Consumer price hikes are showing no signs of let-up, two weeks after the government embarked on a sweeping campaign to fight inflation.
Crop damage from extreme weather conditions combined with the country’s worst animal disease outbreak sent food prices to record high levels, hurting low-and middle-income households preparing for the Lunar New Year holiday this week.
Pork prices jumped more than 28 percent from a year ago after more than three million cattle and pigs were slaughtered since the Nov. 28 breakout of foot-and-mouth disease.
Prices of key crops have risen to the highest level this month. Peas rose 65 percent from last January to 11,602 won per kilogram while red beans jumped 75 percent to 15,712 won per kilogram, Korea Agro-Fisheries Trade Corp. said.
Mung-beans and sweet potatoes, often used for traditional Korean dishes in the holiday season, increased 69 percent to 14,340 won and 31 percent to 4,402 won per kilogram respectively.
The increase is steeper for vegetables. Price of napa cabbages jumped 117.4 percent from a year earlier. Garlic, one of the key crops in long term shortage, rose 12.9 percent from a year ago.
The government announced a package of anti-inflation measures Jan. 13 including cutting tariffs on items such as fish and powered milk and freezing government-controlled prices such as electricity bills and rail transportation fares.
The Bank of Korea also lifted its policy rate by a quarter of a percentage point to 2.75 percent on the same day.
With those measures proving short of neutralizing the impact of international commodities prices, officials said the government will take further measures to tame inflation.
“Prices remained quite volatile this month but we will curb the inflationary pressure sooner than later,” Finance Minister Yoon Jeung-hyun said in an interview Sunday.
Vice Finance Minister Yim Jong-yong said Friday the government is giving particular attention to soaring pork prices.
“The country is suffering a serious shortage of pork in the wake of the foot-and-mouth disease breakout,” Yim said after a weekly meeting of senior officials.
“The Agricultural Ministry is in talks with the National Agricultural Cooperative Federation (Nonghyup) to secure the supply by supporting the local meat processors and increasing the imports.”
Canada’s agricultural minister, Gerry Ritz, on Friday said it will ship more pork to Korea.
Hog futures in Chicago jumped to the highest level in almost six months Wednesday on expectations the FMD outbreak in Korea will boost North American pork exports.
The Finance Ministry has already eliminated the 25 percent tariffs on 60,000 tones of pork through June and is considering increasing the volume.
Fish and chicken prices have also been rising fast reflective of the months-long cold spell.
The average price of a whole chicken jumped 37 percent over the past month to 2,200 won, according to the Korea Poultry Association.
Agricultural Minister Yoo Jeong-bok Friday said he will quit his post to take responsibility for the worst outbreak of animal diseases.
A recent study about the global food and farming by a group of 400 experts from 35 countries concluded that production growth would fall significantly short of rising demand for food.
The U.K.-based think tank Foresight concluded that the real prices of key crops are set to rise by 50 to 100 percent during the next 40 years.
“Failure to control inflation, which directly affects ordinary people’s lives, will deal a serious blow to President Lee and his Grand National Party,” Kang Won-taek, a Seoul University professor, was quoted as saying.
“Positive macroeconomic data means nothing to people who are already complaining about how hard it is to make a living.”
By Cynthia J. Kim (firstname.lastname@example.org