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Specter of 'heatflation' grips Korea
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By Lee Kyung-min
Scorching summer heat-induced price hikes of fresh food and agricultural produce are expected to accelerate heatflation, a portmanteau of heat and inflation, market watchers said Thursday.
The most pronounced will be price hikes of kimchi, a Korean staple, as well as meat, fruit and vegetables. The cost of dining out will subsequently rise.
Weather-induced supply shocks can push up fresh food prices, straining the lives of many in the form of an elevated cost of living, a survey by the Bank of Korea showed.
According to the Korea Agro-Fisheries & Food Trade Corp. (aT), one cabbage retailed for 5,515 won ($3.99), up over 30 percent from the previous month. It jumped 7.2 percent from a year earlier.
A radish traded at 3,030 won, up nearly 30 percent from a month earlier and a 15.9 percent jump from last year.
Watermelon, a popular summer fruit, wholesaled at 27,230 won in the first week of August, up 51.4 percent from the seasonal average.
Observers say overall crop output this year will be lower and of poor quality, crippled by bouts of heavy rains and unusually high temperatures.
The Korea Meteorological Administration says tropical nights, whereby overnight temperatures remain above 25 degrees Celsius from 7 p.m. to 9 a.m. the following morning, will continue long after National Liberation Day on Aug. 15.
Data from the Potsdam Institute for Climate Impact Research showed global warming and scorching heat will translate to prices of food and overall goods climbing by up to 3.2 percentage points and 1.2 percentage points every year respectively through 2035.