Food prices outpace most of OECD

Food prices rose at the second-highest rate among Organization for Economic Cooperation and Development (OECD) members in 2011, mainly due to unfavorable weather conditions, a report showed yesterday.

The report by the Paris-based organization showed the country’s food prices jumping an average 7.9 percent in the January to November period, with only Estonia’s growth being steeper at 9.9 percent.

Korea’s consumer prices rose 4 percent on-year in 2011, which is the fourth-highest gain after Turkey, Estonia and Poland. Turkey’s inflation rate hit 6.3 percent.

Cold weather, floods and other developments affected output of various fresh vegetables, the OECD said, adding that a rise in international crude prices exerted upward inflationary pressure.

Related to the hike in prices, the Hyundai Research Institute, a local private think tank, said because of the country’s small size and relative shortage of arable land, Korea’s food prices generally rise at a faster pace compared to other OECD countries.

While inflationary pressure may begin to subside this year, the forecast of slower economic growth could negatively influence consumers, said the think tank.

The Bank of Korea predicted consumer prices will drop a 0.7 percentage point from the previous year to 3.3 percent in 2011.

Yonhap