Fruit prices fall ahead of Chuseok; meat and seafood costs climb

Processed food, durable goods push up core inflation

Government vows tighter supply management, distribution reforms

Consumer prices rose 2.9 percent in September from a year earlier, pulling the inflation rate back into the 2 percent range for the first time in two months. Petroleum product prices, however, extended their streak of 14-percent-range gains into a second consecutive month, while meat, seafood and processed food costs also accelerated, keeping price pressures elevated. Fruit supply increased ahead of the Chuseok holiday, and government discount support helped push agricultural prices lower.

The consumer price index stood at 120.43 (base year 2020=100) in September, up 2.9 percent from the same month last year, according to data released Friday by the Ministry of Statistics.

Shoppers browse a traditional market in Seoul. [Yonhap]
Shoppers browse a traditional market in Seoul. [Yonhap]

Consumer price inflation climbed from 2.6 percent in April to 3.1 percent in May and 3.2 percent in June in the wake of the Middle East war, before easing to 2.8 percent in July. It rebounded to 3.1 percent in August before falling back into the 2 percent range last month.

The return to the 2 percent range does not necessarily mean inflationary pressure has eased. Stripping out the base effect from SK Telecom's billing discounts following last year's hacking incident, the August inflation rate would have been around 2.5 percent — meaning the underlying rate actually edged higher in September. Consumer price inflation has also remained above the Bank of Korea's 2.0 percent price stability target for roughly six months since the Middle East war began.

By category, agricultural, livestock and fishery prices fell 0.3 percent from a year earlier, shaving 0.03 percentage points off the overall inflation rate. Agricultural prices in particular dropped 4.0 percent, pulling the overall rate down by 0.17 percentage points, though the decline was smaller than in August, when agricultural prices fell 6.7 percent.

Fruit prices fell 10.9 percent, with apples down 9.2 percent, napa cabbage 15.2 percent, peaches 14.7 percent and grapes 10.3 percent. Zucchini bucked the trend, surging 46.9 percent, while overall vegetable prices were flat compared with a year earlier.

"Good harvests for apples and pears led to higher shipment volumes during the Chuseok holiday period, widening the decline in fruit prices," said Lee Du-won, a senior statistics official at the Ministry of Statistics. "Vegetable shipments, on the other hand, fell due to weather conditions, shifting from a 9.7 percent drop in August to roughly flat in September."

Unlike agricultural products, livestock and fishery prices rose 3.7 percent and 4.5 percent, respectively, as reduced supply collided with holiday demand ahead of Chuseok. Processed food prices also climbed 2.1 percent, accelerating as factory-gate price increases filtered through.

Petroleum product prices jumped 14.8 percent from a year earlier, marking a second consecutive month of gains in the 14 percent range after a 14.2 percent rise in August.

The government estimated that without the petroleum price cap, last month's consumer price inflation would have reached 3.5 percent — 0.6 percentage points higher than the recorded 2.9 percent — suggesting the cap helped offset some of the upward pressure from rising global oil prices.

Computer prices surged 27.4 percent, sustaining a streak of gains above 20 percent driven by rising semiconductor prices. Mobile phone prices rose 8.3 percent, boosted by the launch of new Galaxy and iPhone models. The Ministry of Statistics said the widening price increases for durable goods such as computers and mobile phones, along with processed food, contributed to upward pressure on core inflation.

The index excluding agricultural and petroleum products rose 2.7 percent from a year earlier, while the index excluding food and energy — the OECD's standard measure — climbed 2.8 percent.

The living price index, which tracks items consumers purchase frequently, rose 2.5 percent. The fresh food index, a gauge of everyday dining costs, fell 3.3 percent from a year earlier.

The Ministry of Economy and Finance said Friday it would strengthen supply and price management for individual agricultural, livestock and fishery products and continue efforts to improve distribution structures. It added that it would press ahead with stabilizing petroleum prices through the price cap and fuel tax cuts, as well as support for vulnerable households.


y2k@heraldcorp.com