[On-site Video] Chicken Price Increase Due to Putin? How High Will Cooking Oil Prices Go?

[Asia Economy Reporter Han Seung-gon, PD Yoon Jin-geun] "Gasoline prices have risen a lot, they have doubled," "It's worrisome."

On the 15th, Park (60), a self-employed person running a chicken restaurant in Euljiro, Jung-gu, Seoul, sighed, saying, "(Gasoline prices) have risen a lot. They have doubled immediately," adding, "It used to be 27,000 won per 20 liters, but now it is 47,000 won."

Due to the ripple effects of Russia's invasion of Ukraine shaking global food prices, cooking oil prices are soaring, deepening the worries of self-employed business owners. Especially in fried food specialty stores such as chicken restaurants, the cost burden is directly felt, leading some citizens to worry that this might lead to so-called 'Russia-origin chicken price hikes.'

Among self-employed business owners, chicken price increases have already begun. Another self-employed person Kim (61), who runs a chicken restaurant in Dongdaemun-gu, said, "We see the price increase as due to the Ukraine war and other factors," adding, "The supplier says that even after the war ends, prices are unlikely to drop, so they advise stocking up on oil in advance." He continued, "We are planning to raise chicken prices. It's because we have to match the (raw material) prices..."

[Image source=Yonhap News]

According to the industry on the 16th, as merchants have appealed, the price of commercial cooking oil (soybean oil) which was around 22,000 won per 18L container has more than doubled to about 50,000 won compared to early last year.

Due to multiple adverse factors such as supply chain disruptions caused by COVID-19, rising soybean prices as raw materials, and Russia's invasion of Ukraine, cooking oil prices appear to be rising. The situation is similar for canola oil and sunflower seed oil as well.

Given this situation, complaints continue not only from self-employed business owners but also from citizens. Kim, a company employee in his 30s, said, "I used to enjoy eating chicken, but if prices go up, it will be a bit burdensome." He added, "If gasoline prices rise, not only chicken prices but also other food prices will increase, which is worrisome."

Meanwhile, due to the Ukraine crisis, prices of cooking oil as well as raw materials including international oil prices have surged, causing South Korea's import prices to rise for two consecutive months last month.

As Russia's invasion of Ukraine prolongs, oil prices recently exceeded $100 per barrel, while the won-dollar exchange rate continues its high-level trend in the 1,200 won range. Additionally, forecasts suggest that import prices will continue to rise. Since import prices are reflected in consumer prices with a time lag, domestic inflationary pressure is also expected to increase.

Furthermore, according to the 'February 2022 Export and Import Price Index' announced by the Bank of Korea on the 15th, last month's import price index was 137.34, up 3.5% from the previous month. This marks a two-month consecutive rise and a 29.4% increase compared to a year ago. Based on the same month last year, it has been rising for 12 consecutive months.