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Korean orchid sector fears bankruptcies from antigraft law

Dan Myeong-hak, 55, has cultivated orchids for more than 30 years in Yangju, Gyeonggi. He sighs whenever he sees the 3,970-square-meter (0.98-acre) greenhouse. November and December are usually peak seasons for orchid farms, as public and private companies in Korea make human resources decisions during that period. Orchids have traditionally been the most popular item to celebrate promotions. But it seems the usual won’t apply this year due to the Kim Young-ran Act that went into effect in September.

“Orchid prices were cut in half after the law enacted, but wholesale merchants still aren’t buying,” he said.

A 45-year-old man surnamed Kim who works at a public office in Seoul was promoted to team leader this month. The task that has kept him occupied since then was returning orchids delivered as celebration gifts. “The law says that gifts under 100,000 won ($83) are fine, but I don’t feel comfortable keeping them and the company doesn’t seem too keen either,” he said. “I’ve already told close acquaintances not to send them.”

Orchid farmers and merchants are expressing deep concerns as the market rapidly shrinks in the aftermath of the so-called antigraft law. Sales saw a steep decline after flowers were included in the list of congratulatory gifts limited to 100,000 won. The orchid auctions - the main channel farmers sell products to wholesale dealers - were immediately hit. On Dec. 14, Korea Agro-Fisheries & Food Trade Corporation (aT) said it would reduce orchid auctions from twice to once a week.

The number of orchids sold at auctions saw a steep fall: From Sept. 28 to last month, 40,000 pots were sold during Thursday’s auctions, down 51 percent from last year. The average price per pot declined from 5,081 won to 3,346 won. The real problem is that the decrease in sales is not a temporary one, but the start of a longer depression in the market. “About 85 percent of sales for orchids are gift purposes, so the new law’s effect on the market is expected to last longer compared to other flowers,” said Noh Yoon-hee, a director at aT.

Read more at the Korea JoongAng Daily

Publication date: 1/3/2017



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