Instant noodle and snack prices to tumble

Nongshim's Shin Ramyun and Shrimp Cracker are displayed at a supermarket in Korea. On Tuesday, the company announced price cuts for the two products from July. [YONHAP]

Korean food makers Nongshim and Samyang Foods are lowering prices on instant noodle and snack products from July, in a landmark bow to the government's pressure to contain living costs amid inflation.

Nongshim announced on Tuesday the wholesale prices of Shin Ramyun would be reduced by 4.5 percent and Shrimp Cracker by 6.9 percent.

Consequently, the price of a pack of Shin Ramyun, currently sold for 1,000 won ($0.77) at stores, is expected to be reduced by 50 won. Similarly, Shrimp Cracker, an all-time favorite among Korean snackers, which is priced at 1,500 won, will see a decrease of 100 won.

Shortly after, Samyang Foods announced on Tuesday it will gradually cut the prices on its range of 12 key products, including the popular Samyang Ramen, starting from July 1. On average, customers can expect a decrease of 4.7 percent across the product lineup.

The specific adjustments include a 4 percent discount on Samyang Ramen, reducing the price from 3,840 won to 3,680 won for a 5-pack multi-product sold at large supermarkets. The price of Jjajjaroni will drop by 5 percent, bringing it down from 3,600 won to 3,430 won for a 4-pack product, and the discount for Yulmu Bibimmyeon will see a 15 percent reduction from 3,400 won to 2,880 won for a 4-pack product.

The moves by Nongshim and Samyang Foods are seen as a direct response to the finance minister's call to address the issue of high prices of ramyeon (instant noodles) — a representative of a daily food item. Choo addressed the issue of ramyeon prices in a TV program on June 18, pointing out that "companies had increased the price of ramyeon significantly in September and October last year, while the current global wheat prices have decreased by approximately 50 percent compared to that period," expressing that companies would "adjust the ramyeon prices accordingly."

In line with this, the government on Monday held a meeting with major domestic milling companies, including Daehan Flour Mills, CJ CheilJedang and Samyang Foods, urging them to lower the price of flour, which could further enable adjustments to the cost of ramyeon products. In response, the companies said they will consider reducing flour shipping prices starting in July.

"The price of flour supplied by domestic milling firms is expected to decrease by 5 percent from July," Nongshim stated Tuesday. "This reduction in costs is projected to lead to annual savings of approximately 8 billion won for the company, while consumers are expected to benefit over 20 billion won in savings annually from the price reduction."

Other major ramyeon producers in the industry are also contemplating price reductions.

"We are considering price reductions for our major ramyeon products in July, although the exact percentage of reduction has not been determined yet," an Ottogi spokesperson said.

Likewise, Paldo stated that they are currently internally assessing potential adjustments to their product prices.

According to the Food Information Statistics System provided by the Korea Agro-Fisheries & Food Trade Corporation, the global price of soft red winter wheat experienced a decline of 34.6 percent from the same month last year, with the current price per ton coming to $242.75 in June.

Following the lead of ramyeon companies' price reductions, the flour industry's move to lower wheat flour prices might pave the way for price cuts in other sectors of the food industry including bread and snacks, which also use wheat as a crucial ingredient.

This is not the first time that the government called for price reductions for specific food products.

In February, Minister Choo urged "active cooperation" from the liquor industry when there were indications of possible price increases in soju due to the escalating cost of its main ingredient, ethanol. As a response, major players in the industry, such as HiteJinro, Lotte Chilsung Beverage, and Oriental Brewery, promptly announced their decision to temporarily freeze the price of soju.

BY SEO JI-EUN [seo.jieun1@joongang.co.kr]