hankyoreh

A person peers at produce prices at a supermarket in Seoul on July 4, amid high produce prices. (Yonhap News)

“A few days ago, it was jerky. Yesterday, it was sausage. Today, it’s blood sausage…”

A 30-year-old employee at a food production company has gotten firsthand experience with the steep rise in prices in South Korea, watching as notices arrive day in and day out stating that sales prices have to be increased due to rising ingredient costs.

“Today, they raised the purchase prices for meatballs and hot dogs, so we’re probably going to get a notice telling us to raise the selling price for those too,” said the employee, whose surname is Park.

On Tuesday, Statistics Korea published a report on consumer price trends for June. According to those figures, consumer prices last month were up by 6% from a year ago, showing their highest rate of increase since November 1998, when the rate hit 6.8% amid the Asian financial crisis.

The consumer price index for living necessities also jumped 7.4%. Seen as an indicator of how high prices feel to consumers, the index is based on a selection of 144 items that are frequently purchased and represent a large part of expenditures.

Food items, in particular, showed a 7.7% rise, as South Koreans faced a growing burden of high grocery prices.

Speaking at a Cabinet meeting Tuesday morning, President Yoon Suk-yeol said, “The world is experiencing the most severe price shocks since the oil crisis of the 1970s with the combination of supply chain reorganizations and the COVID-19 pandemic.”

Yoon also announced his plans to “go out into the field to listen to the struggles that the South Korean public is facing.”

The burden on consumers has been compounded by upward trends in agriculture, livestock, and seafood prices, which had appeared to be stabilizing this spring.

Produce prices were up by 6% from a year earlier, while prices for agricultural products in general showed their first increase in five months (1.6%). Rates of increase were especially high for daikon radishes (40%), potatoes (37.8%), napa cabbage (35.5%), and regular cabbage (21.1%).

At 10.3%, the rise in livestock product prices was higher than last month, with particularly steep jumps seen for pork (18.6%) and imported beef (27.2%).

“These days, when I go shopping at the grocery store, it comes out to well over 200,000 won, even when there isn’t much in the cart,” said a 56-year-old stay-at-home mother surnamed Shin, who cooks meals for her family of four.

“The cost of food has gone up enormously,” she said.

“I’m scared to even consider eating out,” she added. “The combo meal that used to go for 35,000 won at the trotter restaurant in our neighborhood is now going for 40,000 won.”

With demand recovering to normal levels amid the return to normalcy after the lifting of COVID-19 curbs, the added rise in raw material costs has also driven up prices in the area of personal services. Restaurant prices are up by 8% from a year earlier — the first time they have risen by 8% or more since October 1992 (8.8%).

Prices have also risen steeply for some of the most frequently sought restaurant dishes, including short rib soup (12.1%), noodles with black bean sauce (11.5%), and fried chicken (11%). Prices for services besides restaurants were up by 4.2%, with insurance service costs climbing 14.8% and designated driver service costs rising by 12.5%.

According to Statistics Korea, the growing costs of agriculture, livestock, and seafood products and personal services are attributable to the rise in international energy prices. As higher global oil costs lead to hikes in the prices of petroleum products and livestock feed, the inflation pressures have been reaching into every area.

Petroleum prices for June were up by 39.6% from a year earlier, accounting for 1.74 percentage points out of the 6% rise in overall prices. The upward pressure on oil prices has continued with both the economic recession and the growing likelihood that a ceiling will be imposed on export prices for Russian crude oil.

“When it comes to prices, there are a lot of upward factors, while the downward factors are uncertain,” said Eo Woon-sun, a senior official at Statistics Korea.

“If things continue with the very fast rate of increase we’re seeing right now, we can’t rule out the possibility of rises in the 7%–9% range,” he added.

Since passing the 2% mark in April 2021, the inflation rate has been steadily growing. It took six months for it to pass 3%, with a level of 3.2% recorded in October 2021.

Since then, the increase has gained speed, passing the 4% mark five months later in March 2022 (4.1%) and the 5% mark just two months after that in May.

By Lee Ji-hye, staff reporter

Please direct questions or comments to [english@hani.co.kr]