The British daily the Guardian on the 22nd (local time) spotlighted how cheap Chinese products are pushing out the domestic kimchi market.
According to the Guardian, Korea's structure of importing more kimchi than it exports is becoming entrenched. As Chinese kimchi takes deep root in the domestic market, the trade balance gap with domestically made products is widening.
From January to October this year, Korea's kimchi imports totaled $159.46 million. That was up 3.1% from the same period last year. Exports also increased, but the rise in imports outpaced that, resulting in a trade deficit of $22.07 million. The deficit expanded 10.3% from a year earlier. Due to high inflation, demand has surged for Chinese kimchi, which is priced at less than half that of domestic products.
Restaurants are choosing imported kimchi over domestic products because of the lower price. According to the Guardian, Chinese kimchi is supplied to restaurants at about 1,700 won ($1.15) per kilogram. By contrast, Korean-made kimchi is about 3,600 won ($2.45), more than twice as expensive.
Changes in household composition have also affected how kimchi is consumed. The share of single-person households has more than tripled since 2000, now exceeding 36% of all households. Rather than making kimchi themselves, more people are buying it or consuming it when eating out. The outlet said Korean consumers think kimchi is provided for free at restaurants, so from the perspective of dining businesses, they prefer Chinese products to cut costs.
The structure of the domestic kimchi industry also makes it hard to respond. Seventy-five percent of kimchi manufacturers are small businesses with four or fewer employees. It is difficult to compete on price with Chinese factories equipped with large-scale facilities. Over the past 10 years, countless companies have not been able to make proper facility investments. Some of the remaining companies, pushed by the onslaught of imports, have even scrapped plans to build second factories.
A spike in cabbage prices due to the climate crisis has added to the burden. As cultivating highland cabbage in the summer has become more difficult, wholesale prices have often more than doubled in a year. The government has begun developing climate-resilient varieties and improving storage systems, but the industry questions their effectiveness.
The government and related groups are busy drawing up measures. The Ministry of Agriculture, Food and Rural Affairs said it will strengthen the export base and expand the voluntary labeling system for domestic kimchi to ensure the industry's sustainable growth. The Korea Kimchi Association is running a voucher program that provides 1,280 won per kilogram when restaurants switch to domestic kimchi. The Korea Customs Service is pushing to include imported price declarations in pre-tax assessments to strictly manage declared import prices.
Citing the head of a kimchi factory, the Guardian said, "Korean kimchi has made its unique taste and quality the last line of defense, but as the Chinese offensive armed with price competitiveness intensifies, the kimchi industry ecosystem of the country of origin stands at a critical crossroads."