Ramyeon prices could jump even higher as India hoards wheat
Bread and ramyeon are about to become more expensive as India, the world's No. 2 wheat producer, prohibits exports.
Korea imports most of its wheat from overseas, making the country extremely sensitive to international price changes.
India prohibited wheat exports from Friday as the Russia-Ukraine war disrupted supply of the commodity and a heatwave hit the country.
In response to supply disruptions, India exported 1.4 million tons of wheat last April, 20 percent of annual exports in a month, according to CNN.
The Korean government warned on Sunday that the country should remain "vigilant about the impact the export ban may have on the global wheat supply and price if the situation continues."
Out of the 3.34 million tons of wheat that were imported to Korea in 2020, wheat for milling was mostly from the United States, Australia and Canada, while most of that for animal feed was brought from Ukraine, the United States and Russia, according to the Ministry of Agriculture, Food and Rural Affairs.
The surge in international wheat prices directly affects domestic inflation.
According to the Korean Statistical Information Service (Kosis), the price increase of processed foods was 7.2 percent in April on year, above the consumer price index increase of 4.8 percent on year.
Wheat-based product prices were especially out of control.
The price of noodles increased by 21.9 percent and that of flour for pan-frying rose by 21.2 percent, according to Kosis.
Wheat futures surged by 73.9 percent in March on year, up to $407 per ton, according to Nonghyup Economic Research Institute.
The World Bank forecasts wheat prices will increase more than 40 percent this year.
The Korean government expects the impact on supply will be limited in the short term considering the low amount of wheat imported from India and current inventories.
According to the Ministry of Agriculture, Food and Rural Affairs, the country currently has inventories of milling wheat that will last through early August. Feed wheat stocks will be available until early October.
Agriculture Minister Chung Hwang-keun said on Sunday that the ministry is planning to "cooperate with the related industry and experts to check on the international grain market and also draw up long-term measures to secure a stable supply chain and domestic self-sufficiency of grains."
"We do not need to worry much right now, but if the Middle East and European countries that import wheat from India turn their eyes to countries such as Australia and the United States, it will be difficult for Korea to source wheat and the price will escalate as well," an industry insider said.
BY KIM NAM-JUN, CHO JUNG-WOO [firstname.lastname@example.org]