machinery & Products

All-terrain fert spreading mode

Effluent specialists the Samson Group have developed a new double unloading system to help optimise uphill and downhill organic fertiliser…

Can-Am showcases range

Based on industry data collected by the Motor Industry Association, Can-Am is the number one side-by-side manufacturer in New Zealand.

» Latest Print Issues Online

Milking It

Papal visit

OPINION: European farmers are going to extreme lengths to have their message heard.

Thai egg tarts

OPINION: The hustle and bustle of one of Bangkok's most popular fast food outlets may feel a world away from…

» Connect with Dairy News

» eNewsletter

Subscribe to our weekly newsletter