[Report] "Summer Watermelon? Can't Even Think About It"... Deepening Commoners' Worries Amid Soaring Food Prices

Fruit and Vegetable Prices Soar... Onion Prices Double Compared to Last Year
Skyrocketing Food Costs Deepen Struggles for Ordinary People
Merchants Sigh as Consumer Sentiment Weakens

On the 29th afternoon, citizens are shopping at Tongin Market in Jongno-gu, Seoul. Photo by Hyunju Park phj0325@

[Asia Economy Reporter Park Hyun-joo] "Business? I can't even talk about it. It's too difficult.", "These days, I'm afraid to open my wallet."

The soaring prices of everyday meals are deepening the worries of ordinary people. Last month, consumer prices rose by 5.4%, marking the highest level in 13 years and 9 months. With electricity and gas rates set to increase simultaneously next month, there are bleak forecasts that consumer prices in the second half of the year will enter the 6% range for the first time in 24 years.

As a result, merchants' sighs are increasing. Mr. A, who sells vegetables at Tongin Market in Jongno-gu, Seoul, confessed, "I used to go every day to pick up goods, but these days I go only once a week." Since goods are not selling, there is no need to bring in as many vegetables as before. Mr. B said, "A bunch of green onions that used to cost 3,000 to 5,000 won has doubled or tripled. Now it costs over 10,000 won."

The rise in vegetable prices was a direct blow to Mr. B, who runs a side dish shop in Tongin Market. He lamented, "It was already difficult due to COVID-19, and now prices have risen, so the situation is very bad," adding, "Prices have gone up, but the quality has actually worsened."

Although the opening of the Blue House increased nearby tourists, this did not become a boon for Tongin Market merchants. Mr. B said, "It would be nice if tourists came in, but they don't enter the market; they eat at restaurants outside and drink coffee there," adding, "There isn't much food here anymore." When asked if Tongin Market is famous for oil tteokbokki, Mr. B just chuckled.

Recently, the rise in vegetable prices has been significant. According to the Korea Agro-Fisheries & Food Trade Corporation's Agricultural Products Distribution Information (KAMIS) on the 29th, the wholesale price of 15 kg of onions was 23,200 won as of the previous day, about twice the level of last year (10,368 won). The price of multi-cucumber (based on 100 pieces) rose 14.7% from 49,800 won the previous day to 57,133 won, and the price of Chucheong cucumber (based on 50 pieces) increased 8.5% from 27,367 won to 29,700 won. Compared to one month ago, when prices were 33,733 won and 18,875 won respectively, prices have jumped by more than 10,000 won. Zucchini also rose 17.4% to 19,260 won for 10 kg from 16,400 won the previous day.

Watermelon, known as a representative summer fruit, has also seen a sharp price increase. Demand rose amid early heat, but shipments decreased by 4% compared to last year. According to the Korea Rural Economic Institute (KREI) Agricultural Outlook Center's "Agricultural Outlook Fruits and Vegetables June Report," the wholesale price of watermelon this month is predicted to be 2,300 to 2,500 won per kg, up to 31.6% from 1,900 won per kg in the same month last year.

Pork prices have also risen. The KREI Agricultural Outlook Center forecasted the wholesale price of pork this month to be 6,000 to 6,200 won per kg, which is 15.3 to 19.1% higher than the same month last year (5,204 won). This is why people say "not samgyeopsal (pork belly), but geumgyeopsal (gold belly)" among citizens.

On the afternoon of the 29th, Tongin Market, Jongno-gu, Seoul. Photo by Hyunju Park phj0325@

Consumer spending sentiment is also shrinking. According to the Bank of Korea's "June 2022 Consumer Sentiment Survey," the Consumer Confidence Index (CCSI) this month was 96.4, down from 102.6 last month. The consumer confidence index is a comprehensive indicator of consumers' economic sentiment; a value above 100 indicates optimism compared to the long-term average, while below 100 indicates pessimism. Until last month, consumer sentiment was optimistic, but it has turned pessimistic.

Housewife Park, who visited Tongin Market with her grandchild that day, said, "These days, shopping is scary. Meat and vegetable prices are so expensive that just putting a few items in the cart quickly adds up to 100,000 or 200,000 won."

Park, a worker in his 20s, said, "For someone living alone, fruit is a luxury." He added, "Especially watermelon, even if you buy small portions or keep it refrigerated, the price is so high that it's burdensome to eat. I recently went to a mart and the watermelon was over 20,000 won, so I couldn't even think about buying it. I only get to eat fruit when I visit my parents' home."

Meanwhile, consumers' perception of the economy is also freezing. According to the Bank of Korea that day, the expected inflation rate rose to 3.9% from 3.3% last month, an increase of 0.6 percentage points. This means that ordinary consumers currently expect prices to rise about 4% over the next year. As expectations of price increases grow, pressure for wage hikes also increases, which could lead to a vicious cycle of further price rises.

In this regard, Prime Minister Han Duck-soo said at the Cabinet meeting the day before regarding the high inflation situation, "The international conditions are unfolding that way," and "It seems this situation will continue for some time." He added, "I think we must make every effort to minimize the living costs that ordinary people have to bear," and ordered all ministries to prepare measures to stabilize prices.