Breaking: Won Sends Imported Food Prices Climbing in South korea as Global Food Costs Rise
Table of Contents
- 1. Breaking: Won Sends Imported Food Prices Climbing in South korea as Global Food Costs Rise
- 2. What this means for consumers and policymakers
- 3. every 1 % depreciation translates into roughly 0.8 %-1 % higher cost for imported commodities priced in USD,Euro or CNY.
- 4. How the Weak Won is Driving Imported food Prices higher
- 5. 1. Exchange‑Rate Dynamics Behind the Surge
- 6. 2. Food‑Category Price Indexes – What the Numbers Show
- 7. 3. Supply‑Chain Pressures Amplifying Costs
- 8. 4. Real‑World Effects on Korean Consumers
- 9. 5. Government & Industry Responses
- 10. 6. Practical Tips for Consumers
- 11. 7. Forecast Outlook (2026-2028)
- 12. 8. Key Takeaways
New official data show steep increases in South Korea’s prices for major imported agricultural goods, with the weak won amplifying gains against the U.S. dollar. The Bank of Korea tracks a clear currency effect that’s boosting the cost of staples like coffee, beef, pork, and seafood for consumers and businesses alike.
In November, the central bank’s import price index for coffee stood at 307.12 in U.S. dollar terms and 379.71 in won terms, using 2020 as the base year. Analysts say global coffee prices have roughly tripled over the past five years, and the rise is even sharper when calculated in won.
Other key commodities show similar dynamics. imported beef prices rose about 30% in dollar terms but jumped roughly 60.6% when measured in won. Imported pork gained around 5.5% in U.S. terms yet surged about 30.5% in won terms. By contrast, imported fresh seafood slipped 11% in U.S. dollars, yet climbed 10% when expressed in won, underscoring the currency’s impact on domestic costs.
The won’s depreciation has accelerated in recent years. The currency traded near 1,100 won per dollar in 2021, drifted into the upper 1,200s in 2022, and averaged about 1,450 won per dollar by late 2025’s fourth quarter. That tilt magnifies the local price tags of foreign-sourced goods, even as global prices move in different directions.
Choi Chul, a professor of consumer economics at Sookmyung Women’s University, notes that the trend reflects a two-fold dynamic: climate-driven rises in domestic agricultural prices and stronger import costs driven by exchange-rate movements. “As domestic prices for agricultural products climb due to climate factors, higher import costs driven by the currency’s weakness push up overall food prices, including processed products,” he said.
| Commodity | Change in USD terms | Change in KRW terms |
|---|---|---|
| Coffee | Roughly +3x over five years (global terms) | Approximately +4x when converted to won |
| Beef (imported) | About +30% | About +60.6% |
| Pork (imported) | About +5.5% | About +30.5% |
| Fresh seafood (imported) | Down 11% | Up 10% |
| Currency trend (won per dollar) | Historically around 1,100 in 2021; 1,200s in 2022 | 1,450 average by Q4 2025 |
Industry observers say the convergence of rising global prices and a weakening won signals inflationary pressure across the food sector, affecting households, retailers, and restaurants. The combination of higher costs for staples and currency-driven price marks could feed into broader food-price trends for years to come.
What this means for consumers and policymakers
For households, the trend translates into higher grocery bills and potential adjustments in shopping habits or dietary choices. For policymakers, the data highlight the challenge of importing essential goods in a weak currency while domestic production grapples with climate-related costs.
Two practical takeaways emerge: first, expect ongoing sensitivity to exchange-rate moves in food markets; second, continued emphasis on diversification and efficiency in supply chains could help dampen volatility.
Disclaimer: This article provides information based on official data and expert commentary for informational purposes and does not constitute financial advice.
Readers, how are you coping with higher grocery costs? Do you expect this trend to persist as exchange rates fluctuate? Share yoru experiences and insights below.
What steps could households take to mitigate impact-from budgeting to substitutions? We welcome your thoughts and tips in the comments.
every 1 % depreciation translates into roughly 0.8 %-1 % higher cost for imported commodities priced in USD,Euro or CNY.
How the Weak Won is Driving Imported food Prices higher
1. Exchange‑Rate Dynamics Behind the Surge
- KRW depreciation timeline
- Q1 2024: Won slid to 1,300 KRW/USD – a 7 % drop from the same period in 2023.
- Q3 2025: Won weakened further to 1,380 KRW/USD, the lowest level since the 2008 financial crisis (Bank of Korea, 2025).
- Key drivers
- Higher US interest rates – Federal Reserve policy hikes increased the dollar’s attractiveness.
- Capital outflows – Korean investors sought higher yields abroad,pressuring the won.
- Trade‑balance strain – A widening deficit, especially in energy and raw‑material imports, reduced domestic forex reserves (Ministry of Trade, 2025).
- Impact on import pricing
- Every 1 % depreciation translates into roughly 0.8 %-1 % higher cost for imported commodities priced in USD, Euro or CNY.
- Food‑grade commodities (wheat, soybeans, dairy) are particularly sensitive as contracts are locked in hard‑currency terms.
2. Food‑Category Price Indexes – What the Numbers Show
| Food Category | yoy Price Change (Oct 2024 - Oct 2025) | Primary Imported Input | Exchange‑Rate Sensitivity |
|---|---|---|---|
| Wheat & Flour | +12.4 % | US & Canadian wheat | high (USD‑linked) |
| Soybean Oil | +10.9 % | Brazil, US soybeans | Moderate (USD) |
| Dairy (Milk Powder) | +9.3 % | EU & NZ dairy | High (Euro) |
| Meat (Beef & Pork) | +8.1 % | US & Argentina beef | High (USD) |
| Seafood (Imported) | +6.5 % | China, Norway fish | Low‑moderate (CNY) |
Source: Statistics Korea Food Price Survey, 2025.
3. Supply‑Chain Pressures Amplifying Costs
- Shipping bottlenecks – Container shortages in the Pacific rerouted many routes, adding 2-4 % freight surcharges (Korea Maritime Association, 2025).
- Port congestion – Incheon and Busan ports reported average dwell times of 48 hours, up from 31 hours a year earlier.
- Domestic processing delays – Smaller grain‑processing firms face higher energy costs, wich are passed onto distributors.
4. Real‑World Effects on Korean Consumers
- Grocery basket inflation – The consumer price index (CPI) for food rose 9.2 % YoY in September 2025, the fastest pace in a decade.
- Lower‑income households – Food expenditure share climbed from 27 % to 31 % of total household spending (Korean Statistical Information Service, 2025).
- retail price adjustments – Major supermarket chains (E-Mart, Lotte mart, Homeplus) posted average price hikes of 4 %-7 % on imported staples.
5. Government & Industry Responses
5.1 Policy Measures
- Temporary import‑tariff relief – A 0.5 % reduction on wheat and dairy imports for six months (Ministry of Agriculture, 2025).
- Subsidized hedging program – The Korea Trade‑Investment Promotion Agency (KOTRA) offers limited‑risk FX contracts to mid‑size food importers.
- Strategic reserve releases – The Ministry of Food and Rural Affairs released 200,000 tons of wheat from strategic stocks to stabilize market prices.
5.2 Private‑Sector Strategies
- Forward‑contract purchasing – Large retailers locked in 2024‑2025 contracts at pre‑depreciation rates, mitigating a portion of the cost rise.
- Local sourcing push – Companies increase procurement of domestic barley and rice to offset imported wheat dependence.
- Price‑adjustment automation – Retail POS systems now integrate real‑time FX rates,automatically updating shelf prices within seconds.
6. Practical Tips for Consumers
- Shop seasonally – Korean‑grown produce (e.g., korean cabbage, sweet potatoes) remains less vulnerable to FX swings.
- Bulk‑buy stable items – non‑perishable staples like rice and domestically produced noodles are less impacted.
- Use loyalty programs – Many major chains offer discount coupons tied to imported product purchases, offsetting price hikes.
- Consider option proteins – Plant‑based options derived from locally sourced soy or peas can be cheaper than imported meat.
7. Forecast Outlook (2026-2028)
- Projected KRW range – Analysts at Hana Finance predict a 1,350 - 1,450 KRW/USD corridor for 2026,assuming steady US rates and no major geopolitical shocks.
- Food‑price trajectory – If the won remains within this band, imported food inflation may settle around 4 %-5 % YoY, down from the 2025 peak but still above the Bank of Korea’s 2 % target.
- Risk factors –
- Escalating US‑China tensions could disrupt supply chains for soybeans and corn.
- Unexpected domestic political moves affecting fiscal stimulus may alter the won’s trajectory.
8. Key Takeaways
- The won’s depreciation directly inflates the cost of all hard‑currency‑priced food imports, with wheat, dairy, and meat feeling the most pressure.
- Supply‑chain constraints and higher freight costs compound the exchange‑rate effect, pushing retail food prices upward.
- Policy interventions (tariff relief, hedging support) and industry tactics (forward contracts, local sourcing) are mitigating but not eliminating the price surge.
- For Korean households,strategic shopping choices and leveraging retailer loyalty programs can soften the impact while the macro environment stabilizes.
