Korean households consume some 2 million tons of kimchi per year, making the fermented side dish’s ingredients key factors in the nation’s price index ― especially during the kimchi-making season in late fall and early winter.
In consideration of the kimchi crises that have jolted the domestic economy over the past few years, the Ministry of Agriculture, Food and Rural Affairs has recently introduced the “kimchi index.”
The kimchi index, indicating the costs of 13 key ingredients such as cabbage, salt, dried red pepper powder, and peeled garlic, was 91.3 this month, which was the lowest level since 2009, according to officials.
In comparison, the index in October 2010, when the nation’s cabbage skyrocketed in price, was 152.6.
The average cost of making kimchi for a family of four was 195,000 won ($182) this month, with that budget rising by 28 won for every 100 won increase in cabbage prices, data showed.
The idea was triggered by complaints that the conventional consumer price indexes did not properly reflect the reality of the market, especially for households purchasing kimchi ingredients in large quantities.
“Kimchi is a comprehensive, finished product made of several price-sensitive agricultural ingredients,” said an official of the Korea Rural Economic Institute. “If the government attempts to control the kimchi cost by manipulating the price of one or two ingredients, it will only lead to a distortion of the market.”
Until now, Statistics Korea analyzed kimchi prices as part of regular consumer price research, but it had only considered the consumer price of mass-produced kimchi, not homemade kimchi.
“It is a global trend to manage the food production system comprehensively,” said Kwon Seung-ku, professor of the Food Industry Administration at Dongkuk University.
“The food price index may no longer rely on the cost of individual ingredients.”
Experts, however, also added that it would take considerable time before the new kimchi index became useful to actual consumers.
