The unusually heavy rains and typhoons of the past two months caused prices of fresh produce to rise by the steepest pace since April, the central bank said Friday.
Producer prices of fresh vegetables and fruits advanced 6.6 percent in August from a year earlier, signaling rapid price increases in processed food and dine-out costs in the coming months. The on-year Producer Price Index for August hit the highest level since a 6.8 percent expansion in April. The figure for this year peaked at 7.3 percent in March and declined until June, before accelerating again due to weather-related losses from July onwards.
One of the heaviest downpours left crops sitting dead in fields. Vegetable prices more than tripled in August due to sharply reduced supply. Inflation rate hit a three-year high of 5.3 percent in August after exceeding the government’s target range of 2 to 4 percent for the entire this year.
The prices of industrial goods advanced 8 percent from August last year, affected by the weather and lost processing facilities. The August prices of agricultural and fishery goods jumped 12.5 percent from a year earlier, jumping further from a 12.1 percent growth in July.
The Finance Ministry attributed the fast price increase of August to one-off factors such as farm product shortages and gold price hikes.
“We expect that it will go down to around 4 per cent after the Chuseok holiday as the prices of vegetables and fruit are likely to stabilize and the recent oil price fall will also be reflected,” Yoon Jong-won, director general of the Ministry of Strategy and Finance’s economic policy bureau said.
By Cynthia J. Kim (email@example.com