Early Heat Wave Deepens Korea’s ‘Heatflation’ as Food Prices Climb

News from around the world is running hot. International oil prices have swung sharply since the U.S.-Iran war, and the Korean Peninsula has been hit by unusually early summer heat. Seoul issued its first heat-wave advisory of the summer on July 18, 12 days earlier than last year. After surging fuel costs, unusually high temperatures are adding another source of inflation pressure. So-called heatflation is no longer a distant threat. Extreme heat is already disrupting crop growth and killing livestock, driving up food prices.

Prices for agricultural, livestock and fishery products have been rising quickly. According to Dabom, a livestock distribution information service, the nationwide average retail price for a 10-pack of extra-large eggs was 5,222 won ($3.78) this month, up 38.6% from a year earlier. It was the first time the price had exceeded 5,000 won. Chicken prices have also risen nearly 20% as demand for summer health foods increases. Supply has been reduced by last winter’s outbreak of highly pathogenic avian influenza, with a recent spell of extreme heat adding to the strain. In Seoul’s major commercial districts, a bowl of samgyetang now costs more than 20,000 won ($14.46), making even a single meal out feel burdensome. Prices of key ingredients including green onions, lettuce and mackerel are also climbing steeply.

The pressures on inflation are broad-based. High oil prices are pushing up logistics and production costs, adding to wider inflationary pressure. Climate change is compounding the problem and adding volatility to food prices. The Ministry of Agriculture, Food and Rural Affairs has formed a task force to stabilize supply and demand, while the Ministry of Oceans and Fisheries has started releasing government seafood stockpiles. But those measures have struggled to keep pace with falling output in producing regions. Supply shocks tied to climate change are becoming a structural problem that temporary steps will find difficult to solve.

July and August are set to be a critical period for consumer prices. If the monsoon season overlaps with extreme heat, supply disruptions in agricultural, livestock and fishery products could become much more severe. As household budgets come under greater strain and food costs keep rising, the burden felt by consumers will only intensify. It is already a suffocating season. This summer, the bigger worry may be not the soaring temperatures but the surging cost of food on the table.

Ahn Jung-rak, Korea Economic Daily editorial writer jran@hankyung.com