Korean food companies to cut flour, ramyeon prices from July

[Courtesy of CJ CheilJedang]

Major food companies in South Korea have decided to cut the prices of some food staples including flour and ramyeon starting in July following the government’s pressure to lower prices to help contain inflation.

According to multiple sources from the food industry on Monday, CJ CheilJedang Corp., the flagship food unit of Korea’s CJ Group, plans to cut the price of flour it supplies to Nongshim Co., the country’s top ramyeon manufacturer, by about 10 percent from July. The slash is expected to drive down the price of ramyeon.

“We will shortly unveil concrete plans to reduce the price of ramyeon when the flour price falls,” said an unnamed official from Nongshim.

Another ramyeon manufacturer Samyang Foods Co. is also considering lowering the price of its products, sources said.

The food industry estimates that the price of ramyeon will be lowered by about 5 percent given that the cost of other ingredients such as potato starch, soybeans, and corn is still high, along with labor and electricity fees.

Ramyeon manufacturers raised prices by about 10 percent last year as flour costs jumped 20 percent due to a rise in international wheat prices.

Focus is on whether the price of other processed foods such as sweets, bread, and ice cream will follow suit.

According to Statistics Korea, the inflation of 64 items, or 87.7 percent out of 73 items of processed food, was higher than the growth of disposable income at the end of the first quarter.

In particular, the price of bread gained 14.3 percent from a year ago, confectionery 13.1 percent, ramyeon 12.4 percent, ice cream 11.8 percent, and pies 11 percent.