Prices of agricultural, livestock, and fisheries products in November rose 5.6% from a year earlier, the biggest increase in 17 months. Poor harvests due to worsening weather and higher prices of imported agro-fishery products driven by the won-dollar exchange rate increase contributed to the rise.
As a result, living costs also rose, but the government said it is still hard to see this as agflation. Experts say agflation could materialize if the upward trend in agricultural, livestock, and fisheries prices continues.
According to the "November consumer price trends" released by the National Data Office on the 2nd, prices of agricultural, livestock, and fisheries products rose 5.6% year over year. The growth rate is the highest in 1 year and 5 months since June last year (6.5%). In this regard, Koo Yun-cheol, Deputy Prime Minister for Economic Affairs and Minister of the Ministry of Economy and Finance, said at the Economic-Related Ministers' Meeting and Price-Related Ministers' Meeting held that day that it was due to "worsening weather, including frequent rainfall."
November prices for agricultural, livestock, and fisheries products are affected by rainfall in September to October, because there is a time lag before goods grow and are harvested. This September's rainfall was 228.8 mm, higher than the average (155.1 mm). October's rainfall was also 173.3 mm, higher than the average (63 mm).
As a result, harvests of agricultural, livestock, and fisheries products were poor, and prices rose across the board. Compared with November last year, tangerines rose 26.5%, apples 21.0%, and rice 18.6%. Among livestock and fisheries products, prices of pork (5.1%) and mackerel (13.2%) also increased.
The rise in the won-dollar exchange rate also fanned the price increases of agricultural, livestock, and fisheries products. The won-dollar exchange rate, which was around 1,390 won in November last year, surpassed 1,470 won this month. As a result, kiwi, which has a high import share, rose 12%. Mango also rose 8.8%, and imported beef increased 6.8%.
Due to the impact of higher prices for agricultural, livestock, and fisheries products, the living cost index (2.9%) posted the biggest rise since July last year (3.0%). Among items other than agricultural, livestock, and fisheries products, petroleum products (5.9%) rose the most in nine months. The consumer price index stood at 117.20 (2020=100), up 2.4% from a year earlier. Except for May and August this year, the consumer price inflation rate has consistently remained in the 2% range.
The government said that tariffs on 10 food raw materials, including sugar and coffee, and nine feed raw materials, including hulled barley, will be waived through the end of next year. Tariffs on 12 items, including processed egg products, will be waived through June next year.
☞Agflation
Agflation is a portmanteau of agriculture and inflation. It refers to a phenomenon in which general prices rise as agricultural product prices increase.