'Apple→Tomato→Kim' Price Bomb Passing... Next Is Watermelon?[Chosun Price Records]

(17) Starting with 'Geum Sagwa'... Food Prices Soar
Reason for Supply Shortage... "Need to Increase Fruit Stockpiling and Indoor Farming"

Starting with gold apples earlier this year, the prices of agricultural and marine products such as cherry tomatoes, cabbage, and Gim have fluctuated significantly, acting as a factor in price instability. As price surges of specific agricultural and marine products repeatedly occur due to supply shortages, experts emphasize the urgent need for government countermeasures.

According to the Agricultural Products Distribution Information (KAMIS) of the Korea Agro-Fisheries & Food Trade Corporation (aT) on the 12th, the wholesale price of one medium-sized watermelon, which has just begun shipping, was 22,475 won as of the 8th, up 34% from last year (16,733 won) and 43% from the average year (15,637 won). The price of one pack (100 sheets) of dried Gim was also 10,600 won, up 59% from last year (6,660 won) and 69% compared to the average year (6,270 won). The average wholesale price of one pack of Gim for gimbap (medium grade) in April jumped 80.1% to 10,089 won compared to the same period last year (5,603 won).

Photo of seaweed displayed at a large supermarket in Seoul on the 18th. Photo by Yonhap News.

'Due to Supply Shortage'... Prices Rise from Apples to Cherry Tomatoes to Cabbage

This is similar to the price surge of apples earlier this year. Fruit prices, including apples, showed signs of a sharp increase and nearly doubled by the end of January compared to the previous year. The wholesale price of apples (10 kg) once rose to 94,520 won, marking an all-time high. During this period, the unusual surge in fruit prices also affected the overall food price index.

Next, the price surge spread to cherry tomatoes. Although the government significantly increased its discount support budget to curb prices, cherry tomatoes were excluded from the support, allowing prices to remain strong. Since the end of March, the retail price of cherry tomatoes (product grade, 1 kg) remained about 40% higher than the average year at around 14,000 won, only returning to the 10,000 won range in early May. The wholesale price of cabbage (product grade, 8 kg) soared to around 22,000 won at the end of April, about 2.6 times higher than the average year (8,314 won).

The sudden surge in various agricultural product prices fundamentally stems from supply-side issues. Frequent rainfall, insufficient sunlight, and abnormal temperatures led to poor crop conditions and reduced harvests. However, in the case of Gim, exports increased due to poor raw material (pre-processed Gim) crop conditions in China and Japan, and stocks decreased by 25.0% and 37.4% compared to the same month last year and the average year, respectively, causing prices to rise.

With rising raw material prices, there are concerns about a domino effect on price increases. Since agricultural and marine products are basic ingredients, this affects the upward trend in dining-out prices. Especially amid ongoing increases in labor and rental costs, the food service industry is likely to implement price hikes. In fact, the dining-out price inflation rate in April was 3.0%, 0.1 percentage points higher than the overall consumer price inflation average of 2.9%.

"Discount support only provides temporary price stability... Need to stockpile fresh fruit and increase indoor farming"

When price increases are caused by supply shocks, the government's immediate options for price stabilization are limited. These mainly include ▲large-scale discount support ▲expansion of tariff quotas ▲release of stockpiles ▲requests for industry cooperation. Experts emphasize that repeated price surges of specific agricultural products require countermeasures for stable price management.

Professor Kim Dae-jong of the Department of Business Administration at Sejong University diagnosed, "The sharp rise in fruit prices and inflation this year is due to supply shortages," adding, "Vegetables and fruits have very low supply elasticity. They cannot be supplied quickly even if needed."

He pointed out that large-scale discount support only brings temporary price stability, so measures to prepare for price surges are necessary. Professor Kim said, "In the recent sharp rise in cabbage prices, heavy rainfall was a factor, and indoor farming such as greenhouses could be an alternative to price surges," adding, "In the case of apples, since it was known that Korea is becoming tropical, the government should have prepared by stockpiling. Apples are fresh fruits that can be stored for over a year, so expanding stockpiles is a necessary measure."