South Korean food prices rise amid surging raw material costs

Rising global prices for essential raw materials, including wheat, sugar, and edible oils, are driving a wave of price increases across the South Korean food industry. According to the Korea Agro-Fisheries & Food Trade Corporation, wheat prices on the Chicago Board of Trade have surged by 41% compared to last year, reaching a three-year high. This spike is attributed to shipping disruptions in the Black Sea due to the Russia-Ukraine war, extreme weather conditions in Europe, and supply concerns linked to El Niño.

In response to rising costs, several major companies are adjusting their pricing. Haitai Confectionery is set to increase prices on 25 brands, including Oh Yes and Homerun Ball, by an average of 7.8% starting next month. Some products will also see weight reductions, a practice known as shrinkflation. Woongjin Foods is also implementing price hikes of approximately 7% on about 20 beverage items, such as Morning Sunlight and Green Plum juice.

Other industry players, including CJ CheilJedang, Nongshim, and Samlip, have already implemented various price adjustments for staples like rice, noodles, and bread throughout the summer. While a recent decline in the KRW-USD exchange rate has provided some relief, industry experts suggest that the rising costs of raw materials, international oil prices, and logistics will likely continue to pressure consumer prices in the near future.