AUSTRALIA’S agricultural outputs and food products are in strong demand overseas, particularly in Asia where a rapidly growing middle class is outpacing food production capability.
With our high quality and high volume production, Australia is well placed to meet this demand.
South Korea is one such growing market for Australian agricultural exports. South Korea offers some exciting opportunities for Australian small and medium enterprise (SME) exporters wishing to grow their export business, however SMEs need to be aware of the financial considerations when expanding overseas to ensure they set themselves up for export success.
South Korea’s rapid historical industrialisation and high income economy have created strong demand for imports in a range of key industries. As is the case across much of Asia, the rate of population growth, and in particular the growth of the high consumption middle class, in South Korea is exceeding outputs by the country’s own agricultural sector.
This has created demand for a significant volume of imported produce. Australia is the third biggest supplier to South Korea for agriculture and food-related products. In particular, South Korea is an important market for Australian beef, with our beef exports to South Korea worth $942 million in 2014.
The demand for Australian products reflects demand for our agricultural industry’s strong reputation for quality, environmental sustainability and food safety.
The Korea-Australia Free Trade Agreement, which came into force at the end of last year, will improve market access for exporters, making it easier for Australian agricultural and food producers to export their goods to South Korea.
Export finance challenges
There are plenty of export opportunities available for SMEs, but identifying an opportunity to sell your products in the South Korean market is only the first step.
The next step is delivering on the opportunity or contract, which can be a big challenge for a small business. One of the most common issues for SME exporters in any market is funding growth. Fulfilling a large contract in a new market can have different financial considerations for a small business not used to operating overseas.