Processed food price contribution, before petroleum… Ramen and increase in dairy predicted one after the other
Last month, the price of most processed food items, such as cooking oil and flour, rose from a year ago.
In addition, 7 out of 10 products rose from a month ago, and the price of processed foods continued to rise, and their contribution to overall prices was higher than petroleum products.
According to the National Statistical Portal (KOSIS) of the National Statistical Office on the 7th, the processed food price index last month was 113.18 (2020 = 100), up 9.5% from the same month last year.
This is the biggest increase since May 2009 (10.2%).
Item by item, 70 out of 73 items increased from a year ago.
The highest rates of increase were seen in cooking oil (42.8%), wheat flour (36.9%), pancake flour (30.8%), noodles (29.7%), and starch syrup (28.9%).
Only three items: baby food (0.0%), lactic acid bacteria (-2.0%), and fruit wine (-3.3%) did not increase in price compared to a year ago.
Compared to a month ago, 54 items increased out of 73 items.
That’s about 7 out of 10.
Cheese (11.0%), ramen (8.9%), cereal (8.1%), soymilk (8.0%), and snack foods (8.0%) rose sharply.
Processed food prices rose 1.6% from the previous month, the biggest increase since March (1.7%).
[표] Highest growth rate by processed food item
│ Compared to 1 year ago │ Compared to the previous month │
│ Item │ Rate of Increase (%) │ Item │ Rate of Increase (%) │
│ Cooking oil │ 42.8│ Cheese │ 11.0│
│ Flour │ 36.9│ Ramen │ 8.9│
│ Pancake flour │ 30.8│ Cereal │ 8.1│
│ Noodles │ 29.7│ Soymilk │ 8.0│
│ Starch syrup │ 28.9│ Snacks │ 8.0│
│ Cheese │ 27.9│ Kimchi │ 7.6│
│ Kimchi │ 25.3│ Red Ginseng │ 7.5│
│ Cereal │ 24.4│ Pie │ 5.9│
│ Jam │ 21.2│ Miso │ 5.8│
│ Masal │ 20.3│ Gochujang │ 5.7│
※ Source: National Statistics Portal (KOSIS), Statistics Korea
As the price of international raw materials such as grain, palm oil and crude oil has risen, it affects the price of processed food.
The World Food Price Index published by the Food and Agriculture Organization of the United Nations (FAO) reached its highest level (159.7) in March due to the war between Russia and Ukraine, a major grain exporter.
The price of palm oil, which is used as a raw material for processed foods such as cooking oil, has risen dramatically in the first half of this year due to Indonesia’s ban on the export of cooking oil.
As food companies deplete raw material inventories and import new ones, there is a lag of one to two quarters between the rise in international raw material prices and consumer product prices.
Processed food, once the price rises, does not fall easily, so it can continue to affect the overall price increase.
The contribution of the price of processed foods to the total price increased from 0.36 percentage points in January to 0.75 percentage points in September and 0.83 percentage points in October.
The contribution of petroleum, which was the catalyst for consumer price inflation, increased from 0.66 percentage points in January to 1.74 percentage points in June, then decreased to 0.75 percentage points in September and 0.42 percentage points in October.
The contribution of the price of processed food, which is also an industrial product, began to exceed that of petroleum.
In the midst of this, the food industry is once again predicting a rise in prices.
From the 7th of this month, Samyang Foods raised the prices of 13 brands, including Buldak Fried Noodles and Samyang Ramyun, by an average of 9.7%, and Paldo announced that it would raise the factory price of eight drinks, including Birac Sikhye and Pororo , at an average of 7.3% this month.
Recently, as dairy farmers and the dairy industry decided to raise the base price of crude oil 49 won per litre, the price of not only dairy products but also bread and ice cream that use them is expected to rise one after the other.
In the Consumer Price Trend in October, the Ministry of Strategy and Finance said, “Given the continued upward pressure on food prices, we intend to focus our policy capabilities on stabilizing the price of shopping carts, such as reducing food price increases after to process. “We intend to continue discussions such as industry meetings by sector,” he said.