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Korea: vegetable prices rise sharply due to coronavirus fear

The continuing outbreak of the COVID-19 virus has considerably affected the South Korean food market. The first local infection was reported there on 20 January 2020. Concern about the virus skyrocketed after a large outbreak was discovered.

This was on 18 February in a religious sect in the city of Daegu. Daegu is the largest city in the Gyeongbuk province, in the southeast of the country. The new daily infection in the Gyeongbuk province was at its highest in the days around 26 February.

Local authorities are making extra efforts to limit the spread of this disease to other areas of Korea. On 26 February, 1,146 people tested positive for this virus in South Korea. There were eleven deaths reported. Just a week earlier, the number of cases was only 51.

Fresh product prices have risen sharply
Red pepper prices on the wholesale market increased by 31%. This was between 12 and 20 February. This statistic is according to the Korea Agro-Fishery Marketing Corporation. The reason for this is that the supply of imported peppers from China has fallen.

This is a result of the COVID-19. In January of this year, South Korean imports of horticultural goods from China decreased significantly. Compared to the same period the previous year, these dropped by 67% to 101,052 tons. Other agricultural products have seen a hike in prices too.

This is also as a result of less supply from China. These products include carrots (28%), spinach (17%), and cabbage (six percent). Prices for prepared kimchi (fermented cabbage and other vegetables) rose too. It went up 20% because South Korea is so heavily dependent on Chinese imports.

South Korean retailers and restaurants are worried. It will take time for Chinese distributors and processors to get normal product processing up and running again.

Far fewer shoppers visiting local retailers
The local retailers and those in the hospitality industry have reported a sharp fall in the number of consumer visits and sales. The Korean Small Business Federation filed a report on 20 February. They stated that 97,6% of small businesses in South Korea have seen sales decline.

This has been since the COVID-19 in the region in mid-January. This drop in sales was mainly due to two factors - fewer shoppers and weaker economic activity on the market.

Lotte Mart is a leading hypermarket retailer in South Korea. On 18 February, they reported that their sales and store visits had decreased. Over the previous 30 days, these fell by 13 and 16% respectively. Some conventional retailers even had to close their stores for a few days.

These needed to be disinfected after infected people visited them. For example, four large stores closed their doors on 22 and 23 February. Included were warehouses and hypermarkets. This closure was after people who were found to be infected with COVIS-19 visited these stores.

Online retailers show high sales growth
Lotte Mart reported solid growth in its food sales section. This is despite the decreased consumer traffic. People opt to eat at home rather than going out. EMART is another South Korean hypermarket retailer.

They, too, reported a sharp increase in foodstuffs sales. Also because people are staying home for meals. EMART reported a 17% growth in the sales of healthy, functional foods over the past 30 days.

Market Curly is a leading online retailer in that country. They specialize in fresh products. On 18 February, they reported that online food sales almost doubled in February. This is because consumers chose to order their goods to be delivered at home. That, while the number of trips to stores has decreased. This is as a result of fear for the COVID-19 virus.

SSG.com is another prominent online retailer in South Korea. They reported that their food sales grew by 98%. This increase was from 20 January to 20 February. Fluctuating orders mean all these large online retailers are having trouble.

They are finding it difficult to deliver within regular time frames. Coupang is the country's number one online retailer. They, for example, are currently only offering a limited number of products for overnight delivery.

Source: USDA report: COVID-19 Impact on Korean Food Retail Market


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