Strategies for Increasing Competitiveness of Korean Apple in Southeast Asian Markets
Authors:   Asia-Europe Perspective Association, Cho Jae-Hwan , Kim Jin-Soo , Lee Han-Sung , Kim Tae-Kyun 
Published: June 2018

Area under cultivation of apple has been growing fast since mid-2000 in Korea and apple price is likely to fall sharply in domestic market in the near future. Exporting apple is considered to be one of the most important strategies to overcome the drop of apple price. Export of Korean apple amounted to 11~18 thousand tons during the late 1980s, but it decreased drastically to 1.3 thousand tons in 2007. On the contrary, apple export of competing countries has been increasing gradually. This paper aims to analyze competitiveness and import demand of Korean apple in southeast Asian markets which are emerging as a target export market of Korean apple. To be more specific, trend of production and export of Korean apple and worldwide apple were examined. For the competitiveness analysis, export price, productivity, and RCA (revealed comparative advantage) of Korean apple were compared with those of competing countries such as China, Australia, and so on. Regression analysis was done to estimate the demand for Korean apple of southeast Asian consumers using FAO statistical data. Finally, policy suggestions were derived based upon the analysis results.
According to the results of this paper, Korean apple has lower export competitiveness in terms of price and productivity compared to other apple-exporting countries to southeast Asian markets. Export price is higher than any other competing countries except Japan while productivity is at a low level. The RCA is smaller than one which means Korean apple does not have comparative advantage among the whole export products from Korea. Moreover, export competitiveness of Korean apple has kept on worsening. Regression analysis results show that exports of Korean apple to southeast Asian markets are critically affected by the export price and exchange rate with the demand elasticities of export price and exchange rate 0.97 and 1.37, respectively. Demand elasticity of expenditure turned out to be 0.43 which means that as one percent of southeast Asian consumers' expenditure increases, 0.43 percent of demand for Korean apple increases. Also, it turned out that export of Korean apple decreases, as the competitiveness of Chinese apple increases.
On the basis of the analysis results, policy suggestion is derived to promote exports of Korean apple to southeast Asian markets. First of all, export price of Korean apple should be lowered whereas quality should be improved. Producers should try to secure the quantity of apple to a certain amount for export, lower the production costs of export apple, and enhance the productivity of apple production through research and development. Korean government need to support distribution costs and other incidental costs to apple exports. For quality improvement, secure quality control system should be established for export apple. Quality should be improved to meet the tastes of importing countries' consumers. Incentives need to be provided to the farmers who produce and export high quality apple. Above this, foreign market developing commission is necessary to promote Korean apple to southeast Asian markets and the buyers. They should maximize their performance through selection and concentration strategy and conduct differentiated promotion according to individual importing country's situation and its consumers' taste. Database also need to be established for buyers of importing country. Apple marketing board consisting of apple export experts is need to be reviewed for specialized apple export. The board should play a role of unified channel of Korean apple export. The board should take charge of entire process from post-harvest to export so that farmers can devote themselves to producing apple.