Inflation feared to surge over heat wave-driven price hikes in fresh foods

Rice paddies in Seogwipo, Jeju Island, are cracked and dry due to a drought caused by the blistering heat, Tuesday. Yonhap

Scorching heat has been disrupting yields of agricultural and fisheries products in recent weeks, fueling concerns over higher consumer inflation in the coming months, according to economists on Tuesday.

They say a long-term strategy is essential for the government to curb the prices of temperature-sensitive foods, noting they make up a significant part of people’s grocery budgets, while heat waves are becoming more frequent, more intense and longer-lasting.

According to the Korea Agro-Fisheries & Food Trade Corporation, the retail price for a bundle of 10 cucumbers averaged 11,914 won ($8.70), Monday.

The price marked a 27 percent increase from a year earlier and a 30.5 percent rise compared to a multi-year average, as the heat wave pushed daily temperatures to 37 degrees Celsius in some regions.

Napa cabbages, radishes and other vegetables are piled up at a supermarket in Seoul, June 29. Yonhap

Also as of Monday, perilla leaves were priced at 2,502 won, up 20.9 percent from the previous year and 25.3 percent higher than the average price for the past few years.

Green chili peppers rung up at 1,671 won per 100 grams, jumping 6.8 percent year-on-year and 18.0 percent compared to the multi-year average.

Concerning seafood, a bundle of two mackerel was priced at 6,674 won, a 33.5 percent increase from a year ago and a 68.5 percent surge from the average price for the past couple of years.

The price of frozen squid reached 4,862 won, up 25.7 percent year-on-year and 24.4 percent compared to the multi-year average.

A shopper looks at packaged seafood at a supermarket in Seoul, Thursday. Yonhap

Such price hikes came as overall consumer inflation in June grew at the fastest pace in five months.

According to Statistics Korea, it increased 2.2 percent from a year earlier, breaching the Bank of Korea’s 2 percent target once more after it was measured at 2.2 percent in January, 2 percent in February and 2.1 percent in March and April, before easing to 1.9 percent in May.

Last month’s growth in consumer inflation was largely attributable to processed foods and dining-out expenses. Processed food prices rose by 4.6 percent compared to a year earlier, marking the highest increase since November 2023.

“Under the circumstances, the price hike of fresh foods may further exert upward inflationary pressure,” said Shin Se-don, honorary professor of economics at Sookmyung Women’s University.

Inha University economics professor Shin Il-soon suggested that a failure to bring down prices of agricultural and fisheries products may offset the government-led campaign for a 50 percent discount on frequently purchased groceries in summer. The items include ramyeon noodles, bread, coffee, ice cream and kimchi.

Other economists believe that the government-led campaign is not sufficient and a long-term approach is needed as climate change has made heat waves more erratic over the years.

“Overall consumer inflation is driven by a combination of climate change, labor costs, rent and foreign exchange rates, among others,” Hansung University economics professor Kim Sang-bong said. “I suggest making sustained efforts, such as securing production and supply of fresh food regardless of weather conditions.”