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Food Prices in Korea on the Rise

Posted November. 23, 2007 04:01,   


Surging international grain and oil prices and a stunted harvest caused by climate change have boosted food prices, including prices of vegetables and processed foods.

The price of vegetables, including cabbage, has doubled or tripled recently. Domestic food and beverage makers are increasing prices of instant noodles, snacks and ice cream as well.

Rising food prices are making it hard for common people to make ends meet.

Skyrocketing vegetable prices-

The Korea Agro-Fisheries Trade Corporation investigated 25 discount stores and markets in eight major cities like Seoul and Busan on November 22. The corporation said cabbage prices have risen to 1,900-4,100 won. The same cabbages cost 700-1,900 won at this time last year. The average price of a head of cabbage was 3,134 won on November 21, 2.7 times higher than it was on the same day last year (1,149 won).

Stunted vegetable growth because of continuous rain from summer to early fall has raised prices.

In particular, prices of facility crops like cucumbers, tomatoes, green chillies, and pumpkins which are grown in greenhouses are expected to rise further in the aftermath of high oil prices.

The price of light oil (duty-free oil), which is used by roughly 80 percent of domestic-facility crop growers, soared to 742 won per liter, from 595 won, on November 1, 2007; an increase of 24.7 percent year-on-year.

The spot price of Dubai oil hit a new record high of $89.69 per barrel on November 21, $2.29 up from the previous day. The price of West Texas Intermediate (WTI) also surged to $99.29 on November 20.

Surging grain prices boost processed food prices-

The world’s grain price index released by the Korea Rural Economic Institute shows that the price of wheat futures traded on the Kansas City Board of Trade on November 14 rose 49 percent to $284 per ton compared to last year.

The U.S. Department of Agriculture predicted the world’s stocks of rice, corn, wheat and barley will hit record lows and that rising prices will continue into next year.

CJ, a Korean food manufacturer, raised the price of flour products 13-15% overall in September after raising them 7-10% in December of last year. The prices of Nongshim Shinramyeon, Samyang Ramyeon, and Ottogi Jinramyeon are rising and major ice cream makers have followed suit, raising ice cream prices 30-40% since September.

imsoo@donga.com higgledy@donga.com