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76 THE JOURNAL OF COMMERCE www.joc.com TOP 100 IMPORTERS AND EXPORTERS 2015 JUNE 1.2015 TOP 100 IMPORTERS AND EXPORTERS 2015 By Greg Knowler YO U C A N ' T E AT just one potato ch ip. Nowhere, perhaps, is t hat more t r ue than in South Korea, where an insatiable appetite for honey-fl avored chips has sent potato prices soaring. According to data from the state-run Korean Rural Eco- nomic Institute, the wholesale price of a 20-kilogram box of white-skinned superior pota- toes, a variety that suits the making of chips — or crisps, as they are known in some countries — rose 122 percent in April from a year earlier, and was up 19 percent from March. Market watchers attributed the spike to the honey-fl avored chip craze that began early this year. Nongshim, the country's larg- est food maker, told Korean news agency Yonhap that it had purchased 6,000 tons of superior potatoes since late last year in order to increase production, an enormous 5.2 percent of South Korea's annual potato production of 115,332 tons. "We will buy much more potatoes this year from South Korean potato farmers," a Nongshim offi cial said. The company said it sold honey chips worth 13 billion won (US$11.9 million) in the last week of April alone. The chip craze has been fueled by social media as celebrities post images and selfies with packets of the honey-fl avored products that are now diffi cult to fi nd. What is popular in Korea spreads throughout Asia. A 65-gram packet of the chips was selling on eBay in Hong Kong in May for HK$333.36, or $43. Despite World Trade Organization import quotas, a benefi ciary of the potato demand has been Australia. More than 90 percent of Australia's vegetable exports to South Korea are potatoes as farmers make the most of the Korea-Australia Free Trade Agreement that came into effect in Decem- ber, reducing tariffs on the vegetables. South Korea is Australia's fi fth-largest export market for agricultural, fisher- ies, forestry and food products, valued at US$2.3 billion. Agricultural exports alone are expected to be 73 percent higher by 2030 under the trade accord. Consumption of chips has jumped 30 percent across North and South Asia, said Robbie Davis, CEO of Potatoes South Aus- tralia, the peak industry body for the entire value chain. "Trade has opened up since the Korea FTA with Australia," where the zero tariff exports run counter-seasonal to the U.S., she told The Journal of Commerce. A spokesman for AUSVEG, the potato and vegetable growers association of Austra- lia, said a seasonal tariff elimination had been negotiated for the December-April period, the nation's peak supply time. This put the industry on equal footing with the U.S. for fi ve months of the year. The WTO quota system will be removed for potatoes for chipping for these months, and they will enter duty-free. "With the Korean appetite for Australian potatoes already established, the Korea-Aus- tralia Free Trade Agreement has provided Australian potato growers with a potential means of boosting their presence in this sig- nifi cant market, thanks to tariff reductions on Australian potato imports into South Korea linked to the deal," Davis said. JOC Contact Greg Knowler at greg.knowler@ihs.com and follow him on Twitter: @greg_knowler. Crazy for Chips Australia reaps the gains as potato prices spike over South Korea's craving for honey-fl avored crisps A 65-gram packet of chips was selling on eBay in May for HK$333.36.