Vegetable Prices Surge Due to Extreme Heavy Rainfall
As extreme heavy rains cause widespread flooding damage to farmland, prices of agricultural products, especially vegetables served at the dining table, are fluctuating. Leafy vegetables such as lettuce and spinach, which have low storability, have been directly hit by reduced shipments and quality deterioration due to the heavy rains. Concerns are rising that the price increase driven by vegetables could once again stimulate consumer prices, which had been stable, prompting price authorities to closely monitor the situation.
According to the Korea Agro-Fisheries & Food Trade Corporation (aT) on the 18th, as of the 16th, the month-on-month wholesale price increase rates for agricultural products reached 289.7% for green leaf lettuce, 216.3% for cucumbers, and 130.2% for spinach. Prices of other major vegetables also surged, including perilla leaves by 96.6%, zucchini by 65.4%, Cheongyang chili peppers by 55.9%, radishes by 30.9%, and napa cabbage by 27.4%. In particular, green leaf lettuce prices quadrupled in one month, and spinach prices more than doubled, showing a large price increase for leafy vegetables with low storability. The decrease in shipments and quality deterioration caused by the extreme heavy rains (more than 50mm per hour) following the heatwave are interpreted as factors driving up vegetable prices that had been stabilizing.
From July until the 16th, the area of farmland reported flooded to the Ministry of Agriculture, Food and Rural Affairs totaled 11,175 hectares. On the 16th alone (as of 6 p.m. reports), farmland buried or flooded nationwide reached 279 hectares, equivalent to one-third the size of Yeouido. The problem is that with heavy rains continuing in the central and southern regions for the time being, the upward trend in agricultural and marine product prices may intensify further. The Korea Meteorological Administration forecasted that this year’s monsoon rains will fall in large amounts over a short period and accompanied by strong winds. The stationary front that dumped a water bomb on the Seoul metropolitan area has moved south since the previous night and is expected to bring heavy rain to the Chungcheong and southern regions until the 19th. Such extreme heavy rains create the worst growing conditions not only for facility-grown vegetables but also for open-field vegetables like napa cabbage and radishes.
The government is closely watching whether this heavy rain will become a negative factor that re-stimulates the previously stabilized price trend. Last month’s consumer price index (2.4%) maintained a stable trend in the 2% range for three consecutive months, showing the lowest increase rate in 11 months since July last year (2.4%). The government has projected an annual inflation rate of 2.6% this year and expects prices to stabilize as inflation falls to the low to mid 2% range.
However, concerns about additional damage are expected to grow due to continued heavy rains, and the recent upward trend in international oil prices is also expected to be reflected with a 2-3 week lag, prompting strengthened monitoring. Seasonal factors such as heatwaves, typhoons, and Chuseok in August and September, combined with external negative factors like rising oil prices, increase the likelihood of further inflation uncertainty.
A Ministry of Economy and Finance official said, "Since the price strength of vegetables and some fruits continues due to the impact of heavy rains, we will monitor price-unstable items and strengthen supply and demand management with related ministries." The government plans to introduce measures to reduce consumer burdens, such as discount events for Chuseok holiday essentials next month, to defend prices.
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