Government allows unlimited tariff-free imports of key products until 30 June in bid to stabilise fruit prices after domestic supply shortages


The tax exemption on imports of bananas and other fruits is aimed at lowering prices to consumers 

The Korean government stepped up measures to tackle the nation’s soaring prices of fresh fruit earlier this month by extending tax exemption for imported fruits.

From 4 April to 30 June, the government is allowing duty-free imports of a range of fresh fruits, with no limits on volumes. The tax exemption applies to bananas, pineapples, mangoes, grapefruit, and avocados.

Between 19 January and 31 March, the government allowed tariff-free imports of these products, but under set quotas which were allocated to importers. Bananas were given the largest tariff-free quota at 90,000 tonnes, followed by pineapples (24,000 tonnes), mangoes (8,400 tonnes), grapefruit (4,800 tonnes) and avocados (1,000 tonnes).

Now, with no limits on tariff-free imports of these products, volumes are expected to increase significantly, particularly for bananas, pineapples and mangoes.

Retailers discount fruit under rebate scheme

In addition to suspending import duties, the government has introduced subsidy schemes with major supermarket retailers and their fruit importers to try and bring down consumer prices.

“The government has asked us to make the delivery price to retailers 20 per cent lower than the normal price for bananas and oranges, and 10 per cent lower for nine other imported fruits,” one leading fruit importer told Asiafruit Magazine. “They will later give us rebates of 20 per cent and 10 per cent [according to product] after confirming with the retailer that the discount has been passed on to them.”

The government has put in place volume limits for each fruit import product under the rebate scheme, and these apply between 20 March and 30 June. Quotas have been allocated to Korea’s three biggest supermarket retailers, Emart, Homeplus and Lotte, which then allocate volumes to their vendors after submitting their sales programmes to the government. The government is also now reportedly considering extending the scheme to medium-sized supermarket chains. 

While the government has provided tax subsidy schemes to bring down prices of domestically grown fresh produce and food in the past, such measures for imported fruit are unprecedented, according to key market sources.

Soaring domestic produce prices

The moves come in response to a surge in domestic fresh produce prices in Korea, which have driven food price inflation and became a major policy issue in the nation’s recent elections.

Domestic fresh fruit supplies have been hit by poor weather, such as torrential rains, leading to price hikes for key products. According to one market source, the wholesale price of Korean apples has soared to around US$68 per carton in 2024, more than double the average levels of US$30 in 2023. Jeju mandarin prices have also jumped to around US$12 per 5kg carton, up from US$7 per carton in 2023.

Banana, pineapple and mango imports set to surge

It remains to be seen what impact the tax exemption and subsidy schemes will have on the fruit market and consumer demand over the coming months.

“I think the market will be very active and we’ll see a big increase in arrival volumes by the end of June, especially for bananas, pineapples and mangoes, similar to what we saw during the first quota-tariff period,” said June Choi, executive managing director of major fruit importer Soo Il Commerce.

Banana and pineapple imports are mostly sourced from the Philippines, and Choi noted that these shipments are usually subject to a 30 per cent duty as the Philippines does not have a free trade agreement (FTA) with Korea.

 Thai mangoes usually face a 24 per cent duty even though there is an FTA between Korea and ASEAN. Thai mango volumes have “surged dramatically” in recent months since the tariff-free quota was implemented in January, according to Choi.

“In terms of short-term negative impact, we’re seeing this on pineapples, as volumes are up by around 45 per cent of a normal year so far. Prices are below net-profit levels for importers due to continued oversupply since late March, but bananas and mangoes are still going well as of mid-April.

“Pineapples are more dependent on the food service sector, and they’re not as widely consumed as bananas or mangoes, so this helps to explain why there is an oversupply.”


June Choi of major Korean fruit importer, Soo Il Commerce

Less impact for citrus

While the government is also allowing tariff-free imports of grapefruit between 4 April and 30 June, Choi said other factors could constrain the volumes. 

“Grapefruit imports are switching to South Africa at this time of year, and volumes are highly dependent on quarantine inspection results, which are performed in South African ports by the Korean quarantine inspector,” said Choi.

“The tariff-free imports end on 30 June, which is fairly early in the South African season, and it’s tougher to get approval from quarantine inspectors in the early stage of the season.

“Having said that, I expect much higher volumes to come in compared to previous years while there is zero-tariff then things will calm down with the July and August arrivals.”

Turning to oranges, Korea allowed 5,000 tonnes to be imported under a 10 per cent tariff between 19 January and 31 March. The quota was quickly exhausted with US oranges, which usually face a 50 per cent tariff until the end of February. There is no duty on US oranges after 1 March under the KORUS FTA, and import supply is now switching over to Australian oranges, which are also duty-free under Australia’s FTA with Korea.

Avocado imports are unlikely to be impacted by the zero duty, according to Choi. “The Peruvian season has now started, and Mexico is no longer [a supply] option for Korea this year due to end-of-season quality issues – there is no duty on Peruvian avocados under the FTA.”

Will zero tariffs lift demand?

Danny Guo, general manager of trade at JWM Asia, which recently opened an office in Korea, said the temporary tax exemption presented “a complex situation”.

“The actions from the government are with good intentions, but the precise impact remains uncertain,” said Guo.

“We can see it attracting more volume since the tax emption results in a more competitive landed cost. However, economic indicators and market dynamics will play a crucial role in in determining the outcomes.”

“Our client base generally advised that the temporary measures may not necessarily lead to increased demand from consumers.

“Also, there is a concern that fruit arriving in the market may be more variable in quality, which could lead to some market pressure.”

Importers noted that one of the key hurdles to growing sales is the poor economic situation in Korea. In this climate, the temporary tax exemption does not necessarily translate into increased demand.

“In summary, while the tax emption stimulates activity, balancing volume, quality, and economic conditions remains critical,” said Guo. “The market’s response post-exemption will provide valuable insights”.