Food Prices in Asia Including Korea to Rise Further in Second Half... Peak in Q3

Flour is displayed at a large supermarket in Seoul. Photo by Jinhyung Kang aymsdream@

[Asia Economy Reporter Lee Chun-hee] Despite the global surge in food prices entering a stabilization phase, Asian countries such as South Korea, Singapore, and India are expected to see significant food price increases in the second half of this year.

According to CNBC on the 11th (local time), Sonal Varma, Nomura Securities' Chief Economist for India and Asia, stated that governments in Asian countries tend to lag behind global trends by providing subsidies and controlling prices to keep food prices low. She forecasted that "Asian food prices will reach their peak in the third quarter of this year."

Although global food prices, which soared after Russia's invasion of Ukraine, have declined for three consecutive months recently, entering a stabilization phase, price-increasing factors remain. In some Asian countries with high dependence on imported food, food price hikes are considered inevitable.

Varma pointed out that South Korea and Singapore have high dependence on food imports, while India is self-sufficient in wheat and rice but faces factors such as heatwaves and ongoing increases in other food prices that will raise food prices going forward. She emphasized the importance of "protecting low-income households that spend a large portion of their expenses on food" in these countries.

According to the United Nations Food and Agriculture Organization (FAO), although global food prices continued to decline in the second quarter, prices remain around the historic peak levels seen in March. Last month, the FAO Food Price Index fell 2.3% month-on-month due to price drops in vegetable oils, grains, and sugar, but it still remained 23.1% higher compared to the same month last year. The FAO forecasted that despite the global food price decline last month, price-increasing factors such as Russia's invasion of Ukraine still exist, so food prices are unlikely to drop significantly even over time.

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