Vegetable and Instant Noodle Prices Surge... Red Alert for Grocery Inflation

[Anchor]

It is time for "Friendly Economy" with reporter Han Jiyeon. Han, vegetable prices have been extremely high lately.

[Reporter]

Many of you probably noticed this while grocery shopping.

Leafy vegetables like cabbages, red leaf lettuce, and spinach have jumped by nearly half in just a month.

First, 1 kg of young summer radish (yeolmu) costs 3,111 won, up 34 percent from a month ago.

Cabbages and red leaf lettuce rose by 46 percent, spinach by 52 percent, and perilla leaves and early-harvest napa cabbage—virtually all leafy vegetables have gone up.

If you fill your grocery basket with leafy vegetables, what cost 10,000 won a month ago now exceeds 15,000 won.

The reason behind this is that torrential rains continued for about eight to 10 days in mid-July.

Eighty-seven percent of the country's flooded agricultural land was concentrated right in the Chungcheong region.

As luck would have it, that area is the main production hub for leafy vegetables, which completely blocked harvesting and shipping.

When fields fill with water, the roots cannot breathe and pests multiply, and right as this water receded, a heatwave struck immediately.

Leafy vegetables have wide leaves and a high moisture content, making them especially vulnerable to heat.

With the scorching midday sun drying out the leaves completely, yields have decreased further and quality has dropped, causing prices to skyrocket.

[Anchor]

It seems processed foods like cup noodles and cola are also rising in price.

[Reporter]

At this point, you could say almost everything is going up.

The fallout from the Middle East war is affecting every corner of our grocery carts.

Starting the day after tomorrow on August 1st, Nongshim cup noodles and snack prices will go up.

Yukgaejang cup ramen sold at convenience stores will go from 1,100 won to 1,200 won, and Shrimp Crackers (Saewookkang) from 1,500 won to 1,600 won.

CJ CheilJedang Hetbahn and dumplings will also rise by an average of 8 percent.

Tous les Jours bread will increase starting tomorrow, and Dunkin Donuts prices will go up starting August 2nd.

Following Lotte Chilsung Beverage's price hikes last month, Coca-Cola Beverage is also planning to raise its convenience store supply prices next month.

The reason these increases are happening one after another is that the international price of naphtha, the raw material used to make snack and noodle packaging bags, has jumped by more than 44 percent over the past year.

In addition, the price of aluminum used to make beverage cans has also surged.

International market prices have risen by over 40 percent in a year.

Essentially, the Middle East conflict has impacted everything from ramen to cola.

On top of this, rising exchange rates have made imported raw materials more expensive to purchase.

As a result, the government is also asking companies to minimize price hikes as much as possible by cutting tariffs on imported raw materials or supporting funds for raw material purchases.

[Anchor]

It is certain that our country has now entered a rate-hike cycle, and the question now is the speed and magnitude.

[Reporter]

That is correct. Yesterday, Bank of Korea Governor Rhee Chang-yong stated, "Maintaining the benchmark interest rate hike stance to curb core inflation is the most rational approach."

He reaffirmed the rate-hike stance once again.

Consumer inflation last month rose 3.2 percent compared to a year ago.

Since it was 3.1 percent in May as well, it has remained in the 3 percent range for two consecutive months.

The government is also trying its best to tame inflation.

It has been implementing a ceiling price system since last March to control fuel prices, and it estimates that this lowered June inflation by 0.4 percentage points.

Even with this defense, inflation still exceeds the 3 percent range.

There is a separate figure that the BOK is more worried about.

That is core inflation.

Governor Rhee specifically mentioned that he views this as more important than the overall consumer price inflation rate.

It is an inflation indicator that excludes volatile factors—such as weather-affected agricultural products or international oil prices—and looks only at the genuine trend. This indicator stood in the early 2 percent range until April of this year, but rose to 2.5 percent in May.

During a National Assembly operational report yesterday, Governor Rhee predicted that inflation will stay above target levels for a considerable period because the possibility of international oil prices fluctuating again due to the Middle East situation remains, accumulated cost increases and exchange rate impacts continue, and demand pressures are growing as the economy improves.

Therefore, because the increases in both vegetable and ramen prices are due to complex issues, the BOK's stance is that it is necessary to continue the interest rate hike trend to curb core inflation.

In fact, the benchmark interest rate has already been raised from 2.5 percent to 2.75 percent this month, and three more card meetings remain for August 27th, October 22nd, and November 26th.

Consequently, the burden on both grocery prices and loan interest is likely to persist for the time being.
※ Please note: This article was translated by AI and may contain errors.