As a cold snap continues with wind chills dropping to minus 20 degrees Celsius, prices of agricultural and seafood products on the table are soaring. As prices rise for fruit and vegetables vulnerable to low temperatures, producer prices are being pushed up, and there is a growing possibility this impact will be passed on to consumer prices.
According to the Bank of Korea on the 26th, the producer price index in December last year rose 0.4% from the previous month to 121.76, marking a fourth straight month of gains. In particular, producer prices for agricultural, forestry and fishery products increased 3.4 percentage points from the previous month, leading the overall price rise.
In fact, since the start of this month, prices of leafy vegetables such as perilla leaves and lettuce and fruits such as apples and tangerines have surged, with the cold snap disrupting supply and demand and affecting table prices across the board. The industry said repeated sharp temperature drops could also disrupt the supply of wintering crops.
Large discount chains are moving to reduce price volatility as abnormal weather becomes routine. Lotte Mart has expanded sales of smart farm–grown products focusing on weather-sensitive vegetables such as perilla leaves, cucumbers and lettuce. E-MART is responding to winter price spikes by stockpiling and managing produce through its own fresh center.
A distribution industry official said, "Leafy vegetables and fruits are extremely sensitive to natural conditions. Price increases due to cold damage occur frequently," and added, "While cultivation technologies that are not bound by the environment, such as smart farms, are gaining attention, the share of agricultural and seafood products grown with such technologies is not large enough to stabilize overall prices, so an impact is inevitable."
The restaurant industry is also facing a double burden from rising ingredient prices due to the cold wave, a strong dollar and higher raw material costs. In particular, along with higher prices for domestically produced ingredients such as vegetables, import prices for coffee beans, wheat and soybeans are rising, intensifying cost pressures on restaurants.
Arabica bean prices have surpassed $7,900 per ton, up about 7% from a year earlier, and the surge in the exchange rate has further raised import costs. The livestock products market is also unstable. Rising egg prices due to the spread of highly pathogenic avian influenza (AI) and higher import costs for beef due to the strong dollar have combined to increase the burden on restaurants ahead of the Lunar New Year holiday.
The industry says it is considering cost-cutting measures such as reducing the use of expensive materials and supplies or using substitute ingredients, but there are limits to minimizing price increases. The government has asked for cooperation to stabilize prices of processed foods for the Lunar New Year holiday by holding meetings with major food companies and has taken steps such as the emergency release of 2.24 million imported eggs, but observers say there are constraints on controlling external variables such as weather and exchange rates.
A restaurant industry official said, "As dining-out prices have recently risen and demand has fallen, the industry as a whole has been hit, so it is difficult to consider price increases. Even operating winter seasonal menus is being approached cautiously due to cost pressures," and added, "We are watching the situation because cost pressures are a concern even after the Lunar New Year holiday."