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South Korea’s food inflation ranks third highest among OECD countries

Vaseline 3 months ago

ANN/THE KOREA HERALD – Food prices in South Korea rose to 6.95 percent in February, ranking third among the Organization for Economic Co-operation and Development (OECD).

Korea ranks third among the 38 member states in food and beverage inflation, behind Turkiye at 71.12 percent and Iceland at 7.52 percent in the latest OECD report in February.

This is the first time in over two years that Korean food inflation has exceeded the OECD average since November 2021, currently recorded at 5.32 percent.

The global rise in food prices started after the invasion of Ukraine in February 2022, exacerbated by high energy prices and severe drought damage.

As a result, the average increase in food prices in OECD countries, which was below five percent in 2021, rose to 16.19 percent in November 2022.

Since then, interest rates have quickly returned to normal, falling below 10 percent in July of the previous year and reaching levels of around 5 percent in February, similar to the period just before the invasion of Ukraine. However, after falling to 3.81 percent last July, Korean food inflation has risen again, consistently staying within the five to seven percent range since October 2023, and rising above the OECD average in February.

Analysts estimate that the increase in domestic food prices was mainly caused by increases in the prices of fruits such as apples and pears. Apple prices rose 88.2 percent last month, the biggest increase since January 1980, when official statistical reporting began.

To stabilize fruit prices, the government introduced a quota tariff on 21 fruit categories, including bananas and mangoes, in January.

In addition, the measure was expanded in April to include another eight categories, such as kiwis and cherries.

The government has expanded the distribution of Korea Agro-Fisheries and Food Trade Corporation (aT) directly imported fruits, allowing consumers to purchase imported fruits at more affordable prices.

Since April 4, these fruits have been delivered to more than 12,000 areas across the country at a discounted rate of 20 to 30 percent, the aT announcement said.

Customers at a supermarket in Seoul, South Korea. PHOTO: THE KOREA HERALD