Agricultural prices drop 6.7% year-on-year in August, steeper than July's 2.2% decline; cabbage and tomato prices ease while rice rises on last year's lower output; livestock inflation slows sharply ahead of Chuseok as government expands discount support

This image is unrelated to the article. [Getty Images Bank]
This image is unrelated to the article. [Getty Images Bank]

Farm produce prices fell 6.7% from a year earlier in August, extending a decline for a second consecutive month despite heat waves and heavy rain. The pace of decline accelerated sharply from July's 2.2% drop. Cabbage and tomato prices eased, while rice bucked the trend and rose due to last year's lower output.

The Ministry of Agriculture, Food and Rural Affairs said Wednesday that the Ministry of Statistics' August consumer price index survey showed agricultural prices down 6.7% from the same month a year ago. Combined agricultural and livestock prices fell 3.5% over the same period, while overall consumer prices rose 3.1%.

Crop conditions remained favorable for most items despite recent rain and heat waves, keeping prices low. The year-on-year change in agricultural prices stood at 0.9% in January, then swung to minus 1.4% in February, minus 5.6% in March, minus 5.2% in April and minus 0.8% in May. Prices turned positive again in June at 1.1%, before falling 2.2% in July and accelerating to a 6.7% decline last month.

Cabbage and tomato prices fell. The Ministry of Agriculture, Food and Rural Affairs said it is working to ease the burden on farmers through discounts on agricultural inputs and is pursuing measures to boost consumption, including shipment adjustments, dedicated sales counters and promotional events.

Rice prices, by contrast, rose on the back of last year's production shortfall and other factors. After declining steadily since January, rice prices have held roughly flat since July 2 at around 61,000 won ($44) per 20 kilograms. The ministry said it plans to monitor rice price trends and ease the burden on consumers through discount support.

Livestock price inflation also slowed sharply. Livestock prices rose 1.5% year-on-year last month, down from 4.4% in July and 6.2% in June — a two-month consecutive slowdown. Although supply constraints caused by animal disease had kept prices elevated, large-scale discount events and a recovery in output helped narrow the increase.

Beef prices remain somewhat elevated, weighed down by a decline in the number of cattle being raised and available for slaughter, reduced output from exporters such as the United States, and a high exchange rate. The government said it plans to work with producer groups on discount support to lower the cost of buying domestic beef for consumers.

Egg prices had been running high due to supply shortages stemming from animal disease, but farm-gate prices have begun to fall as output recovered last month. The ministry said it will continue supplying imported fresh eggs through the Chuseok peak season and will also push for lower delivery prices.

Processed food and dining-out prices rose 1.5% and 2.7% year-on-year, respectively. Accumulated production cost pressures — including higher raw material, packaging, fuel and exchange rate costs since the Middle East war began — have led some processed food companies to raise their factory prices. The government said it is pursuing tax and financial support to ease raw material procurement costs, along with discount and promotional campaigns.

Park Jeong-hun, director general for food policy at the Ministry of Agriculture, Food and Rural Affairs, said the ministry will closely monitor supply and demand conditions and respond swiftly to any price instability to ensure the current stable trend in agricultural and livestock prices continues through the Chuseok holiday. "We will do our utmost to ease the burden on people's food costs through expanded supply of key seasonal goods and discount support," he said.


adastra@heraldcorp.com