Anna Jiwon Park has been covering the politics at The Korea Times since the summer of 2024, when she joined the press pool for the Office of the President in Korea. Prior to that, she spent about five years reporting extensively on financial markets, regulatory authorities and the financial industry. She joined The Korea Times in 2019 after spending eight years as a broadcast journalist at Arirang TV, Korea’s leading global broadcaster, covering politics, defense and culture.
Concerns over 'agflation' grow amid groceries price hike
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By Anna J. Park
By Anna J. Park
Amid global inflation concerns, groceries are a major category in which consumers feel big price rises. A combination of global supply chain disruptions, global harvest depressions due to climate change as well as the pandemic-led ample liquidity all worked together to stoke the prices of groceries.
According to data compiled by Statistics Korea, the consumer price index for both processed foods and livestock products, such as pork, beef and eggs, have significantly risen by 3.1 percent and 13.3 percent compared to the same month last year, respectively.
The rise is the biggest since late 2014. The price increase of processed food products is mainly attributed to the price hike of raw materials, like wheat flour and palm oil. Officials from Statistics Korea explained that local food companies' price increases conducted in previous months have begun to be reflected in the index from October.
The price level of groceries in the country are expected to soar further as global grain prices continue to rise.
In October, the Food and Agriculture Organization's (FAO) food price index ― which tracks international food commodities prices each month ― surged to its highest level since 2011. The global food price index rose by 3 percent from the previous month and it was the third-consecutive month of increases. Compared to the same month last year, it was a whopping 31.3 percent increase.
“Tighter availability in global markets due to reduced harvests in major exporters, especially Canada, the Russian Federation and the United States of America, continued to put upward pressure on prices,” an FAO report stated.
The rise in global food prices will in turn affect the local market in the end, raising concerns over “agflation” ― a rise in agricultural food product prices ― in the country. As a major importer of grains ― Korea is the world's seventh largest ― the local grocery market is particularly susceptible to global price changes.
“When the price of imported grain goes up by 10 percent, its accompanying effect is a hike of the consumer price index by 0.39 percent,” said Kim Jong-in, researcher at Korea Rural Economic Institute, adding that maintaining a stable price for crops contributes to the stabilization of prices for domestic consumer products.