Far from the tree: Koreans feeling tart over cheap U.S. price of Chungju apples

Industry

Published: 29 May. 2024, 17:18 Updated: 29 May. 2024, 19:08

Far from the tree: Koreans feeling tart over cheap U.S. price of Chungju apples

Chungju apples on display at a grocery store in the United States. [JOONGANG ILBO]

The price tag of Chungju apples in the United States at $1.29 apiece has infuriated Korean consumers for being over three times cheaper than the domestic price.

Some Koreans posted photos on Tuesday with the title "The current status of apples that used to cost 10,000 won each" on the country’s online communities showing labels reading "Chungju safe-washed apples" priced at $1.29 each, drawing a comparison to the exchange rate equivalent of $7.32.

The significant price disparity has sparked a heated debate, with many questioning the fairness of the pricing and Korea’s multilevel distribution process.

However, an official of the city of Chungju said in response that the prices of exported apples could vary due to contract farming agreements.

Contract farming refers to an agreement between buyers and producers that commits to purchasing a certain amount of annual production at a set price in exchange for a guaranteed stock of the product in accordance with the terms agreed upon. This deal ensures a stable supply of agricultural products for the buyers, while the farmers benefit from increased sales channels and income stability.

The apples in question were shipped on Jan. 18 this year. Since 2011, Chungju has been exporting between four to six tons apples to the United States every year, a local media report said, citing the city of Chungju’s official data.

As the agreement was made in early 2023, prices could not be increased.

"The price of an apple in the United States is only about $1, thus it makes no sense to apply the domestic prices of Chungju apples in the U.S. market,” a city official stated.

As the controversy grew, Chungju’s official YouTube channel released a video titled "I was deceived too," and said that the city sincerely apologizes for the controversy over the export of its apples.

Currently, Chungju apples are being sold for 3,000 won ($2.2) to 5,000 won each through domestic retail channels such as Coupang and Hi-Mart, while the best apples in the country go for around 10,000 won each, which is over three times the dollar price seen in the photo.

"It seems that there are unfair practices going on in Korea’s multistage distribution structure,” the online community user said adding, “I've heard that vegetables and fruit are expensive in Korea because of the distribution structures.”

BY CHOI HAE-JIN [choi.haejin@joongang.co.kr]