Soaring Cabbage Prices Trigger 'Kimchi Crisis'... Stores and Online Say "No Kimchi Available"

Shortage of Packaged Kimchi Online and Offline
Increased Demand Due to Rising Vegetable Prices
Supply Instability Amid Poor Harvests
Hoarding Following Price Hike News
Chinese Kimchi Gains 'Reflected Benefit'... Imports Increase

On the 22nd, a notice regarding product restocking was posted at the packaged kimchi section of a large supermarket in Cheongna-dong, Seo-gu, Incheon.
Photo by Song Seung-yoon

[Asia Economy Reporter Song Seung-yoon] "I've never seen a supermarket without kimchi in my life."

On the afternoon of the 22nd, at a large supermarket in Yeouido-dong, Yeongdeungpo-gu, Seoul, the interior was quiet as it was a weekday afternoon, but one spot was crowded with people. It was the kimchi display selling packaged kimchi. Due to a sudden increase in demand for kimchi, customers eager to buy kimchi in advance kept coming continuously. Similar situations were seen elsewhere. At a large supermarket in Cheongna-dong, Seo-gu, Incheon, visited on the same day, some brands of napa cabbage kimchi had completely disappeared from the kimchi display by evening. Although varieties of kimchi not made with napa cabbage, such as young radish kimchi, chonggak kimchi, and mustard leaf kimchi, remained in some quantity, napa cabbage kimchi was almost nonexistent regardless of brand. Those who arrived late had to leave disappointed, only touching other products. Housewife Choi Kyung-ran (64), who visited the supermarket that day, said, "I only heard on the news that kimchi supply was unstable, but I never thought it would be like this," adding, "I wanted to buy in advance because prices were expected to rise further, but I had to leave empty-handed."

With the price of napa cabbage soaring ahead of the kimchi-making season, the feared 'kimchi crisis' is becoming a reality. The prices of kimchi-making vegetables have skyrocketed, increasing demand for packaged kimchi, but poor crop yields have made supply unstable. Shortages have already occurred in large supermarkets and online shopping malls, and some large supermarkets have even started limiting purchase quantities. As signs of further price increases for packaged kimchi appeared, hoarding behavior emerged among consumers.

As of the 23rd, most napa cabbage kimchi products on Daesang Cheongjeongwon’s online mall ‘Jeongwon e-Shop’ are temporarily out of stock, following some items. Except for canned seasoned kimchi, stir-fried kimchi, and young radish kimchi, even children’s kimchi products are difficult to purchase. On CJ CheilJedang’s official online mall, The Market, ‘Sliced Napa Cabbage Kimchi’ and ‘Yeosu Dolsan Mustard Leaf Kimchi’ are sold out. Similarly, Pulmuone’s online mall Shop Pulmuone has temporarily sold out all items except ‘Radish & Napa Cabbage Kimchi’ and ‘Children’s Kimchi.’

The offline market shows a similar situation. Large supermarkets in Seoul and Incheon visited that day, as well as nearby small and medium-sized supermarkets, all had difficulty selling kimchi. In some residential areas, even small-packaged kimchi sold at convenience stores ran out.

This phenomenon was triggered by the skyrocketing prices of vegetables used to make kimchi. According to data submitted by the Korea Agro-Fisheries & Food Trade Corporation to Lee Dal-gon, a member of the National Assembly’s Agriculture, Food, Rural Affairs, Oceans and Fisheries Committee from the People Power Party, the price of ingredients for kimchi-making for a four-person household rose 35% from 240,000 won in November 2017 to 324,000 won in December last year, four years later. The price increase feels even more real at current levels. As of the previous day, the average wholesale price of 10 kg of napa cabbage was 34,080 won, a rise of over 128% compared to 14,900 won a year ago. Other kimchi-making vegetables also saw similar increases. Radish rose over 148%, from 12,365 won for 20 kg a year ago to 30,760 won now; onions increased 58%, from 14,591 won to 23,100 won for 15 kg; green onions rose 18%, from 7,176 won to 8,498 won per kg; and garlic (Daeseo variety) increased over 6%, from 156,000 won to 166,200 won for 20 kg.

Given this situation, buying kimchi rather than making it at home has become more reasonable, increasing preference for packaged kimchi. However, due to pest damage caused by heavy rains this summer, napa cabbage crop yields were worse than usual, creating a supply-demand imbalance. Furthermore, the price of packaged kimchi, which had already risen earlier this year, is expected to rise again or has already increased, causing explosive growth in purchase demand. Daesang, the leading packaged kimchi company, plans to raise the price of Jongga Jip kimchi by an average of 9.8% starting next month. CJ CheilJedang raised the price of Bibigo kimchi by an average of 11% from the 15th, and the National Agricultural Cooperative Federation is also preparing to increase the price of Korean Agricultural Cooperative kimchi. Other large and small companies are also joining the wave of kimchi price hikes one after another.

Accordingly, imports of relatively cheaper Chinese kimchi are also showing signs of increase. According to customs export-import trade statistics, the import value of Chinese kimchi from the beginning of this year to last month was $109.862 million, a 27.6% increase compared to $86.099 million during the same period last year. Especially, last month’s kimchi import value was $13.376 million, more than 41.1% higher than August of last year.

An industry insider said, "Due to abnormal weather causing poor napa cabbage harvests and a sudden increase in demand, a temporary kimchi supply shortage has occurred," adding, "We expect this situation to ease from the end of this month and prices to stabilize somewhat by the end of the year."