Heat wave adds pressure to Korea’s food prices and inflation outlook

A prolonged heat wave is pushing up food prices in Korea and could make an August inflation rebound stronger than expected, economists said Sunday.

July consumer inflation eased to 2.8 percent, but extreme heat has disrupted supplies and shortened shelf life for vegetables, meat and seafood. Spinach rose 152.3 percent from the previous month, while cucumbers climbed 54.8 percent and zucchini rose 46.6 percent.

The heat has also killed more than 901,000 livestock and more than 864,000 farmed fish, though those losses have not yet produced major price increases. Core inflation rose to 2.6 percent in July, and economists said the government’s oil price cap could keep longer-term inflation pressures unresolved.

The pressures could push consumer inflation back into the 3 percent range in August and strengthen the case for the Bank of Korea to consider another rate hike at its Aug. 27 policy meeting.

Read the full story at The Korea Times.