"Only the Common People's Wallets Get Thinner"... Uncontrolled Global 'Bapsang Inflation'

Last Year, 'Table Food Prices' Rose 5.9%
Supply Chain Disruptions and International Crises Drive Prices Up
"Meat Has Become Pricier Than Gold," Citizens Sigh Ahead of Holidays
US Launches 'Breakfast ETF' as Well

On the afternoon of the 23rd, ahead of the Lunar New Year holiday, citizens are purchasing ritual items at the Cheongnyangni Fruit and Vegetable Market in Dongdaemun-gu, Seoul. / Photo by Yonhap News

[Asia Economy Reporter Lim Juhyung] As concerns over a global supply crisis deepen due to production disruptions caused by the spread of COVID-19 and international geopolitical tensions, prices are soaring. In particular, so-called 'table prices' such as grains and meat, which greatly affect the economic sentiment of ordinary people, continue to rise sharply. The hardships faced by ordinary citizens shopping for food ahead of the Seollal holiday are increasing.

Inflation has already risen sharply enough to threaten economic growth in major countries. As of December last year, the U.S. Consumer Price Index (CPI) surged by 7%, marking the highest level in nearly 40 years, while the CPI in the Eurozone, the euro-using region within the European Union (EU), and the United Kingdom also exceeded 5%.

Global companies are also concerned that rising prices could threaten economic recovery this year. According to a management outlook report released on the 13th (local time) by the U.S. nonprofit economic research organization 'The Conference Board,' which surveyed 917 global CEOs, business leaders ranked inflation as the second biggest 'risk factor this year' following COVID-19.

The main cause of rising prices is supply disruptions. Since the COVID-19 pandemic that shook the world in 2020, many countries implemented social distancing and strict lockdowns as preventive measures, which disrupted factory production and logistics movement, weakening supply chains. The liquidity supply implemented by central banks worldwide to support governments from imminent economic crises has also been pointed out as a cause of inflation by fueling asset price increases.

On the 24th (local time), military vehicles were being transported to Belarus for joint exercises in a region of Russia. / Photo by Yonhap News

Geopolitical crises in Eastern Europe are also exacerbating the price crisis. Recently, as Russia and Ukraine, the world's largest raw material exporters, have been embroiled in conflict, concerns are growing that prices of several items such as copper, aluminum, natural gas, and wheat could skyrocket.

South Korea is not immune to this crisis. South Korea's average CPI last year was 2.2%, which is lower compared to countries like the U.S. and Europe. However, the inflation rate for 'food and non-alcoholic beverages,' which directly affects citizens' daily lives, recorded 5.9%, ranking among the highest among OECD member countries alongside Turkey (24.3%) and Mexico (7.2%).

Essential items like food and beverages are difficult to cut back on spending. Price increases in such items particularly impact ordinary people. Citizens shopping for groceries during this year's Seollal holiday also voiced hardships caused by rising prices.

A housewife in her 50s living in Gyeonggi Province, Ms. A, said, "Usually, meat and vegetable prices rise during holidays, but this year it feels like they have increased much more than before," adding, "Pork has become as expensive as gold, and beef is completely out of reach."

Freelancer Mr. B (28) said, "To save on living expenses while living alone, I cook by purchasing ingredients myself rather than eating out, and I have definitely felt prices rise since the end of last year," adding, "But I can't reduce my food expenses, so it's a big concern. It feels like only my wallet is getting thinner."

The rise in prices of groceries and non-alcoholic beverages makes it difficult to reduce spending, significantly affecting the economic sentiment of ordinary people. / Photo by Yonhap News

College student Mr. C in his 20s said, "Even at convenience stores, the prices of lunch boxes and coffee I used to enjoy have gone up by at least 200 to 300 won," adding, "Items that usually cost 2,000 to 3,000 won have suddenly increased by about 10%. For a college student, foods that were affordable to solve meals have now become a burden."

As food price volatility increases, a somewhat ironic phenomenon has emerged where people are treating food as an investment asset. According to U.S. financial media 'Bloomberg' on the 20th, the U.S. asset management company 'Direxion' recently applied to the Securities and Exchange Commission (SEC) for approval of a so-called 'Breakfast ETF.'

The Breakfast ETF is an investment product that tracks the futures prices of coffee beans, orange juice, wheat, and pork. In other words, it aims to generate profits by investing in items commonly found on Americans' breakfast tables such as coffee, juice, toast, and bacon.

Breakfasts favored by Americans typically consist of eggs, bacon, toast, and orange juice. Investment products tracking the prices of such items are even being conceived. / Photo by Wikipedia Capture

Meanwhile, the government announced that it will make every effort to stabilize prices during the Seollal holiday. Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, said on the afternoon of the 26th during a visit to a market in Bucheon, Gyeonggi Province, "We have announced measures to stabilize livelihoods during Seollal."

Since the 6th, the government has supplied a record-high 204,000 tons of major holiday items such as pork, cabbage, radish, and beef. Regarding this, Deputy Prime Minister Hong said, "Prices of 15 out of 17 items, including 16 major holiday items and rice, are falling. The daily price survey index for major items by Statistics Korea has also dropped by 1.1% compared to the survey start date on the 10th, indicating a gradual stabilization," adding, "We will actively expand supply volumes during the remaining period," and emphasized, "We plan to work to ensure that living prices shift to a stable trend."

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