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A red light was lit on consumer prices in the second half of the year due to soaring agricultural prices due to geopolitical risks from the Middle East. Concerns have grown that the "double bad news" of soaring energy costs and shopping cart prices at the same time could become a reality.

According to the Ministry of Agriculture, Food and Rural Affairs and the Korea Agro-Fisheries & Food Trade Corporation (aT) on the 11th, the average price of 10 cucumbers in August was 12,144 won, up 56 percent from 7,799 won in June. The price of a cabbage also jumped from 3,691 won in June to 4,287 won in August. 100 grams of spinach more than doubled from 817 won in June to 1890 won in August. Spinach and lettuce have withered or burned leaves when high temperatures continue, resulting in poor marketability and reduced shipments. Cucumber and zucchini are also high temperatures, which can cause poor growth, falling flowers, and malformation.

However, the retail price of cabbage in August is 4,226 won per head, 26% lower than the average year, and the radish is 3,880 won per head, 32% lower, and cabbage is 3,192 won, 23% lower, respectively. However, inflation is likely to spread to other items. This is because the price of leafy vegetables and facility vegetables, which are vulnerable to high temperatures due to the heat wave, is soaring in a short period of time.

Livestock prices are also a problem.

As of the 7th, 901,602 dead livestock were reported to livestock accident insurance due to the heat wave. Of these, 95 percent are poultry such as chickens and ducks. Ahead of Chuseok, fruits such as apples and pears are also likely to rise in product prices if they suffer from poor growth and damage due to high temperatures.

In addition, international oil prices have emerged as an ambush in prices.

As uncertainties surrounding the Strait of Hormuz grow, volatility is expanding, with international oil prices soaring by 5% in one day on the 10th. It has repeatedly fluctuated around $80 per barrel in Brent crude oil, exceeding the government's estimate for the second half of this year ($78 based on Dubai oil). Rising international oil prices can spread not only to gasoline and diesel, but also to other items such as processed food and eating out through transportation and production costs. The Korea Development Institute (KDI) analyzed that a 10 percent rise in international oil prices in May this year could raise consumer inflation by up to 0.2 percentage points.

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The inflation rate seemed to be stably managed as it fell to 2.8% last month, falling to the 2% level for the first time in three months. However, the government predicts that this factor alone will boost consumer price growth by about 0.6 percentage points in August last year, as the base effect of massive discounts on telecommunication fees by some mobile carriers in August last year disappeared. In other words, the return of the inflation rate to the 3% range in August has effectively become a fait accompli.

In this situation, two external variables emerged as additional upward pressure: a surge in international oil prices and a heat wave.

In response, the government plans to manage energy and food prices at the same time. In preparation for supply disruptions from the Middle East, alternative crude oil will be introduced, oil reserves will be restarted this month, while international joint reserves will be expanded and stockpiled early.

Agricultural and fishery products have been operating a special management period for heat waves and droughts since the 7th and have been intensively checking the crop conditions and prices of mountain areas. 15,000 tons of cabbage and 6,000 tons of radish secured in preparation for supply shortages will also be supplied to the market if necessary. Fisheries products that are concerned about high water temperature damage will be supported for early shipment and emergency discharge.

In order to reduce the burden of shopping baskets, 3,838 processed foods such as ramen, instant food, and ice fruit will be discounted up to 57% this month.

Deputy Prime Minister and Minister of Finance and Economy Koo Yoon-chul said at a Cabinet meeting, "In July, prices slowed to 2% for the first time in three months, but in August, upward pressure remains due to the base effect and heat wave caused by temporary discounts on telecommunications fees last year."