Free trade deals changing snack and fruit menus in Korea

“Cherries or oranges from the U.S. for dessert after dinner, beer from Belgium for drinks late at night when watching the Olympics, and almonds and raisins from the U.S. as snacks while drinking beer...”

This is a simple menu for the family of homemaker Gang Hye-jin, 32, in Seoul`s Dunchon-dong neighborhood. Until two to three years ago, her family’s household ledger displayed mostly Korean-made beers and juices as well as a list of domestic fruits such as watermelons and melons. Back then, she would have been reluctant to buy imported good because they were relatively more expensive.

But since Korea`s effectuation of free trade agreements with the European Union and the U.S., Gang and many other Koreans have had a change in dietary habits in recent months, as the prices of imported foods have declined sharply.

○ Foreign agro-products changing Korean dessert market

American fruits have benefited significantly from the lifting of tariffs since the Korea-U.S. trade accord took effect in March. According to a tally by the Seoul Agricultural and Marine Trade Corp. released Thursday, the average auctioned price of cherries was 39,500 won (35 U.S. dollars) per 5-kilogram box, down 38 percent from the same month last year.

The drop in price has fueled a surge in demand. According to the Korea Agro-Fishers and Food Trade Corp., the combined value of cherries imported from the U.S. in this year’s first half soared 76 percent year-on-year. American grapes, which account for the lion’s share of grape imports in Korea, also saw a 23-percent jump in imports over the same period.

Products from Europe are also dominating the Korean market for imported beers and juices, whose demand surges in summer. Countries that have posted the steepest sales growth in the Korean beer market over the past three years are the Czech Republic (654 percent), Italy (215 percent) and the U.K. (198 percent).

In contrast, the sales growth at Korea`s E-Mart discount stores of domestic watermelons and melons, which are traditionally the bread and butter of summer fruits in Korea, only gained 9.4 percent and 8.5 percent, respectively, as of June.

○ Consumer benefits rise, but higher competitiveness of domestic produces needed

Demand for American nuts and almonds increased so much that their imports jumped 30 to 50 percent in the first half year-on-year. Notably, imports of leaf tobacco from the U.S. doubled, while the portion of foreign-processed coffee and cocoa products in the Korean market also rose.

Price cuts for foreign agricultural products, including those from the U.S., is largely considered beneficial because it expands the scope of consumer choices. But critics say Korea must strengthen the competitiveness of domestic agricultural products with high added value.

Cherries can be produced in Korea, but the value of homegrown cherries accounted for just 3.7 percent (236 tons) of that of imported cherries last year.

Park Jae-hong, a senior researcher at the Nonghyup Economic Research Institute, said, “Notably, the surging import of cherries is poised to lead to the fruit replacing homegrown summer fruits, and this requires a solution to the problem,” adding, “If Korea can boost the competitiveness of domestic fruits by improving breeds, Korean cherries will grow competitive as well.”

ryu@donga.com