[Asia Economy Reporter Kim Hyunjung] The government is promoting non-face-to-face transactions in agricultural product wholesale distribution. The Ministry of Agriculture, Food and Rural Affairs and NongHyup announced on the 26th that they will pilot operate the online agricultural product trading system (Online Agricultural Product Exchange) starting from the 27th.
This initiative aims to reduce intermediate distribution costs and alleviate the concentration of supply to minimize sharp price fluctuations. Fresh agricultural products have not seen active non-face-to-face transactions due to buyers' strong tendency to visually inspect goods directly. However, the government has accelerated its efforts in response to the COVID-19 pandemic.
The Online Agricultural Product Exchange is a type of online agricultural product wholesale market where major producer organizations nationwide directly register product information in the system, and various buyers participate and trade without restrictions of time and place. Since products are delivered directly from production sites, intermediate distribution costs are reduced, and losses or shrinkage caused by loading and unloading are expected to decrease. Additionally, since distribution volumes can be controlled in advance, it helps stabilize prices by mitigating sudden concentration of supply.
This year, pilot trading will be conducted for onions and garlic, and by 2022, the range of items and volumes will be expanded to include major vegetables, fruits, and horticultural products. Onion trading will start from the 27th, and garlic trading will begin after July.
Major production distribution centers (APCs), which can standardize and regulate product specifications, will participate as suppliers in online trading. Key buyers include intermediate wholesalers at nationwide NongHyup wholesale markets, NongHyup Hanaro Distribution, large supermarkets, food material distributors, the Small Supermarket Association, and preprocessing companies.
The trading methods will operate both bidding transactions, where the highest bidder wins, and fixed-price transactions at predetermined prices. Participation is possible via the internet and mobile devices, and the market will be open daily except weekends.
Bidding transactions will be held twice daily from 9 to 10 a.m. and 7 to 8 p.m., with plans to increase to three times daily as trading volumes grow. The listing fee borne by shippers is set at 3%, lower than the general wholesale market fee of 4 to 7%.
Minister of Agriculture, Food and Rural Affairs Kim Hyunsoo emphasized, "Through the Online Agricultural Product Exchange, we will establish a healthy competitive system among distribution channels and strengthen the advantages of online trading to contribute to the efficiency of agricultural product distribution and price stabilization."
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