Start of the Monsoon Season... Risk of Further Rise in Calmer Agricultural Product Prices [Chosun Price Records]

(23) Spring Vegetables Released, Agricultural Product Prices Fall
Start of Monsoon Season... Concerns Over Price Fluctuations in Agricultural Products

As the rainy season begins in Jeju, concerns over summer grocery prices have also grown. This summer, with record-breaking heavy rain and heatwaves forecasted, agricultural product prices, which had stabilized due to the spring vegetable harvest in open fields, are now at risk of soaring due to crop damage.

The rainy season started on June 19, beginning with Jeju Island. The Korea Meteorological Administration (KMA) expects this summer to be hotter and wetter than usual. According to the KMA's three-month forecast from June to August, the probability of temperatures being higher than average is 50% for June and August, and 40% for July, which is expected to be similar to or higher than average. Precipitation is expected to be similar to average in June with a 50% probability, and in July and August, there is a 40% chance of precipitation being similar to or greater than average.

Photo by Jinhyung Kang aymsdream@

Based on the average climate over the past 30 years, the rainy season typically starts on June 19 in Jeju, around June 23 in the southern regions, and June 25 in the central regions. Following this, the North Pacific High gradually moves northward, and the rainy season ends latest in the central region around July 26. Nationwide, the rainy season lasts about 32 days. The number of rainy days in the central, southern, and Jeju regions is approximately 17 days, with average precipitation and ranges of 378.3mm (103?856mm), 341.1mm (84?647mm), and 348.7mm (99?629mm), respectively. South Korea's annual precipitation is 1,333mm, with about 50% concentrated in the summer, including the rainy season.

The Rainy Season Driving Up Agricultural Prices

With the onset of the rainy season bringing concentrated heavy rainfall, alarm bells have been triggered for agricultural product prices. Especially with climate change causing frequent localized heavy rains over short periods, the risk of damage to crops and agricultural facilities has increased. When weather conditions cause poor crop yields or outbreaks of pests and diseases, agricultural product prices rise sharply.

Last year, from July 10 to July 23, regions including Jeonbuk, Chungnam, Chungbuk, and Gyeongbuk experienced damage to 35,393 hectares of crops (35,037 hectares submerged, 356 cases of fruit drop), 8,710 livestock, and 59.9 hectares of facilities such as barns and vinyl greenhouses. Agricultural and livestock product prices also rose at that time. Looking at the consumer price index (CPI) for last summer, it was 112.25 in June, 114.30 in July, and 120.23 in August for agricultural and livestock products, while the overall CPI was 111.16, 111.29, and 112.28, respectively, showing an upward trend. During this period, overall prices rose by about 1%, but agricultural and livestock product prices increased by approximately 8%.

This year, agricultural product prices have risen so much that the term 'agflation' (agriculture + inflation) has become common, but prices began to fall as shipments of cabbage and radish started in earnest in June.

According to the Korea Rural Economic Institute's Agricultural Outlook and Statistics Information System (OASIS), as of June 19, the wholesale price of cabbage (top grade, 10kg mesh bag) was 6,137 won, down 16% from 7,311 won a year earlier. Cabbage prices had averaged around 14,000 won in April.

Radish prices also fell compared to the previous month. The price of radish (top grade, 20kg box) dropped from an average of 16,625 won in May to 14,737 won this month, an 11% decrease. The average price of green onions (regular, top grade, 1kg) in June is also the lowest this year. The average price of green onions, which approached 4,000 won in December last year, fell to 1,440 won in June. The price of cabbage (top grade, 8kg mesh bag), which surged to the 23,000 won range in May, dropped to the 4,000 won range in June.

Agricultural Products as the Main Cause of This Year's Price Increases... "Need for Mid- to Long-Term Measures"

On the morning of the 20th, when the rainy season began in Jeju Island, the school route of Nohyeong Elementary School in Jeju City was crowded with children holding umbrellas. Photo by Yonhap News

The consumer price inflation rate in the first half of this year (January to May) slowed moderately by 0.4 percentage points compared to the second half of last year, but agricultural products and petroleum products contributed to price increases. The inflation rate, which was 2.8% at the beginning of the year, exceeded 3% between February and March due to rising agricultural product prices, international oil prices, and exchange rates, then fell below 3% again after April as the rise in agricultural product prices slowed somewhat.

The Bank of Korea pointed out in this month's 'Price Stability Target Operation Status Review' report that "the rise in domestic average temperature appears to increase inflation through agricultural product prices, indicating the need to prepare related measures from a mid- to long-term perspective."

Meanwhile, the government has taken steps to manage supply and demand in preparation for potential shortages of agricultural products during the summer. Song Mi-ryeong, Minister of Agriculture, Food and Rural Affairs, stated on the 17th, "Thanks to the efforts of farmers, spring cabbage is being supplied stably, reducing the burden on consumers, but summer is a difficult time for cabbage cultivation due to heatwaves and heavy rain. We will work closely with the Rural Development Administration, local governments, and the NongHyup to ensure thorough growth management."