After Shine Muscat, 'Red Grape'... Korean Fruit Establishes Itself as an Export Star [Global Star K-Food]①

Agricultural and Food Market Expanded by Mega FTA

The export stage for K-agricultural products is continuously expanding thanks to Free Trade Agreements (FTAs). Starting with the Korea-Chile FTA, which came into effect in 2004, the number of countries with which FTAs have been signed has now increased to a total of 61. During this period, agricultural product exports have also surged sharply. Despite concerns that "the agricultural sector would suffer significant damage upon signing FTAs," agricultural and food products have established themselves as key export earners. This is regarded as an achievement resulting from the efforts of farmers and the government to expand exports.

CEO Kim Siho's Hongju Seedless exported to Vietnam this year. (Photo by Cheongsil Hongshil)

According to the Korea Customs Service on the 28th, there have been 21 FTAs in effect with 59 countries so far. Additionally, FTAs with the Philippines and Ecuador have been signed and finalized, awaiting enforcement, and negotiations are ongoing with Russia, Malaysia, Uzbekistan, and others.

Agricultural products growing faster than overall exports... Fruit exports up 5.5 times

FTAs are playing a driving role in our exports. In 2016, the export value of preferential items was $2.06753 billion, but the cumulative export value for the first three quarters of this year reached $2.80997 billion, an increase of 35.9%. The "FTA utilization rate," which is the percentage of FTA certificates of origin issued for preferential export items to FTA partner countries, was only 50.8% in 2016 but improved to 77.3% in the third quarter of this year. This indicates that FTAs are driving export growth.

As the export territory expands, agricultural product exports are also showing remarkable growth. According to agricultural and food export information from the Korea Agro-Fisheries & Food Trade Corporation (aT), the cumulative export value of agricultural products from January to October this year was $6.57873 billion, a 2.5% increase compared to $6.41864 billion in the same period last year. Considering that overall exports decreased by 10% during the same period, agricultural product exports have remained resilient despite the general export downturn.

Looking at the figures by year, the growth trend in agricultural product exports is even more evident. Agricultural product exports were only $1.5632 billion in 2003, just before the Korea-Chile FTA came into effect, but surged to $3.72168 billion in 2010, $5.2206 billion in 2015, $6.67517 billion in 2020, and $7.71382 billion last year. While total exports increased 3.5 times (252.7%) from 2003 to last year, agricultural product exports increased approximately 4.9 times (393.5%). In particular, fruit exports showed significant growth, rising 5.5 times (453.5%) from $70.55 million in 2003 to $390.48 million last year.

'Red Grapes' Continue the Shine Muscat Legacy

The government and local governments are actively working on developing new varieties to sustain the growth of fruit exports. A representative example is the "red grape." The Gyeongsangbuk-do Agricultural Research and Extension Services developed the 'Red Claret' in 2021 by crossbreeding the reddish Berry Varad variety with Shine Muscat to cultivate the "second Shine Muscat." Red Claret is a red grape variety with large berries that can be eaten with the skin, similar to Shine Muscat. Its sugar content is 20.5 Brix, as sweet as Shine Muscat.

Dr. Kwon Min-kyung of the Gyeongbuk Agricultural Research and Extension Services, who is in charge of grape new variety development and dissemination technology research, explained, "Red Claret was developed as a customized variety targeting the Vietnamese market. Since Shine Muscat has been successfully exported, we developed and pilot-distributed Red Claret to target Vietnamese consumers who prefer red grapes, achieving export results." The Gyeongbuk Agricultural Research and Extension Services distributed Red Claret seedlings in 2021 to two farms in Sangju, Gyeongbuk, where many Shine Muscat farmers are located.

The strengths of Red Claret include its deep red color, large berries, and early harvest. Although the berry size is similar to Shine Muscat, the red color makes it easier to select fully ripened grapes during harvest. Also, the harvest period is about two months earlier than Shine Muscat, allowing for staggered shipping.

On the 15th, Mr. Moon Seon-ho, whom we met in Sangju, Gyeongbuk, is explaining about the new variety Red Claret.

One of the two farms selected for the Red Claret pilot project, Mr. Moon Seon-ho, has been cultivating Shine Muscat since 2013. Mr. Moon said, "Seeing many farmers switch from Campbell grapes to Shine Muscat around 2018-2019, I started thinking it was time to switch to a new variety. When I heard that the Gyeongbuk Agricultural Research and Extension Services were developing Red Claret, I applied to be a pilot farm and was fortunately selected at the end of 2020. I received seedlings in June 2021 and harvested for the first time this year."

Mr. Moon's challenge was successful. He exported $22,000 worth of Red Claret, harvested for the first time this year, to Vietnam. He explained, "Around April this year, a Vietnamese buyer visited the farm, inspected Red Claret, and promised to buy it at a higher price than Shine Muscat. When exporting, the price offered was 120,000 KRW per 2 kg, 2 to 3 times higher than Shine Muscat, and the contract was concluded at this price, exporting about 1 ton to Vietnam."

Mr. Kim Si-ho, CEO of the Cheongsil Hongsil Agricultural Cooperative Corporation, is also cultivating the red grape new variety Hongju Seedless. Hongju Seedless is a variety developed by the National Institute of Horticultural and Herbal Science under the Rural Development Administration in 2006, known for its sweet and sour grapes that can be eaten with the skin. Last year, $44,000 worth was exported to Indonesia and Singapore, and this year, due to cold damage reducing production, about $20,000 worth was exported to Vietnam.

Mr. Kim believes that to continue the popularity of K-grapes, it is necessary not only to develop new varieties but also to continuously improve them. He said, "Thanks to the popularity of K-content and K-food, Shine Muscat has been a huge success, but recently, due to oversupply, the taste and quality have declined, putting the premium strategy at risk. Continuous interest and efforts are needed not only in new variety improvement but also in how to cultivate already developed new varieties more deliciously."