"It is true that the burden of raw material prices and logistics costs has grown due to the impact of conflicts in the Middle East and other factors."
Nongshim CEO Jo Yong-cheol made the remark at a press briefing in May marking the 40th anniversary of Shin Ramyun, when asked about plans to raise prices. At the time, the company stopped short of announcing specific plans — but it has since decided to raise prices on 18 cup ramyun products, including Yukgaejang Sabal Myeon and Shin Ramyun Cup, by an average of 6.0 percent starting in August.
The ramyun industry says sustained increases in raw and subsidiary material costs have placed an ever-growing burden on production. The prolonged war in the Middle East has driven naphtha prices — a key input for packaging materials — up more than 20 percent. Prices for major ingredients such as wheat and palm oil have also continued to climb. Rising exchange rates and high oil prices have compounded the pressure on manufacturing costs.
The industry cut prices in March in line with the government's price-stabilization drive — the first reduction in two years and nine months since June 2023. Nongshim, Ottogi, Samyang Foods and Paldo lowered prices on select ramyun products by up to 14.6 percent. At the time, the companies said they had decided to cut prices "to join the price-stabilization effort in response to recent changes in the domestic and international environment, and to fulfill our social responsibilities as companies, even as various difficulties continue to mount from a business perspective."
Since those cuts, however, the burden from raw material prices, exchange rates and logistics costs has continued to grow. According to the Food Industry Statistics Information system, corn prices rose 6.06 percent from the start of the year and 13.2 percent from the previous month. Palm oil prices climbed 18.0 percent from the start of the year, while soybean oil surged 54.7 percent. According to Hana Securities, a 10 percent increase in subsidiary material costs would generate more than 2 billion won ($1.36 million) in additional monthly expenses.
Despite the rising cost burden, ramyun makers other than Nongshim are drawing a clear line against immediate price increases. They say consumer price pressures remain significant and the government's price-stabilization stance has not changed, making it difficult to raise prices hastily. Samyang Foods plans to secure profitability through overseas sales expansion. With exports already accounting for more than 80 percent of its revenue, the company's strategy is to focus on growing exports rather than raising domestic prices.
"It is true that cost pressures have grown due to exchange rates, rising raw material prices and high oil prices," an industry official said. "However, given that we must weigh consumer burden and market conditions comprehensively, it is not easy to make a quick decision on whether to raise prices."
siuu@heraldcorp.com
