Prices for eggs, chicken, chocolate, and coffee are on the rise at the dining table. Supply and demand disruptions, cost burdens, and price adjustment sentiments ahead of a political regime change are contributing to a surge in increases. The government has raised the possibility of 'collusion' regarding certain items and has heightened monitoring levels, but reversing the trend of price increases remains a challenging situation.
According to the Korea Livestock Products Quality Assessment Institute's livestock distribution information on the 27th, the retail price of a tray (30 eggs) of special eggs on the 26th averaged 7,052 won, marking increases of 8.7% from last year (6,488 won) and 3.9% from the average price (6,789 won). The concern over 'eggflation' has materialized for this essential item.
According to the Korea Rural Economic Institute, the number of laying hens in the second quarter has slightly increased compared to last year, but egg production is expected to decline due to diseases. In fact, a diagnosis from the institute notes that many farms have experienced outbreaks of diseases such as avian influenza (AI) and infectious bronchitis (IB), leading to a decrease in laying rates. The emergence rates of special and large eggs among the harvested eggs have decreased, causing difficulties in securing high-quality eggs.
Concerns are also growing about supply disruptions for chicken. Recently, with the outbreak of highly pathogenic avian influenza in Brazil, the government has prohibited imports of Brazilian chicken. This has led to forecasts of a decrease in domestic supply and potential price increases.
The productivity of broiler farms is also declining. According to the institute, the number of broilers stocked in the second quarter is expected to decrease by 1.6% from last year to about 191 million birds. With a decrease in broiler supply, the market price (kg) for large broilers in the second quarter is forecasted to rise compared to the same period last year (1,618 won). An industry insider noted, "As broiler prices rise and imports of Brazilian chicken are blocked, the cost burden for chicken could also increase."
Processed food prices are also on the rise. Starting next month, chocolate products from Ferrero Rocher and Kinder will increase by up to 19.8%, while Maeil Dairies raised the prices of cup coffee and cheese by an average of 8.9% last month. Dongseo Foods will increase the prices of coffee products by an average of 7.7% this month. This is a result of various factors, including rising raw material prices and labor costs.
The food industry maintains that price increases are unavoidable. While the industry explains that structural burdens have accumulated due to rising prices of raw materials and exchange rates, there is also analysis that many companies have boarded the 'last train of price increases ahead of the election', in recognition that the government's price interventions may loosen before the presidential election. Since price stability is likely to emerge as a core task after the new government takes office, companies are hurrying to adjust prices.
The government is taking measures to alleviate supply instability and lower the perceived cost of living. It has applied a 0% tariff on 10,000 tons of pork and 4,000 tons of processed egg products. The discount event for pork belly at large supermarkets has been funded by livestock subsidy funds. The number of items subject to tariff allocations has been expanded from 13 to 21, and 450 billion won has been allocated to support small and medium-sized enterprises in purchasing materials and supplies.
The cost of dining out has increased by 3.2% compared to the same period last year. Rising labor costs, rent, and delivery app fees have collectively heightened the burden felt by consumers. In response, the government is expanding public delivery apps and offering discount coupons. Starting next month, a coupon program will be implemented, providing a 10,000 won refund for three orders over 20,000 won, with an additional budget of 65 billion won being allocated.
As price increases continue, the government is conducting joint investigations with the Fair Trade Commission into certain items that have seen price hikes. The Fair Trade Commission recently conducted on-site investigations on some confectionery companies, and the Ministry of Agriculture, Food, and Rural Affairs noted that "a thorough inspection of the entire distribution structure is necessary."
Choi Cheol, a professor in consumer economics at Sookmyung Women's University, emphasized, "The government needs to manage risks in advance through diversification of import sources and support with quarantine and tariffs," adding that it is necessary to closely monitor whether the level of price increases is excessive or an unavoidable trend within the context of rising domestic and international costs.
He continued, "Agricultural and marine products are significantly affected by climate and production environments, so continuous monitoring by the government of the domestic and international supply structure is vital," and remarked, "In a situation where consumer sentiment is depressed, unless supply stability and economic recovery proceed simultaneously, price instability will not be easily resolved."