Coffee Bean Prices Decline Following Removal of VAT and Tariff Quotas

[Asia Economy Sejong=Reporter Kim Hyewon] The price of coffee beans (green beans) is on a downward trend.

According to the Ministry of Agriculture, Food and Rural Affairs on the 8th, the import price of green beans as of December last year was 6,058 KRW per kg, down 18.1% from the peak in October (7,401 KRW per kg).

This is the result of a combination of stable international coffee bean prices and exchange rates, along with the elimination of value-added tax (10%) and the removal of the tariff quota (from 2% to 0%) on all imported green beans to reduce import costs.

The Coffee Association and green bean import distributors stated, "Although there was significant cost pressure due to high international coffee bean prices and a sharp rise in exchange rates, the burden has clearly eased since December last year."

The industry expects that this price decline will become more pronounced after the first quarter of this year, as international coffee bean prices (futures) are typically reflected in import prices with a lag of 2 to 3 months.

The government has decided to extend the 0% tariff quota policy on all green bean imports until the end of this year.

Yang Joo-pil, Food Industry Policy Officer at the Ministry of Agriculture, Food and Rural Affairs, said, "We will continue policy efforts to reduce cost burdens on the dining industry," and added, "We request active cooperation from the industry so that the benefits of government measures can be passed on to consumers."