Rice Prices Soar for Third Month... Government Expects Stabilization After New Crop Shipment This Month

Rice Prices Surpass 60,000 Won Last Month
About 25% Higher Than the Average Year
Market Expects Stabilization as New Crop Arrives Late This Month

Rice prices have continued to rise sharply for the third consecutive month. The government expects that prices will stabilize once the new crop of rice is fully shipped to the market at the end of this month.

On October 10, Korea Agro-Fisheries & Food Trade Corporation (aT) Agricultural Products Distribution Information (KAMIS) announced that, as of October 2, the retail price of rice (20kg, premium) was surveyed at 68,435 won. This is a 29.1% increase compared to the same period last year (52,980 won), and about 25% higher than the average year (54,747 won).

Since surpassing the 60,000 won mark in early September, rice prices have continued to climb. According to the "September Consumer Price Trends" released by the National Data Office, the consumer price index for rice in September rose 15.9% year-on-year.

Yonhap News Agency

The main reason cited for the sharp increase in rice prices is the government's excessive market isolation measures last year. At that time, the government isolated 260,000 tons from the market to prevent a price crash. However, as this year's production turned out to be lower than expected, a supply-demand imbalance occurred. In addition, frequent rainfall during the summer delayed the harvest of early varieties, causing purchase prices to surge.

Recently, the government supplied 30,000 tons (in August) and 25,000 tons (in mid-September) of reserve rice to local distributors on a rental basis in an effort to stabilize supply and demand. The government also plans to reduce the burden on consumers by holding rice discount events in cooperation with distributors.

The Ministry of Agriculture, Food and Rural Affairs is considering extending the rice discount events even after the Chuseok holiday and plans to announce "measures to stabilize rice supply and demand during the harvest season" early next week.

The market expects rice prices to gradually stabilize from late this month as the new crop is shipped in earnest. However, it is expected to take some time before consumers feel a noticeable drop in prices.