Value context and insight. lkm@koreatimes.co.kr
Apple prices rise to record high, pulling up fresh food inflation
Apples are displayed at a retail outlet in Seoul, Wednesday. Yonhap
By Lee Kyung-min
Apple prices have more than doubled over the past year, becoming a major culprit of inflation led by fresh food price hikes.
The spikes will likely continue throughout the year despite diverse government measures announced so far, because they are insufficient to increase supply.
According to the Korea Agro-Fisheries & Food Trade Corp. (aT), the wholesale price of 10 kilograms of apples came to an all-time high of 91,700 won, Tuesday, up 123.3 percent from 41,060 won a year ago.
The figure first exceeded 80,000 won in December and surged further to over 90,000 won on Jan. 17. With small falls and rises, it has since been hovering around the 90,000 won level.
The price surge resulted from a supply-side shock whereby the production of apples, one of the most-sought-after fruits in Korea, was slashed 30 percent last year. Many apples were damaged due to harsh abnormal climate events such as heavy rainfall and heat waves, followed by fruit pests and diseases.
The apple fiasco is affecting other fruits, with overall fruit prices rising 40.6 percent last month compared to a year before, which was the highest rise since September 1991 when the figure came to 43.7 percent, according to Statistics Korea data. It was a notably higher figure than headline inflation that gained 3.1 percent year-on-year in February. The gap between the two rates of prices was the widest since January 1985.
Market watchers expected the spiking prices of apples and other fruit to continue throughout the year, despite 23 billion won in government spending planned for March and April to provide discounts of up to 40 percent on popular fruit. Also implemented will be easing of tariff rate quotas for mandarin oranges and durians in addition to bananas, oranges and pineapples.
Prices of other fresh produce are also rising to record highs. According to Numbeo, a database platform on the world’s cost of living, Korea ranked as the world's most expensive not only in the category of apples but also in potatoes and bananas. It ranked second in terms of onions.
The skyrocketing fresh produce prices add to Korea’s concerns over sticky inflation.
The country’s headline inflation jumped back above 3 percent in February, only a month after January’s 2.8 percent. It had remained above 3 percent for five months since August.