Government to increase supply of imported fruits to stabilize fruit prices
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The government is considering further extending the fuel tax cut, which is scheduled to end in April, to stabilize prices. In order to disperse demand for fruits, such as apples and pears, the government will continue to expand the supply of imported fruits, including cherries and kiwis, while expanding discount events for agricultural and livestock products, which are being held mainly at large retailers, to traditional markets. Regarding the high-flying prices of processed foods, the distribution and food industries are increasingly under pressure to cut prices on grounds of the recent decline in raw material prices.
The Ministry of Economy and Finance, the Ministry of Agriculture, Food, Rural Affairs and Forestry, and the Ministry of Oceans and Fisheries reported on the direction of price response at a meeting chaired by President Yoon Suk-yeol on March 18.
"All ministries are responding with full force to stabilize inflation in the 2 percent range," Deputy Prime Minister Choi Sang-mok said at the meeting, adding, "If international oil price instability persists, we will consider further extending the fuel tax cut after April this year.“
As agricultural prices, which have plummeted due to poor growth and disease, are difficult to stabilize quickly with government support alone, the extension of the fuel tax cut is an indication that the government will continue to seek to ease inflationary pressures.
The government decided to respond to the rise in fruit prices caused by the sluggish production of fruits, such as apples and pears, by expanding the supply of imported fruits to disperse demand. To the current 24 imported fruits subjected to tariff reduction, five new fruits, including cherries, kiwis, and mangosteen will be added, with unlimited supply.
In particular, for bananas, whose prices have been rising recently, and oranges, which are in high demand as a substitute for apples and pears, the Korea Agro-Fisheries & Food Trade Corporation (aT) will expand direct imports and supply them to the market in earnest starting this weekend.
In the case of apples, where production has dropped by about 30 percent on-year, stocks are 100,000 tons lower than usual, and the government estimates that there will be a shortfall of about 30,000 tons by June, when shipments of newly harvested apples begin. The government plans to make up the shortfall by expanding the supply of imported fruits until new fruits are harvested. President Yoon said, "We will make all-out efforts to lower the price of apples to the average level," but some predict that the effect of price reduction through the expansion of the supply of imported fruits will only prevent further increases.
The government also plans to increase the discount rate of the discount events for agricultural products, which are being held mainly at superstores, from 20 percent to 30 percent, and to come up with a way for shoppers to receive a discount in traditional markets.
The government is also stepping up pressure on the food industry to help stabilize prices, emphasizing the industry’s capacity to cut prices as costs fall.
According to the Standard & Poor's (S&P) GSCI Grains Index, international prices of wheat, corn, and soybeans, which soared after the outbreak of the Russia-Ukraine war, are recovering to pre-war levels. The government plans to communicate with the industry to ensure that the declining costs can be reflected in prices, while also reducing tariffs on major food ingredients.
Han Hoon, Vice Minister of the Ministry for Food, Agriculture, Forestry and Fisheries visited the factory of confectionery company Orion in Cheongju and asked the company to actively cooperate in stabilizing prices. Orion CEO Lee Seung-joon said, "We have no plans to raise prices this year and will actively participate in the government's price stability plan."
※This article has undergone review by a professional translator after being translated by an AI translation tool.
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