Rising Tangerine Prices Make Mouths Water... Fresh Food Index Sees Largest Increase in 32 Years (Comprehensive)

Statistics Korea February Consumer Price Trends Announced
Consumer Prices Re-enter 3% Range Due to High Agricultural Product Prices
Fresh Fruits Up 41%... Tangerines 78.1%, Apples 71.0% Increase
Choi Sang-mok "Prices Should Fall Again if Raw Material Costs Drop"

A customer visiting Hanaro Mart Yangjae Branch in Seocho-gu, Seoul is looking at tangerines. Photo by Jinhyung Kang aymsdream@

As agricultural product prices continue to soar and international oil prices rise simultaneously, consumer prices climbed back into the 3% range last month. The worsening weather conditions have kept vegetable prices on an upward trend. In particular, fresh fruits rose by 41.2% compared to the previous year, marking the largest increase in 32 years and 5 months.

According to the 'February Consumer Price Trends' released by Statistics Korea on the 6th, consumer prices last month increased by 3.1% compared to the same month last year. After maintaining the 3% range for five consecutive months since August last year (3.4%), prices fell to 2.8% in January but re-entered the 3% range last month.

The rise in consumer prices back into the 3% range was largely influenced by a 11.4% increase in agricultural, livestock, and fishery products. In particular, agricultural products rose 20.9% compared to the same month last year, pushing the overall price level up by 0.8 percentage points. This is the highest increase since January 2011 (24%). By item, prices of tangerines (78.1%), apples (71.0%), and pears (61.1%) surged significantly. Gong Mi-sook, Director of Economic Trend Statistics at Statistics Korea, explained, “The decrease in open-field tangerine shipments in February, along with increased demand for fruits similar to last month, contributed to this rise.”

The fresh food index skyrocketed by 20.0% compared to the same month last year. The fresh food index reflects the prices of 55 items such as fish, seafood, vegetables, and fruits, which are highly sensitive to weather conditions and seasons. This is the largest increase in 3 years and 5 months since September 2020 (20.2%). Fresh fruits, excluding almonds, rose by 41.2%, the highest in 32 years and 5 months since September 1991 (43.9%). Fresh vegetables also increased by 12.3%, marking the largest rise in 12 months since March last year (13.9%). Director Gong noted, “There was a base effect due to good harvests last year, which had kept fruit prices low.”

The rise in international oil prices, which began in mid-January, was reflected with a time lag and affected consumer prices. The decline in petroleum product prices narrowed to -1.5% from -5.0% the previous month. The contribution of petroleum products to overall prices also decreased from -0.21 percentage points in January to -0.06 percentage points. International oil prices have become volatile recently due to instability in the Middle East and the voluntary production cut extension by OPEC+?a coalition of the Organization of the Petroleum Exporting Countries (OPEC) and major oil-producing countries. The average price of Dubai crude was $80.9 in February and $81.6 as of March 4. Electricity, gas, and water prices also rose by 4.9%, with electricity fees up 4.3%, city gas 5.6%, district heating fees 12.1%, and water charges 2.7%. Service prices increased by 2.5% compared to the same month last year.

The core inflation index, which excludes agricultural products and petroleum products to identify long-term trends excluding seasonal or temporary shocks, rose 2.6% compared to a year ago, unchanged from the previous month. The OECD-based core inflation indicator, the food and energy-excluded index, increased by 2.5% year-on-year, also unchanged from the previous month. The living cost index, composed of frequently purchased and high-expenditure items, rose by 3.7%.

Choi Sang-mok: "We will do our utmost to quickly stabilize inflation in the 2% range"

The government continues to maintain an all-out inter-ministerial response system to stabilize inflation in the 2% range. On this day, Choi Sang-mok, Deputy Prime Minister and Minister of Economy and Finance, held a price-related ministers' meeting at the Government Seoul Office and said, "We take the recent inflation situation seriously and will do our utmost to quickly stabilize inflation in the 2% range." He added, "We will invest a record-high 60 billion won in discounts for agricultural, livestock, and fishery products in March and April to reduce the perceived prices of major food items such as apples and pears by up to 40-50%." Furthermore, the Korea Agro-Fisheries & Food Trade Corporation (aT) will directly import major fruits such as oranges and bananas to supply them at affordable prices, and additional tariff reductions will be applied to three types of imported fruits. Starting today, an emergency supply and demand stabilization task force will be immediately activated to monitor daily trends by item.

Efforts will also be made to crack down on petroleum and service prices. Deputy Prime Minister Choi stated, "For unstable items such as petroleum and services, each ministry will conduct on-site inspections to spread a price stabilization atmosphere." He added, "The inter-ministerial petroleum market inspection team visits gas stations nationwide every week to check prices to prevent illegal or opportunistic price hikes in petroleum products. Regarding academy fees, strict measures such as fines will be imposed if local governments' tuition adjustment standards are violated."

He urged companies to actively participate in price stabilization. Deputy Prime Minister Choi pointed out, "There are criticisms that even though international grain prices have fallen, food prices have not properly reflected this, causing inflation. If prices were raised due to rising raw material costs, then when raw material prices fall, prices should be lowered accordingly and promptly. This is a reasonable business practice that the public can accept."

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