Cabbage, Carrots, and Gim Also Subject to Allocated Tariffs... Government's Full Effort to Control Food Prices

Joint Meeting of Related Ministries on Price Stabilization
Decision to Apply 7 New Types of Tariff Quotas
Strengthening Market Surveillance in Areas Closely Related to Livelihoods

The government has recently decided to newly apply tariff quotas on certain items such as cabbage, seasoned laver, and cocoa beans, whose prices have been fluctuating. To prevent price collusion and excessive distribution margins, market surveillance in sectors closely related to people’s livelihoods will also be strengthened. As the policy goal of achieving '2% inflation' faces a red light amid rising inflation trends, the government plans to mobilize all available policy measures to stabilize prices.

On the 24th, the Ministry of Economy and Finance announced that at the 'Price Stabilization Related Issues Meeting' chaired by Choi Sang-mok, Deputy Prime Minister and Minister of Economy and Finance, they discussed price trends and countermeasures for agricultural, livestock, and fishery products, petroleum products, processed foods, and industrial goods, as well as plans to strengthen market surveillance in key sectors. Attending the meeting were Song Mi-ryeong, Minister of Agriculture, Food and Rural Affairs; Kang Do-hyung, Minister of Oceans and Fisheries; Han Ki-jung, Chairman of the Fair Trade Commission; Bang Ki-seon, Director of the Office for Government Policy Coordination; Choi Nam-ho, 2nd Vice Minister of Trade, Industry and Energy; and Baek Won-guk, 2nd Vice Minister of Land, Infrastructure and Transport, among other related ministry vice ministers.

Choi Sang-mok, Deputy Prime Minister for Economy and Minister of Economy and Finance (center), held a 'Price Stability-related Current Issues Meeting' at the Government Seoul Office Building on the 24th, discussing price response measures with Song Mi-ryeong, Minister of Agriculture, Food and Rural Affairs (left), and Kang Do-hyung, Minister of Oceans and Fisheries (right). Photo by Ministry of Economy and Finance

The attendees agreed on the heightened uncertainty in prices due to global high inflation, including the recent Middle East crisis causing international oil price increases, and decided to concentrate cross-ministerial efforts to quickly establish a stable price trend.

First, tariff quotas will be newly applied to five items with sustained price increases: napa cabbage, cabbage, carrots, grapes, and dried laver, and import procedures will be expedited so that tariff reductions can be supplied by next month. For 25 items with high prices, including napa cabbage, cabbage, tomatoes, and carrots, delivery prices will be supported to reduce the consumer-perceived prices. For six popular fish species, the government has supplied 79.5% (1,559 tons) of the originally planned 1,960 tons of stockpiled quantities to the market from March to date and plans to supply the remaining amount within this month.

For processed foods, two additional raw materials?cocoa beans and seasoned laver?will be added to the 29 food raw materials currently subject to tariff quotas. Since the government has lowered tariffs on food raw materials and international grain prices have significantly stabilized downward, the food industry is urged to promptly and sufficiently reflect cost reductions in product prices and strengthen their own cost-saving efforts to help alleviate the burden on the public. Additionally, essential daily goods such as detergents and shampoo will be closely inspected at large convenience stores and marts to ensure that excessive distribution margins are not being applied.

The government has extended the fuel tax reduction measure, which was scheduled to end this month, until the end of June. Amid recent volatility in international oil prices due to monitoring of Middle East crisis risks, the government plans to strengthen market inspections to prevent excessive price hikes beyond international oil price increases. Prices at discount gas stations will be managed to remain 30 to 40 won lower than market prices. A government official stated, "Until international oil prices stabilize, we will monitor price trends weekly through the Petroleum Market Inspection Meeting and continue operating a cross-ministerial petroleum market inspection team to strictly respond to illegal activities such as collusion and tax evasion."

According to the 'March Consumer Price Trends' announced by Statistics Korea, fruit prices surged by 40.9% compared to a year ago. In particular, apple prices rose by 88.2%, significantly increasing from the previous month (71%). On the 23rd, a customer visiting Hanaro Mart Yangjae branch in Seocho-gu, Seoul, is looking at the apple prices. Photo by Kang Jin-hyung aymsdream@

Although the government expects inflationary pressures to ease in the second half of the year, domestic and external conditions remain challenging. Along with the high prices of agricultural products and rising fuel costs, the possibility of public utility fee increases, such as electricity and transportation fares, which were suppressed during the general election, is raising inflationary pressures.

The government plans to focus on monitoring unfair practices such as price collusion and excessive distribution margin collection. The Fair Trade Commission will analyze the degree of competition in sectors closely related to people’s lives, including agricultural, livestock, and fishery products, processed foods, and industrial goods, and work with the relevant ministries to devise institutional improvement measures. If illegal activities such as collusion are suspected based on the analysis results, investigations will be promptly initiated. Measures to prevent the recurrence of price collusion will also be developed.