Reduced Shipments of Napa Cabbage and Radish Due to Weather Conditions
Chocolate Up 17%, Cereal 10%, Coffee Also Up 9%
Inflation for Key Food Items Exceeds Overall Consumer Price Increase of 2.1%
Although the consumer price inflation rate remained stable at just above 2% in the first half of this year, the prices of key food items rose much more steeply, leaving ordinary people still feeling a high level of inflation in their daily lives.
According to the Consumer Price Trends from Statistics Korea and the National Statistical Portal (KOSIS) on July 3, consumer prices in the first half of this year rose by 2.1% compared to the same period last year. This is the lowest level for the first half of the year since 2021, when it was 2.0%, marking a four-year low. The inflation rate for the first half of the year has been gradually declining, from 4.6% in 2022 to 3.9% in 2023, and 2.8% last year. Analysts attribute this easing of inflation to factors such as the stabilization of international raw material prices and the recovery of supply chains.
However, the inflation rates for certain food items far exceeded the overall consumer price index. The price index for fisheries and livestock products rose by 5.1% and 4.3%, respectively, in the first half of this year. Prices for processed foods and dining out, which saw a series of price hikes starting early this year, increased by 3.7% and 3.1%, respectively. On the other hand, agricultural product prices fell by 1.6% compared to the same period last year. This decline was mainly due to a base effect from last year's sharp rise in fruit prices, with fruit prices dropping by 6.1% this year.
By item, radish recorded the highest price increase among all items, soaring by 54.0% in the first half of this year. This was followed by barley rice (42.0%), dried squid strips (39.9%), computer repair costs (27.9%), napa cabbage (27.0%), gim (25.1%), and glutinous rice (23.8%). Statistics Korea explained that the sharp price increases for radish and napa cabbage were due to reduced shipments caused by heavy rainfall and temperature fluctuations. The price of barley rice was affected by a decrease in cultivation area, while the price of dried squid strips rose due to reduced catches caused by high sea temperatures. Among processed foods, items such as chocolate (17.0%), cereal (9.9%), and coffee (8.8%) also saw relatively high price increases due to continued hikes in factory prices.
The photo shows the frozen food sales counter inside a large supermarket in Seoul on the 10th of last month.
Experts point out that despite the overall trend of price stabilization, price increases in categories closely tied to daily life, such as food and dining out, are the main reason why people continue to feel inflation acutely. In reality, the burden can be even greater for low-income households, who are more sensitive to changes in living costs, and for households with a high proportion of fixed expenditures.
Some analysts expect that downward factors, such as weak domestic demand and falling oil prices, will offset the price increases for certain food items, resulting in the annual consumer price inflation rate staying below 2% this year. At the beginning of this year, the government projected the annual consumer price inflation rate at 1.8% in its economic policy direction. In May, the Bank of Korea forecasted the annual consumer price inflation rate at 1.9%.
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