Brace yourselves, the price of ramen is set to rise

Increasing food costs are set to lead to a price hike for ramen, Koreans’ favorite instant food. It probably would not have been that big of a news for non-Korean consumers as World Food Data Center figures show that Koreans consumed the most instant noodles in 2020.

Nongshim, a leading South Korean ramen maker, increased the prices of instant noodles and snacks by an average of 11.3 percent and 5.7 percent.

“We had tried to offset the price hike, removing redundancies in our operations, but that’s clearly not enough,” Nongshim official said, referring to an operating loss of KRW 3 billion (USD 2.2 million) excluding overseas profit.

Ramen makers have suffered a loss for the first time since 1998, when instant noodles accounted for 80 percent of revenue. Besides manufacturing industrial machines and processing agricultural products, it is a subsidiary of the Nongshim Group. As of last year, the group held assets worth KRW 5.05 trillion.

There was a need to raise noodle prices right away instead of waiting until next month after Chuseok, even though household budgets were stretched just before the holiday.

Food and gasoline prices continue to rise in spite of the pressure they are exerting on households and businesses alike, as consumer prices continue to rise in the latest reading of 6.3 percent, a nearly 24-year high, for the first time since 1991.

Based on a Bank of Korea survey released earlier, consumers revised down their inflation forecasts from 4.7 percent in July to 3.5 percent in one year. Consumers, however, expect interest rates to rise over the next six months, and inflation will peak in the fourth and fifth quarters, according to the government.

The Korea Price Information, a local research group, advises consumers to be prepared to spend more right now. Four-person households would pay 9.7 percent more at marketplaces and 6.4 percent more at supermarkets, according to the group.