If the new agricultural trade picture with South Korea is any indication of things to come, the U.S. economic crisis may be choking off exports to countries with more fragile economies, according to a U.S. trade official in Grand Forks today.
"Pricewise, (increasing trade) is going to be a little difficult, because these days, the Korean economy is very affected by the U.S. economy," said Kristie Park, a project manager with the Food Export Association of the Midwest.
She says the South Korean Won is weakening faster than the U.S. dollar, reversing the recent trend that saw an increase in U.S. exports on the basis of a weak dollar.
Park was escorting a group of pasta buyers representing four South Korean food companies in North Dakota through various sites of the North Dakota flour and pasta industries. They had spent a day in Carrington at the Dakota Growers Pasta Co. plant and NDSU's small grains research laboratories before coming to Grand Forks Thursday to tour the North Da-kota Mill and the Philadelphia Macaroni Co.
South Korea imports 100 percent of its pasta. According to Park, the purpose of the trip was to encourage them to shift more of their pasta purchases from competing countries to the U.S.
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"South Korea imports from Italy, (the) U.S. and sometimes Indonesia and Turkey," she said. "The high-end products are coming from Italy and the U.S., but around 80 percent of that market share is dominated by the Italian product, right now. Some Korean buyers have the perception that Italian products are superior to U.S. products, so I want to change their preconception and stereotype."
Most important to Korean buyers are quality and price, Park said, claiming the quality of North Dakota pastas are "the same as or a little bit superior" to the Italian pastas.
Yet quality may now be taking a back seat to price upsets as the Korean economy, tied so closely to a sinking U.S. economy, takes on water.
"The dollar is getting very strong against the Korean Won," the trade delegate said, point-ing out a nearly 35-percent change swing in relative value since the start of the economic crisis.
