Long rainy season deepens price concerns

Prices of vegetables, fruit and coffee rapidly escalating


A prolonged rainy spell is deepening concerns over increases in consumer prices.

The government had expected the nation’s consumer price index, which hovered at 4.3 percent in the first half of the year, would stabilize in the latter half at 3.7 percent.

But, coupled with high oil prices, the long rainy season is adding to uncertainty about the outlook for consumer prices in the coming months.

This year’s rainy season, or “jangma,” which started earlier than usual on June 22, had as of Sunday already brought rain equal to almost half the annual precipitation. 

According to the Korea Agro-Fisheries Trade Corporation, the price of lettuce has increased 120.8 percent compared to a month ago, while that of spinach has seen a 102.7 percent increase in the same period.

Prices of green pumpkin have increased by 60.8 percent and cucumber by 38 percent.

The average wholesale price per 20 kilograms of rice stood at 39,000 won ($37), up 19.6 percent from a year earlier.

Despite the moderate fluctuation in the price of rice compared to last year, a price increase is possible as a cut in the government’s stockpile of rice is expected in the second half of the year.

The unusually long rainy season will also affect supplies of fruits for ancestral rites for the Chuseok holiday that falls on Sept. 12, also arriving sooner than usual on this year’s calendar.

“We have to carefully monitor weather changes after the rainy season. A tight supply is possible because wet agricultural products are more vulnerable to disease and insects in the scorching heat to come,” said a Finance Ministry official.

Officials, however, added that price hikes were a common and expected trend in the summer season during which rainfall and typhoons are more frequent.

Amid soaring prices of food ingredients, eating out has become more costly.

The price of dishes office workers favor for lunch, such as “seollungtang” and “naengmyeon,” are now about 9,000-10,000 won.

In a May report by Statistics Korea, the price of popular Chinese dishes such as “jajangmyeon,” “jjamppong” and sour-and-sweet pork rose by 8.2 percent, 8.3 percent and 11.4 percent ― above the average growth rate for consumer prices.

Coffee prices in Korea also increased 4.5 percent in the second quarter from three months earlier, due mainly to soaring costs of importing coffee beans, according to data compiled by the central bank and Statistics Korea.

The data showed the increase is more than six times larger than the 0.7 percent on-quarter gain in consumer prices in the April-June period. It also marks the biggest jump in nearly two years since a 4.7 percent increase in the third quarter of 2009.

The tallied coffee prices include canned varieties and instant mixes produced by food manufacturers. They do not include fresh brews sold by franchises such as Starbucks Corp., according to a news report.

The price of “jeonse,” the lump-sum deposit to rent a house here, also rose 11.3 percent in June from a year earlier, according to Kookmin Bank statistics. Jeonse growth was 4.6 percent in June from May, the highest monthly increase since May 2003, the data found.

Rent prices also recorded the highest growth in 15 years last month, at 2.8 percent.

With the government planning to announce increases in public services fees such as electricity charges and motorway tolls as well, price concerns will continue for some time, experts said.

“It has been widely expected that consumer prices will stabilize at 3 percent in September. But considering factors such as hikes in agricultural products, public service fees and the inflationary pressure in China, the outlooks still remains to be seen,” said Lee Geun-tae, an analyst at LG Economic Research Institute.

By Lee Ji-yoon (jylee@heraldcorp.com)