South Korean Seafood Imports from Japan Decline Further on Fukushima Wastewater Release Worries and High Prices

 The latest Korea Customs data showed that Korean imports of HS Code 03 products, which include fish, crustaceans, mollusks, and other aquatic invertebrates, dropped this June by 18% YoY to 80.6 thousand mt, their lowest level for a June since 2019.

Imports of these products, particularly from Japan, dropped by 35% year-on-year (YoY) to 1.91 thousand mt, the lowest level for June since at least 2017. It was also the sharpest YoY drop since April 2020, when the Covid-19 pandemic started.

Japanese seafood demand has generally been declining on concerns over the release of the Fukushima wastewater, but also along with considerably high prices.

Korean import prices remain considerably high compared to last year's levels and the levels of the previous five years, despite a generalized decline in global input costs. In Jun-23, the average import price from all locations was USD 4.36/kg, up by 8% YoY and up by 12% compared to the five-year average. This was also the highest price for June since 2018. The growth pace of the seafood import price is higher than Korea’s generalized consumer inflation rate of 2.7% in June.

It's worth noting that the gap between seafood import prices’ current levels and past ones is wider when considering solely imports from Japanese origins. This June, the average price for seafood imports from Japan was USD 5.32/kg, which is 20% above Jun-22 levels and 33% above the five-year average.

Last month, higher prices played a bigger role in decreasing import volume than concerns over the release of the wastewater, as the import value was only down 2% YoY. This meant that Koreans were paying more or less the same amount for Japanese seafood, despite the fact that they were getting less of it. Nonetheless, as expected, the decline in June’s import value was much more pronounced (-22% YoY), meaning Koreans now spend less money on Japanese seafood than before. This underlines shifting preferences, likely due to growing concerns about contamination.

Source: Tridge and Korea Customs

As mentioned in a past analysis covering the issue, import volumes could likely be affected further in the upcoming months due to growing concerns over the release of the Fukushima wastewater, which could start as soon as August. For now, seafood imports from Japan are facing more scrutiny. Yet, concerns aren’t just limited to the seafood imports from Japan but also to Korea’s own domestic seafood products and other products from the area.

The magnitude and range of the effects remain unknown, but when the actual nuclear disaster happened, Korean imports of Japanese seafood sharply declined, while import prices from this origin began to trend upward and became more volatile. So at least a part of the effect in imports and prices could already be “priced in.”