South Korean Food Makers Raise Prices Amid Middle East Tensions, Won Depreciation
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South Korean food and confectionery companies, including Nongshim, CJ Foodville, and BR Korea, are raising product prices by 5.8% to 6.5% due to increased costs from the Korean won's depreciation and rising oil prices linked to Middle East tensions.
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South Korean confectionary and food makers are increasing product prices due to persistent cost pressure from the Korean won's depreciation and rising oil prices, exacerbated by escalating tensions in the Middle East.
SEOUL, July 24 (Yonhap) -- South Korean confectionary and food makers decided to increase prices of their products amid persisting cost pressure stemming from the war in the Middle East, according to the companies Friday.
Nongshim Co., the producer behind the globally popular Shin Ramyun, decided to increase the wholesale price of products from 43 brands by an average of 5.8 percent starting next month, which included cup noodles, snacks and beverages, the company said.
Following the increase, the retail price of the company's flagship Shrimp Crackers is expected to increase to 1,600 won (US$1.09) from 1,500 won.
It marks the first time in 17 months since the company raised the price of the snack brand.
Nongshim explained the latest price hike was an "inevitable" decision, given worsening business conditions and increasing cost pressures, due to the Korean won's depreciation and rising oil prices amid escalating tensions in the Middle East.
But the company decided to exclude packaged instant "ramyun" from the price hike this time, in an effort to tame inflation, despite it accounting for 63 percent of its sales, it said.
CJ Foodville Co. also said it decided to raise the prices of its bread and cake products sold at the Tous les Jours bakery chain starting July 31 but left out popular items in an effort to ease the burden on consumers.
The latest decision was due to a rise in ingredient prices, such as oil and eggs, as well as other costs, the company added.
BR Korea Co., the local operator of Dunkin' Donuts, will also raise prices of 39 products by an average of 6.5 percent starting Aug. 2, due to rising costs, the company said.
Inflationary pressures have worsened recently amid the won's weakness and increasing oil prices as tensions renewed between the United States and Iran.
Brent Crude futures, the international oil benchmark, topped US$100 per barrel Thursday amid escalating conflict inside the crucial oil waterway of the Hormuz Strait. South Korea is highly dependent on oil imports, with some 95 percent of oil imported from the Middle East transiting the strait.
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Retail price of Nongshim's Shrimp Crackers will increase to 1,600 won.
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BR Korea will raise prices of 39 products by an average of 6.5% starting Aug. 2.
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أسئلة مفتوحة
- Will other South Korean companies follow with price hikes?
- What will be the government's response to rising inflation?
- How long will Middle East tensions continue to impact oil prices?
