Prices of Green Onions, Chili Peppers, and Garlic Soar... Even Flour Prices 'Stirring'

Amid the economic downturn caused by COVID-19, the livelihood economy has suffered a severe blow, and with inflation continuing, the cost of food has also been in a state of emergency day after day. According to Statistics Korea on February 25, the consumer price index in January increased slightly by 0.6% compared to the same period last year, but agricultural, livestock, and fishery products surged by 10%. The photo shows citizens shopping at a large supermarket in Seoul on the same day. Photo by Kim Hyun-min kimhyun81@

[Asia Economy Reporter Seungjin Lee] Due to last year's record-long rainy season causing poor crop yields, prices of major food ingredients have skyrocketed. On top of this, with international grain prices also rising, the possibility of flour price increases has grown, raising alarms about consumer prices.

According to the Korea Agro-Fisheries & Food Trade Corporation (aT) on the 3rd, the retail price of 1 kg of green onions rose 220% compared to the previous year, reaching 6,350 won. With prices soaring more than threefold, restaurants selling pork belly have stopped serving green onion salad, and among consumers, the so-called 'Patech (Pa + Jaetech)'?a pun combining green onion and financial technology?has become a trend.

Prices of other major food ingredients have also risen sharply due to poor crop yields. The retail price of 600g of dried chili peppers (hwageon), used in gochujang and chili powder, is about 21,800 won, a 73.9% increase from the previous year. The price of dried chili peppers has surged significantly since the end of last year and has maintained record-high levels for half a year. As a result, seasoning manufacturers, including those producing gochujang, raised their product prices simultaneously last month, unable to withstand the rise in raw material costs.

Additionally, prices of rice, onions, garlic, as well as apples and pears?ingredients commonly consumed in Korean diets?are all being distributed at prices at least 50% higher than the previous year.

Furthermore, recent sharp increases in international wheat prices have intensified pressure to raise flour prices. According to the Chicago Mercantile Exchange, the average wheat price per ton last month was $234, the highest since May 2014.

This is due to disrupted logistics caused by the COVID-19 pandemic and poor crop yields in the United States, one of the world's largest wheat producers, due to an unusual cold wave. Additionally, Russia, a major producer, imposed export taxes on wheat citing food security concerns. With wheat prices rising daily, discussions about flour price increases are ongoing in the milling industry. Daehan Flour Mills, which produces Gomppyo flour, is currently reviewing a possible price increase.

With food prices rising daily since the beginning of the year, the increase in flour prices could directly impact consumer price inflation. Following consecutive price hikes in January for tofu, bean sprouts, and canned side dishes, and a surge in egg prices due to avian influenza (AI), the baking and hamburger franchise industries have also implemented price increases.

Industry leader CJ CheilJedang has set an internal policy to maintain flour prices as much as possible. A CJ CheilJedang official stated, "There are many reasons to raise prices, but no related discussions are currently underway," adding, "We are well aware of the impact flour prices have on inflation, so there will be no price increases for the time being."

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