Sector Trend Analysis – Cooking oil trends in South Korea

Market and consumer overview

Despite the popularity of healthier oils such as olive oil and grapeseed oil, traditional cooking oils like soybean oil and sesame oil remain staples in South Korean cuisine due to their distinctive flavors and aroma. Many consumers prefer using these oils for authentic Korean dishes. South Korean cuisine often involves stir-frying, deep-frying, and sautéing, which require different types of cooking oils. Soybean oil and rapeseed oil are commonly used for frying, while sesame oil and perilla seed oil are preferred for seasoning and flavor enhancement. Stir-frying, deep-frying, and sautéing are common cooking methods, necessitating a variety of oils for different culinary applications. Economic factors also play a role, with premium oils appealing to affluent consumers while price-sensitive shoppers opt for more economical choices.

In South Korea, palm oil is the most consumed cooking oil (not used in households), followed by soybean and rapeseed oils. About 80-90% of cooking oil for food is sold through B2B channels, mainly in 18L cans, with the rest for direct consumer use. Palm oil is evenly split between food and biodiesel applications, while soybean and rapeseed oils dominate household cooking (USDA, 2024). Amidst a drop in consumer sentiment due to concerns over rising food prices in South Korea post-pandemic, cheap imported food ingredients are gaining dominance on dining tables (Reuters & Pulse, 2024). In the foodservice sector, palm oil is becoming more popular than other commonly used oils such as soybean and sunflower seed oil due to its affordability, accounting for 80% of total cooking oil imports (Pulse, 2024).

Media reports in 2023 highlighted concerns about the inconsistent quality of edible oils in the country, notably canola and grapeseed oil, due to harmful substances. This led to a surge in the popularity of alternative oils such as olive, avocado, and brown rice oil. Additionally, local consumers are increasingly willing to pay more for perceived healthier options. Demand for olive oil, in particular, is steadily rising in South Korea (Euromonitor International, 2023).

South Korea depends heavily on imports to meet its cooking oil needs. General import tariffs on cooking oils, whether crude or refined, are generally low, ranging from 2-8 percent, except for specialty oils traditionally consumed. Additionally, South Korea has various free trade agreements (FTAs) with major cooking oil suppliers, resulting in zero import tariffs for most oils under these agreements. These FTAs typically cover both crude and refined oils. However, under the Korea-ASEAN FTA, tariff rates for soybean oil vary between crude (zero percent) and refined (5 percent), aiming to encourage local refineries to process crude oils rather than importing ready-to-use final products (USDA, 2024).

In 2023, disruptions in the global cooking oil supply chain due to climate change and geopolitical complexities affected availability in South Korea, leading to increased unit prices for edible oils for the second consecutive year. Despite these price hikes, retail demand for edible oils in South Korea only experienced a slight decline, as consumers were hesitant to change their consumption habits in response to price fluctuations. Consequently, retail sales values mirrored the price increases, rising proportionally with the soaring cost of edible oils. To adapt to this trend, manufacturers and distributors expanded the variety and quantity of gift sets during Korean Lunar New Year and Thanksgiving, with offerings like CJ Cheiljedang's European Spray Oil Gift Set No.1, featuring olive oil and sunflower oil alongside classic options (Euromonitor International, 2023).

Production of cooking oils

In South Korea, arable land comprises less than 30% of the total land area, with two-thirds being mountains and hills. Limited land resources have prompted farmers to prioritize vegetable and rice cultivation over oilseed crops for crushing.

Oil crops production in South Korea from 2018 to 2022 reveals a generally positive trend, with total production increasing at a CAGR of 5.1%. Soya beans was the largest crop produced in South Korea with 129.9 thousand tonnes recorded in 2022, representing an increase in CAGR of 9.8% from 89.4 thousand tonnes produced in 2018. Maize was the second largest crop with production of 86.3 thousand tonnes in 2022, increasing in CAGR by 2.5% from 78.0 thousand tonnes in 2018. Other oil seeds experienced moderate growth with a CAGR of 2.2%, reaching 44.0 thousand tonnes in 2022 from 40.3 thousand tonnes in 2018. However, sesame seed production saw fluctuations, resulting in a negative CAGR of −2.1%, decreasing to 11.7 thousand tonnes in 2022 from 13.0 thousand tonnes in 2019. Groundnuts and rape or colza seed production remained relatively constant over the period.

The total production of cooking oils in South Korea has experienced a slight decline from 2017 to 2021, with a CAGR of −0.8%. Soybean oil was the largest processed crop in South Korea with a production of 193.4 thousand tonnes in 2021. While soya bean oil production remained relatively stable with a marginal decline in CAGR of −0.2%, other traditional oils such as maize, cottonseed, and sesame seed oils experienced downward trends, indicated by negative CAGRs of −1.2%, −1.9%, and −2.6% respectively. Particularly notable is the significant decrease in rapeseed or canola oil production, with a CAGR of −6.9%. Groundnut oil also saw a decline with a CAGR of −4.7%. However, there was a modest increase e in linseed oil production, showing a positive CAGR of 3.9%. Coconut oil production remained small and relatively stable with a minor decrease in CAGR of −0.3%.

Global trade overview of cooking oils

The global market for cooking oils has experienced positive growth with a CAGR of 11.0% as imports have increased from US$71.1 billion in 2019 to US$108.0 billion in 2023. India was the largest global market for cooking oils in 2023 with imports valued at US$16.5 billion, (15.2% market share) representing a CAGR of 14.1% from US$9.7 billion in 2017, followed by China with imports valued at US$12.3 billion (11.3% market share) and increase in CAGR of 8.9% from US$8.7 billion in 2019 and the U.S, with import values of US$11.8 billion (10.9% market share) in 2023.

South Korea was the 14th largest global market for cooking oils and experienced an increase in CAGR of 14.7% as imports increased from US$1.0 billion in 2019 to US$1.8 billion in 2023 (1.6% market share in 2023). Canada in comparison, was the 21st largest global market for cooking oils with import values of US$1.2 billion (1.1% market share) in 2023, representing an increase in CAGR of 21.2% from imports valued at US$0.6 billion in 2019.

South Korea trade overview of cooking oils

South Korea imported US$1.8 billion of cooking oils from global markets in 2023 and grew at a CAGR of 14.7%. The top imported cooking oils to Soth Korea in 2023 were palm oil (HS code: 1511) valued at US$611.0 million, followed by soya bean oil (HS code: 1507) valued at US$565.7 million, and rape, colza or mustard oil (HS code: 1514) with values of US$201.8 million.

The top three suppliers of cooking oils to South Korea were Malaysia with a 20.3% market share equivalent to US$356.7 million, followed by Argentina with a 17.8% market share, equal to US$311.8 million, and Indonesia, representing a 17.0% market share with US$297.5 billion in 2023. Canada was South Korea's 7th largest cooking oil supplier with a 4.0% market share, equal to US$69.6 million.

In the marketing year 2022/23, global supply chain disruptions led to decreased exports of major edible oils, resulting in higher import prices and reduced demand for oils priced above palm oil. Korean buyers turned to Australia and European countries for rapeseed oil imports due to limited exports from Canada. However, they struggled to find competitively priced alternative suppliers for olive and sunflower seed oil. Demand for palm oil increased due to its price competitiveness over soybean oil and rising demand for both food and industrial purposes, particularly in products like instant noodles. This surge in demand was fueled by the growing popularity of Korean culture globally, as seen in the K-pop and K-drama phenomenon. Korean instant noodle exports hit a record high of US$950 million in 2023, according to Korea Customs (USDA, 2024).

Canada's performance

South Korea's cooking oil imports from Canada were canola oil, (HS code: 1514) valued at US$69.6 million, 45.2 million kilograms, (98.9% market share), followed by fixed vegetable fats and oils (HS code: 1515) with values of US$0.7 million, 46.4 thousand kilograms (1.0% market share) and sunflower-seed, safflower or cotton-seed oil (HS code: 1512) valued at US$ 41,259, 1.9 thousand kilograms (0.1% market share) in 2023.

Before the Canada-Korea FTA (CKFTA) came into effect in 2015, South Korea imposed average duties of almost 50% on Canadian oilseed exports, with tariff peaks reaching as high as 487%. However, starting from January 1, 2024, all tariffs on Canadian oilseed were removed, except for imports of soybeans for human consumption exceeding the CKFTA's duty-free tariff rate quota (TRQ)of 17,000 metric tonnes annually. Canadian exporters aiming to take advantage of tariff preferences in Korea need to ensure that their goods adhere to the relevant rules of origin. The importer needs to possess a valid certificate of origin at the time of importation (Global Affairs Canada, 2023).

Canola oil became a popular choice for cooking in South Korea. CJ Cheiljedang, a leading food manufacturer, initially imported canola seeds from Canada for crushing in 2013 to expand the market but faced challenges in promoting domestically produced canola oil. Canada was the primary supplier, holding over 84% market share since the marketing year 2014/15, but began exporting more to the U.S. in marketing year 2022/23. As a result, South Korea has started diversifying its sources to Australia and Europe, a trend expected to persist (USDA, 2024).

In 2023, Canada exported US$5.6 billion, and 3.5 billion kilograms of cooking oils to global markets. The U.S was the largest export market for Canadian cooking oils (91.7% market share) valued at US5.1 billion, 3.2 billion kilograms, followed by Mexico (3.7% market share) with values of US$209.2 million, 119.1 million kilograms, and China (2.8% market share) valued at US$154.3 million, 122.4 million kilograms. South Korea was the fourth largest market (0.9% market share) for Canadian cooking oils with values of US$50.3 million and 39.0 million kilograms in 2023.

The top supplying Canadian provinces to the South Korean market were Saskatchewan, Alberta, and Nova Scotia occupying market shares of 57.1%, 31.6%, and 0.9% respectively in 2023. Top cooking oil exports from Canada to South Korea were rape, colza or mustard oil (HS code: 1514) with values of US$68.6 million, 45.2 million kilograms, followed by fixed vegetable fats and oils (HS:1505) valued at US$0.7 million, 46.4 thousand kilograms, and sunflower-seed, safflower or cotton-seed oil (HS code: 1512) with values of US$40,301, 1.9 thousand kilograms in 2023.

Retail markets

Global retail sales of cooking oils

Global retail sales of cooking oils have increased in CAGR by 7.6% from US$89.9 billion in 2019 to US$120.5 billion in 2023 and are expected to increase at a CAGR of 6.9% as retail sales attain US$168.7 billion by 2028. India was the largest global market for cooking oils with retail sales of US$24.3 billion (20.1% market share), followed by China with values of US$15.5 billion (12.9% market share) and Brazil, with retail sales of US$7.6 billion (6.3% market share) in 2023.

South Korea was the 44th largest global retail sales market for cooking oils with values of US$547.0 million, representing a 0.5% market share in 2023. South Korea experienced an increase in CAGR of 8.3% as retail sales grew from US$397.7 million in 2019 and are expected to grow with an increase in CAGR of 0.7% in the forecast period as retail sales are anticipated to achieve US$567.7 million by 2028. In comparison, Canada was the 41st largest retail sales market for cooking oils, accounting for a 0.5 retail sale market share with values of US$559.1 million in 2023. Canada is expected to achieve e growth with an increase in CAGR of 4.0% in the forecast period as retail sales attain US$681.2 million by 2028.

South Korea retail sales of cooking oil

The top three cooking oil categories in South Korea, in terms of retail value sales in 2023, were other edible oil with values of US$210.9 million (38.6% market share) increasing at a CAGR of 7.1% from US$160.1 million in 2019, followed by soy oil valued at US$110.9 million (20.3% market share), representing an increase in CAGR of 13.2% from US$67.5 million in 2019 and olive oil with values of US$110.0 million (20.1% market share) and increasing in CAGR by 16.0% from US$60.7 million in 2019.

Growth in the cooking oil category is expected to be stable with a CAGR of 0.7% as retail sales reach US$567.7 million by 2028. Half of the oil categories are expected to attain positive CAGRs in the forecast period. Soy oil, in particular, is expected to increase in CAGR by 3.2% achieving US$110.4 million by 2028. While rapeseed oil is expected to decline in CAGR of 1.6% with values of US$80.1 million by 2028.

Geopolitical risks and climate change are expected to keep edible oil prices high, leading consumers to either buy less or opt for cheaper alternatives like canola or sunflower oil. Despite price fluctuations, overall retail sales are unlikely to change significantly, remaining slightly above pre-pandemic levels. However, demand in South Korea's foodservice sector is anticipated to offer stronger growth potential compared to retail sales (Euromonitor International, 2023).

The growing "Healthy Pleasure" trend in South Korea indicates a continued rise in demand for perceived healthier edible oils like olive and avocado oil. This reflects a broader shift towards wellness and mindful eating among consumers. These oils, known for their health benefits, have become popular choices for those seeking both delicious and nutritious culinary experiences (Euromonitor International, 2023).

Competitive landscape

In 2023, the South Korean cooking oil market saw CJ Corp emerge as the dominant force, commanding a significant 37.1% market share and retail sales totaling US$202.7 million. Following behind were Ottogi Foods Co Ltd and Sajohaepyo Corp, with market shares of 18.7% and 17.1% respectively. Together, these top three companies accounted for 72.8% of the market's $547.0 million in retail sales. While competition exists from smaller players like Daesang Corp, Dongwon Group, and Borges International Group SL, the market is largely shaped by these key players.

Retail distribution channels

The majority of South Korea's cooking oil market is distributed through retail offline channels, comprising 95.2% of total sales in 2019 and 89.7% in 2023. Among retail offline outlets, grocery retailers held the largest share, accounting for 92.0% of sales in 2019 and 88.0% in 2023. Within this category, supermarkets and hypermarkets were the primary contributors, collectively representing a substantial portion of sales. Non-grocery retailers and retail e-commerce also played a role, albeit smaller, in the distribution landscape. Notably, retail e-commerce witnessed a remarkable surge, increasing its share from 4.8% to 10.3%, reflecting shifting consumer preferences towards online purchasing channels.

New product launch analysis

There were 519 new cooking oil products launched in South Korea between 2019 and 2023. Beksul and Queensbucket consistently led among the top brands, while claims related to positioning and natural ingredients remained popular throughout the years, reflecting consumer preferences for authenticity and health-conscious choices. Higher price groups, particularly those ranging from US$10.08 to US$14.07 and US$18.08 - US$24.00, saw increasing popularity, indicating a willingness among consumers to invest in premium cooking oils. Extra virgin olive oil and olive oil were the most prevalent ingredients across all years, followed by sesame seed, avocado oil, and grapeseed oil.

Recently, there has been a notable rise in the adoption of small kitchen appliances like air fryers and mini ovens in South Korea, primarily due to their cooking convenience. To address traditional cooking challenges, such as the hassle of using disposable gloves and brushes when preparing meat dishes, companies like CJ Cheiljedang, Daesang, and Sajohaepyo have introduced edible oils in spray format, enhancing kitchen convenience. Moreover, an increasing number of players are focusing on eco-friendly packaging, exemplified by Dongwon F&B's plan to expand its "Less Plastic" gift sets, incorporating recycled materials like Cr-PP for Chuseok sets. This initiative, which reduces plastic production and weight by approximately 20%, signifies a significant step towards eco-conscious packaging that may extend beyond specific events like Chuseok, potentially revolutionizing the sale of edible oils overall (Euromonitor International, 2023).

Examples of new products

For more information

The Canadian Trade Commissioner Service:

International Trade Commissioners can provide Canadian industry with on-the-ground expertise regarding market potential, current conditions and local business contacts, and are an excellent point of contact for export advice.

• Find a Trade Commissioner

More agri-food market intelligence:

International agri-food market intelligence
Discover global agriculture and food opportunities, the complete library of Global Analysis reports, market trends and forecasts, and information on Canada's free trade agreements.

Agri-food market intelligence service
Canadian agri-food and seafood businesses can take advantage of a customized service of reports and analysis, and join our email subscription service to have the latest reports delivered directly to their inbox.

More on Canada's agriculture and agri-food sectors:

Canada's agriculture sectors
Information on the agriculture industry by sector. Data on international markets. Initiatives to support awareness of the industry in Canada. How the department engages with the industry.

For additional information on the SEOUL FOOD 2024, please contact:

Ben Berry, Deputy Director
Trade Show Strategy and Delivery
Agriculture and agri-food Canada
ben.berry@agr.gc.ca

Resources

• Euromonitor International, Data statistics, 2024
• Euromonitor International, November 2023, Edible Oils in South Korea
• FAO food and agriculture statistics, 2024
• Global Affairs Canada, 2023, Tariff preferences for Canadian exports to Korea
• Global Trade Tracker, 2024
• Mintel Global New Products Database, 2024
• Pulse by Maeil Business News Korea, January 2024, Rising costs drive restaurants towards cheaper alternatives
• Reuters, March 2024, S.Korea consumer sentiment dips as food inflation emerges as top election issue
• USDA, March 2024, South Korea: Vegetable Oil Market Overview

Sector Trend Analysis – Cooking oil trends in South Korea 2024
Global Analysis Report

Prepared by: Zhi Duo Wang, Market Analyst

© His Majesty the King in Right of Canada, represented by the Minister of Agriculture and Agri-Food (2024).

Photo credits
All photographs reproduced in this publication are used by permission of the rights holders.
All images, unless otherwise noted, are copyright His Majesty the King in Right of Canada.

To join our distribution list or to suggest additional report topics or markets, please contact:

Agriculture and Agri-Food Canada, Global Analysis
1341 Baseline Rd, Tower 5, 3rd floor
Ottawa ON  K1A 0C5
Canada
Email: aafc.mas-sam.aac@agr.gc.ca

The Government of Canada has prepared this report based on primary and secondary sources of information. Although every effort has been made to ensure that the information is accurate, Agriculture and Agri-Food Canada (AAFC) assumes no liability for any actions taken based on the information contained herein.

Reproduction or redistribution of this document, in whole or in part, must include acknowledgement of agriculture and agri-food Canada as the owner of the copyright in the document, through a reference citing AAFC, the title of the document and the year. Where the reproduction or redistribution includes data from this document, it must also include an acknowledgement of the specific data source(s), as noted in this document.

Agriculture and Agri-Food Canada provides this document and other report services to agriculture and food industry clients free of charge.