Vegetables, Meat, and Processed Foods All Increased... Food Prices Surge Ahead of Chuseok

Vegetable and Fruit Prices Surge Due to Monsoon, Heatwave, and Typhoon Challenges
Instant Rice, Snacks, and Ice Cream Processed Foods Also Fluctuate
Government and Companies Strive for Supply Stability Ahead of Chuseok

[Asia Economy Reporters Seon-ae Lee and Seung-jin Lee] Following the sharp rise in vegetable prices due to the longest rainy season, heatwaves, and typhoons, prices of processed foods such as instant rice and snacks have also increased, triggering alarm bells for dining table prices. With vegetable and fruit prices expected to rise further due to consecutive typhoons, processed food companies are also reflecting raw material cost increases, raising concerns about a price crisis ahead of Chuseok.

Vegetables and Fruits Worth Their Weight in Gold

Vegetable and fruit prices, already dubbed ‘gold cabbage’ and ‘gold apple,’ are expected to rise further ahead of Chuseok. According to the Korea Agro-Fisheries & Food Trade Corporation (aT) on the 8th, the price of one head of cabbage was 9,657 won as of the 7th, up 3.3% from the previous day, but compared to one month and one year ago, it surged by 56.7% and 97.5%, respectively. The price of one head of cabbage was 4,783 won, up 2.7% from the previous day, and increased by 2.7% and 35.8% compared to one month and one year ago, respectively. The price of 1kg of green onions was 10,665 won, soaring 80.6% and 101.8% compared to one month and one year ago, respectively.

The price of 1kg of spinach was 15,344 won, slightly up 0.3% and 0.4% compared to the previous day and one month ago, but surged 22.3% compared to one year ago. The prices of 1kg of onions and tomatoes were 2,145 won and 5,531 won, respectively, up 6.8% and 3.3% from a year ago. The price of 10 apples was 30,321 won, up 21.7% from a year ago, and 2kg of grapes was 17,539 won, up 27.1% from the previous year.

According to the ‘August Consumer Price Trends’ released by Statistics Korea, prices of agricultural, livestock, and fishery products rose 10.6% year-on-year. In particular, vegetable prices surged 28.5%, pushing agricultural product prices up 12.1%. Experts expect consumer prices in September to continue rising. The damage to crops caused by Typhoon Maysak reached 19,926 hectares, and additional damage is feared due to Typhoon Haishen, the 10th typhoon.

Prices of Korean beef (Hanwoo) and chicken are also showing signs of increase. The Korea Rural Economic Institute predicts that the average wholesale price of Hanwoo (1kg) from September to November this year will be 19,500 won, up to 6.2% compared to the same period last year. Especially, the average wholesale price of Hanwoo is expected to be around 20,000 won by September 29, the peak season for Chuseok, about 10% higher than the same period last year (18,280 won). The price of outsourced livestock in September is forecasted to increase 2.6% year-on-year to 1,340 won per kilogram.

Processed Foods Such as Instant Rice and Snacks on the Rise

Processed foods are also on the rise. Ottogi raised the price of instant rice (based on shipment price) by 8% starting from the 1st of this month. The price of ‘Ottogi Rice’ (210g), previously 710 won, increased to 770 won. This is Ottogi’s first price increase for instant rice in about three years since November 2017. Ottogi explained, “Rice prices have risen by about 10-20% every year, making the price increase unavoidable.”

Prices of snacks and ice cream have also increased. Lotte Confectionery raised the prices of throat candies and Chaltteok Pie by an average of 10.8% this month. The price of throat candies in small boxes rose from 800 won to 1,000 won, a 200 won (25%) increase. Instead of raising the price of Chaltteok Pie, the quantity was reduced. The 6-pack decreased from 225g to 210g, and the 10-pack from 375g to 350g. Lotte Confectionery also raised the price of its ice cream brand ‘Natuur’ by an average of 10.5%. Lotte Confectionery explained, “The price adjustment is due to worsening business conditions caused by increases in various raw material costs, labor costs, and promotional expenses.”

An industry insider said, “Due to the impact of COVID-19 and the burdens from the rainy season and typhoons, raw material costs are significant, and price adjustments for processed foods will continue.”

Government and Large Retailers Make All-Out Efforts to Stabilize Supply

The government plans to ensure supply stabilization through government stockpiles, stockpiles at shipment control facilities, and operation of the vegetable price stabilization system. They expressed hope that agricultural product prices will stabilize to some extent by late September, just before Chuseok, if no additional disasters occur.

Distribution companies are also actively responding. Major large retailers are focusing on securing additional production areas for vegetables and fruits to stabilize supply.

Emart increased its sweet potato production areas from one in Gochang, Jeonbuk, to two by adding Gimje last week. Due to the rainy season and consecutive typhoons, the sweet potato harvest in Gochang dropped sharply by 30%, making it difficult to meet the increasing demand until Chuseok with only one production area. Emart plans to purchase sweet potatoes from both production areas, store them in fresh warehouses, and sell them until Chuseok. Last week, 30 tons of sweet potatoes harvested in Gimje were first sold nationwide at Emart stores, and about 60 tons more will be added soon.

They are also focusing on securing supply of apples, a representative fruit for Chuseok. Lotte Mart judged that supply would be insufficient with existing production areas due to recent consecutive flood damages and is securing additional production areas. Besides existing areas in Yeongju and Mungyeong, Gyeongbuk, and Chungju, Chungbuk, they have secured apple supplies from Pohang, Gyeongbuk.

Additionally, Lotte Mart is using a ‘full-set purchase’ method, which means buying large quantities harvested from one production area at a low price without sorting by grade. A Lotte Mart official said, “Ahead of Chuseok, we increased the proportion of full-set purchases of apples and pears by about 10% compared to previous years,” and “We are purchasing the entire harvest in consultation with farmers affected by heavy rain.”

Large retailers expect these measures to contribute to stabilizing dining table prices for Chuseok to some extent. A large retailer official said, “As prices of major vegetables soared due to the longest rainy season in history, we quickly responded and secured large quantities,” and “Although additional price increases are feared due to typhoon damage, we have sufficient stock in warehouses to supply at stable prices until Chuseok.”

This content was produced with the assistance of AI translation services.