[News Terms] Soaring Fruit Prices: 'Applelation'

Golden Apples, Poor Harvests Due to Abnormal Climate and Declining Growers
Emergency Imports Also Impossible, Household Burdens Increasing

'Applation (apple+inflation)' refers to the phenomenon of price inflation caused by apples. The term is a combination of 'Apple' and 'Inflation,' meaning a rise in prices. It started with the increase in apple prices, which led to a simultaneous rise in the prices of other fruits, making 'apple' the prefix.

According to the Korea Agro-Fisheries & Food Trade Corporation on the 15th, the wholesale auction price of apples at Garak Market the previous day was 116,171 KRW (based on 10 kg, special grade). This is nearly double the price from a year ago (63,738 KRW). The wholesale auction price for a grade lower product (upper grade) was 67,477 KRW, which also rose 75.5% compared to the previous year's price (38,453 KRW). The 'intermediate wholesaler selling price (wholesale price)'?the price at which wholesalers sell to small retailers?was 91,040 KRW (10 kg, upper grade) on the same day, more than twice the price from the previous year (41,028 KRW).

On the 12th, Garak Agricultural Market in Songpa-gu, Seoul, showed a quiet scene.
[Photo by Jo Yongjun]

The reason apples have become 'golden apples' is largely due to poor harvests caused by abnormal weather. Because apple trees could not grow properly and bore fewer fruits due to abnormal weather, the supply of apples decreased. Moreover, the cultivation area has shrunk as apple farming households have disappeared due to extreme aging.

In fact, last year's apple production was only 394,000 tons, a 30% decrease from the previous year (566,000 tons). The causes are attributed to cold damage and pest damage from abnormal weather, as well as a reduction in cultivation area. The Korea Rural Economic Institute forecasts that the apple cultivation area, which is 33,800 hectares (ha) this year, will decrease by 8.6% to 30,900 ha by 2033. This means an area equivalent to ten times Yeouido (290 ha) will disappear. If cold damage, pest damage, and heavy rains occur again this spring as they did last year, production will decrease further and apple prices will inevitably rise more.

As apples become expensive, demand for other fruits as substitutes has surged, causing prices of fruits considered 'alternative fruits' to rise as well. On the 14th, the wholesale price of pears was 102,800 KRW per 15 kg, a 134% increase from the previous year. According to Statistics Korea, prices of almost all fruits rose significantly compared to the previous year, including tangerines by 78.1% and strawberries by 23.3%. Last month's consumer price index was 113.77, a 3.1% increase compared to the same period last year, but the perceived increase in living costs was higher at 3.7%. Fruit prices have pushed up the cost of living.

It is reported that the government's stockpile, the 'government contract cultivation volume,' has also been completely depleted. Unlike rice, apples are not subject to government stockpile management, so the government contracts with farmers to cultivate apples for supply when needed to stabilize supply and demand. Last year, the government contracted 49,000 tons of apples with farmers, which were supplied to the market during last year's Chuseok and this year's Lunar New Year and have all been exhausted.

Imported fruits are displayed at a large supermarket in Seoul.
Photo by Jinhyung Kang aymsdream@

Voices calling for the allowance of apple imports to ease supply instability are growing louder. The government permits the import of about 30 fruits including oranges, grapes, and mangoes, but blocks apple imports citing concerns about the introduction of foreign pests and diseases. Fruits and vegetables must undergo an eight-step import risk analysis procedure under the Plant Quarantine Act to ensure pest safety before they can be imported.

The eight-step procedure includes: receiving a request from the exporting country ⇒ starting the import risk analysis procedure ⇒ preliminary risk assessment ⇒ individual pest risk assessment ⇒ drafting risk management measures ⇒ drafting import allowance standards ⇒ public notice of import allowance standards ⇒ promulgation and enforcement of import allowance standards. According to the Ministry of Agriculture, Food and Rural Affairs, it takes an average of 8.1 years for imported fruits to pass through all these procedures. The government’s position is that it is impossible to simplify the legally mandated import risk analysis procedure to allow emergency imports.

Currently, four countries wish to export apples to Korea: Japan, New Zealand, Germany, and the United States. Japan has progressed the furthest in the procedure and is currently at the fifth step, drafting risk management measures, but it is uncertain whether the remaining steps can be completed.

Ultimately, it depends on the government's will. The government, which had been passive about imports considering apple farmers, is reportedly reviewing measures including allowing imports as apple prices have surged. With rapidly rising prices showing no signs of falling, household burdens continue to grow.