🚨 Hot Weather Food Price Surge
Today Korean Economic News for Beginners | 2025.08.06
0️⃣ Spinach Up 78%, Young Radish Up 57%, Living Price Index Rises 2.5%
📌 Heat waves and heavy rains hurt vegetable production, fruits, processed foods, and restaurant prices all rising
💬 Record-breaking heat waves and heavy rains in July caused vegetable prices to jump, making grocery shopping much more expensive for consumers. Spinach prices went up 78.4% in one month, young radish increased 57.1%, and lettuce rose about 30%. Fruit prices also climbed with grapes up 15.2% and watermelon up 12.8%. The living price index rose 2.5% compared to the same month last year, pushing up the prices people actually feel. Processed foods and restaurant meals continue to get more expensive too, showing a "sticky inflation" pattern. The government is trying to help by releasing more stored vegetables like cabbage, radish, and onions, and giving out discount coupons for agricultural products. However, climate change is expected to keep making food prices unstable.
1️⃣ Easy Explanation
Have you noticed grocery shopping getting more expensive lately? The extreme heat and heavy rain in July made vegetable prices go way up. Summer vegetables like spinach, young radish, and lettuce got much more expensive, hitting family budgets hard.
Let me explain why vegetable prices went up so much. July had some of the hottest weather ever recorded, with temperatures staying above 35°C (95°F) for many days. At the same time, there were sudden heavy rainstorms, creating terrible growing conditions for vegetables.
Extreme heat stops vegetables from growing properly, and heavy rain destroys crops that were already growing. This means much fewer vegetables made it to the market, so prices shot up. That's why spinach prices jumped 78.4%.
The problem isn't just vegetables. Fruits also suffered from the heat and rain. Grapes went up 15.2% and watermelon increased 12.8%. Since these are popular summer fruits, it puts a big burden on families.
What's even more serious is that processed foods and restaurant meals keep getting more expensive too. Bread, snacks, instant noodles, and restaurant food like chicken, pizza, and Korean meals are all costing more. For restaurants, 38 out of 39 food items got more expensive (only pizza stayed the same).
This situation is called "sticky inflation." Once prices go up, they don't come back down easily. This is especially true for restaurant food and processed foods, which tend to keep higher prices even when ingredient costs stabilize.
The government is trying to help solve this problem. They're releasing more stored vegetables like cabbage, radish, and onions from government reserves, and giving out discount coupons for agricultural products. But climate change is making it harder to grow food consistently, so this problem will likely continue.
The bottom line is that our food prices are directly connected to weather, and as climate change becomes normal, keeping food prices stable gets much harder.
2️⃣ Economic Terms
📕 Living Price Index
The living price index measures price changes for everyday items that consumers buy frequently.
- It covers 142 items like rice, cabbage, and pork that people buy regularly.
- It reflects how expensive life feels better than the general consumer price index.
- A 2.5% increase means the same items cost 2.5% more than last year.
📕 Supply Shock
A supply shock happens when the amount of available goods suddenly drops, causing prices to jump.
- Natural disasters, climate change, and wars are common causes.
- When demand stays the same but supply drops, prices must go up.
- The vegetable price surge is a perfect example of supply shock.
📕 Sticky Inflation
Sticky inflation means prices that went up don't come back down easily.
- This often happens with restaurant food, services, and processed foods.
- Even when ingredient costs stabilize, businesses don't lower prices because of fixed costs like rent and wages.
- This is why consumers don't feel price relief even when costs should be going down.
📕 Agricultural Reserve System
This is a government system that buys and stores important crops to help stabilize prices.
- The government buys crops when prices are low and stores them.
- When prices get too high, they release these stored crops to bring prices down.
- Main crops include cabbage, radish, onions, garlic, and potatoes.
- However, fresh vegetables spoil quickly, so this system has limits.
3️⃣ How It Works and Economic Outlook
✅ How Climate Change Affects Food Prices
Let's look at how climate change is structurally affecting food production and prices.
First, extreme weather events are happening much more often and greatly affecting farm productivity. Extreme weather like July's combination of heat waves and heavy rain used to be rare but now happens much more frequently. When temperatures go over 35°C (95°F), vegetables can't photosynthesize properly and their leaves wilt, greatly reducing harvest amounts. Meanwhile, sudden heavy rains rot roots or wash away soil, destroying crops that were already growing. Spinach prices going up 78.4% shows this double impact.
Second, agricultural supply is very inflexible, so even small production changes cause big price swings. Farm crops take a long time from planting to harvest, and you can't suddenly produce more or less. Leafy vegetables grow relatively quickly but are very sensitive to weather - even small weather problems can greatly reduce harvests. Economists call this "low supply elasticity," meaning even if supply drops just 10%, prices can jump 30-50%.
Third, climate change is disrupting regional farming specialization. Korea has different regions that specialize in different crops - Gangwon Province for potatoes and cabbage, Jeollanam Province for onions, and Jeju Island for citrus fruits. But climate change is making growing conditions worse in these traditional farming areas, making the whole supply chain unstable. For example, even Gangwon Province's highland areas, which grow summer cabbage, are being affected by heat waves, forcing kimchi makers to rely more on imported cabbage.
Climate change isn't just a natural phenomenon - it's changing the entire structure of food pricing, so we need new production and distribution systems.
✅ Why Restaurant and Processed Food Prices Keep Rising
Let's examine how rising ingredient costs get passed on to final consumer prices.
First, food processing companies with high ingredient costs are getting hit directly. Companies making kimchi, salads, and ready-to-eat meals have no choice but to absorb rising vegetable costs. When spinach prices go up 78%, the production costs for spinach side dishes and frozen foods increase dramatically. Small food companies can't handle these cost increases and respond by raising product prices or reducing package sizes. This "shrinkflation" (keeping prices the same but making products smaller) is part of this trend.
Second, restaurants face both rising ingredient costs and higher labor costs at the same time. When vegetable prices go up, restaurants have to raise menu prices, but they're also dealing with minimum wage increases and staff shortages that push up labor costs. Korean restaurants are especially affected because the side dishes they serve for free (like vegetable dishes and kimchi) cost much more to make. The fact that 38 out of 39 restaurant items got more expensive shows these combined pressures.
Third, "asymmetric price transmission" makes things worse for consumers. When ingredient costs go up, final prices rise quickly, but when ingredient costs go down, final prices drop much more slowly. This happens because companies don't like to lower prices once they've raised them, and because fixed costs like rent and wages keep going up. This is why consumers feel price increases quickly but don't feel price decreases.
Price increases that start with agricultural products spread to food processing and restaurants, creating inflation pressure across daily life.
✅ Government Response: What Works and What Doesn't
Let's analyze how effective current government price stabilization policies are and how they could be improved.
First, releasing stored agricultural products helps stabilize prices short-term but has limits. When the government releases stored cabbage, radish, and onions to the market, it can temporarily slow price increases. But there's only so much in storage, and fresh vegetables like spinach and lettuce spoil quickly so they can't be stored effectively. Also, if supply shortages from climate change continue structurally, releasing reserves alone can't solve the fundamental problem. The government recognizes these limits and is also pursuing long-term solutions like expanding smart farms and developing new crop varieties.
Second, discount coupons and vouchers directly help reduce consumer burden. Giving out agricultural product discount coupons or essential goods vouchers can reduce families' food costs. Especially when focused on low-income families, this helps soften the social impact of rising prices. However, these policies are temporary fixes and cost the government money, so they're not sustainable long-term. More importantly, we need structural solutions that increase supply capacity itself.
Third, long-term agricultural production innovation is essential. To respond to climate change, we need new farming technologies like smart farms, vertical farms, and climate-adapted crop varieties. We also need to improve agricultural distribution systems to reduce inefficiencies between producers and consumers. Appropriately increasing dependence on imported agricultural products for supply diversification is also important. However, these policies take considerable time to show results, so we need to balance short-term and long-term measures.
For price stability, we need to go beyond emergency responses to fundamental improvements in agricultural productivity and distribution innovation.
4️⃣ Conclusion
July's vegetable price surge vividly shows how climate change directly affects our daily living costs. The 78% increase in spinach and 57% increase in young radish aren't just seasonal fluctuations - they're signals of structural change.
The core of this price increase is climate factors. Heat waves and heavy rains happening at the same time dealt a direct blow to vegetable production, and this was immediately reflected in consumer prices. Agricultural products are hard to store and have limited substitutes, so even small supply disruptions cause big price increases.
What's more worrying is that this extreme weather isn't a one-time event. Climate change is making extreme weather like heat waves, heavy rain, and droughts happen more often, so agricultural price volatility will likely increase. We can no longer say "the weather was just unusually bad this year."
The fact that processed foods and restaurant meals are also rising is noteworthy. Rising ingredient costs are spreading to final consumer goods, expanding the ripple effects of inflation. Due to "sticky inflation" characteristics, prices that go up once are unlikely to come back down easily.
Government responses also have limits. Releasing stored agricultural products or giving discount coupons has short-term relief effects, but doesn't solve the fundamental cause of climate change. Moreover, fresh vegetables spoil quickly so storage itself is difficult, limiting policy tools.
Long-term, innovation in agricultural production methods is unavoidable. We need advanced farming technologies that can adapt to climate change, like smart farms and vertical farms, plus development of climate-adapted crop varieties. Improving distribution systems to reduce margins between producers and consumers is also important.
From consumers' perspective, we need to adapt to a new environment with greater price volatility. We need wisdom to reduce food costs through seasonal produce-focused diets, using frozen and dried agricultural products, and comparison shopping.
Ultimately, this price increase may be the start of a "new normal" we'll face in the climate change era. It's time for comprehensive responses including short-term measures along with agricultural innovation, distribution improvements, and changes in consumption patterns.
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