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(29) Heatwave Impact... Sharp Rise in Cabbage, Radish, and Carrot Prices
International Oil Prices Also Increase... Fueling Inflation

With Chuseok just over a month away, prices are starting to fluctuate. Agricultural product prices have risen sharply due to the heatwave, and international oil prices have also increased, putting upward pressure on inflation. In some supermarkets, the holiday fruit pear is being sold for 12,000 won each.

This month, the price of napa cabbage has exceeded 6,000 won per head, reaching a record high. According to the Korea Agro-Fisheries & Food Trade Corporation's agricultural product distribution information, on the 14th, the retail price of napa cabbage (standard grade) was 6,159 won, an 8.1% increase compared to the average of 5,699 won. Compared to the price on the 2nd of this month (5,373 won), it rose 15% in just two weeks.

Summer is a period when napa cabbage prices tend to rise. Due to high temperatures, the yield per unit area decreases, and after mid-August, the cabbages are shipped from fully highland areas (around 1,000 meters above sea level) where growing conditions are harsh, leading to higher production and distribution costs.

Prices of other agricultural products have also been rising due to the heatwave. On the same day, the retail price of radish (standard grade) was 3,021 won, up 19.7% from the average of 2,523 won. The retail price of carrots (standard grade) per kilogram soared to 6,150 won, a 69.5% increase compared to the average of 3,628 won.

Among fruits, pear prices are showing strength. The retail price of pears (Shingo variety, standard grade, 10 pieces) is 69,992 won. Compared to last year's 30,417 won, this is a 130% increase, and even compared to the average price of 40,843 won, it has surged 71%. Wholesale prices show a similar trend. After surpassing 100,000 won in March, prices steadily rose, reaching 168,800 won on July 17.

A large supermarket located in the Seoul metropolitan area.

Pears priced over 10,000 won each? ... Consumer Price Perception

On the 13th, at a large supermarket in the Seoul metropolitan area, early-ripening Wonhwang pears (sold in packs of 4 to 7) were priced at 19,500 won. The price per pear ranged from 2,785 to 4,875 won. Imported fruits were relatively cheaper. U.S. cherries (500g) were 7,900 won, and U.S. fresh blueberries (310g) were 6,980 won.

On the 12th, Singo pears sold at a Hanaro Mart located in the metropolitan area were priced at 12,000 won each. Photo by Seulgi Yoon

However, in some stores, the price per pear exceeded 10,000 won. At a nearby Nonghyup Hanaro Mart, the price of Shingo pears was around 12,000 won each. A shopper named Kim, who was shopping at the mart, said, "Pear prices are really expensive these days," adding, "I'm worried about Chuseok."

International Oil Prices Rise... Inflation Concerns Ahead of Chuseok

International oil prices are also acting as a factor driving inflation ahead of Chuseok. Recently, geopolitical tensions in the Middle East have escalated, and Dubai crude oil averaged $83.83 per barrel last month, a 1.5% increase from $82.56 the previous month.

Since international oil prices are a major raw material that significantly affects the global economy, their impact on domestic inflation is also considerable. According to Statistics Korea, among the 458 items surveyed for overall inflation, petroleum products have a weight of 46.6 out of 1,000, ranking third after agricultural and livestock products (75.6) and processed foods (82.7). This weight is calculated based on the proportion of monthly average household consumption expenditure for each item out of 1,000.

However, the government expects fruit prices to stabilize as new-season fruits are harvested. The shipment volume of 2024 apples and pears in August is projected to increase by 10.2% and 14.1%, respectively, compared to last year. In particular, early shipments of pears are expected to increase. The Ministry of Agriculture, Food and Rural Affairs announced that the proportion of farms planning early shipments to coincide with the Chuseok peak season (September 3 to September 16) has increased by 26 percentage points compared to the previous year.