'Rice Price Mystery'.. Farmers Say They Are Losing Money, 'Psychological Resistance Line' Broken Again

[Financial News] Since the beginning of this month, the retail price of rice has been fluctuating, surpassing 60,000 won per 20kg, which is considered a psychological threshold.
According to the Korea Agro-Fisheries & Food Trade Corporation (aT) Agricultural Distribution Information (KAMIS) on the 3rd, the average retail price of 20kg of rice on this day was 60,316 won, up 0.04% from the previous day. It is 17.27% higher than the previous year and 14.04% more expensive compared to the average year.
The rice price maintained 59,962 won on the 29th of last month, but rose to the 60,000 won range in September. On the 1st, it was 60,256 won, and on the 2nd, it was 60,294 won, showing an upward trend for three consecutive trading days. 
 After surpassing 60,000 won for the first time this year in July, it paused after the government's discount support last month but has turned upward again.
Last month, in some local individual supermarket stores, a bag of 20kg rice was sold for 70,000 to 80,000 won. According to the consumer price index announced by Statistics Korea, the rice price index last month rose by 11% compared to the same month last year.
Song Mi-ryeong, Minister of Agriculture, Food and Rural Affairs, recently mentioned to reporters, "The retail price of rice at 60,000 won is a resistance line that consumers feel is expensive."
The rice price has been higher than the previous year since March. As of February, the price of 2024 rice was 54,438 won, a decrease of 2.5% from the previous year, but it rose by 4.5% to 55,237 won in March. In April, it was 54,831 won (7.9%), in May 56,178 won (4.1%), and in June 59,059 won (10.16%).
The recent rise in rice prices is analyzed to be due to competition among distribution companies in producing areas to secure raw rice, as the production of 2024 rice has decreased, leading to a shortage of stock.
According to the Korea Rural Economic Institute's Agricultural Observation Center (KREI), as of the end of April, the rice stock was 712,000 tons, a decrease of 210,000 tons compared to the previous year. In the case of the National Agricultural Cooperative Federation, it was 635,000 tons, a decrease of 20.4% compared to the previous year, and 77,000 tons for the private sector, a decrease of 39.6%.
The government is currently supplying 30,000 tons of government grain to distribution companies in producing areas in a rental manner to stabilize rice prices. This rice will be fully released to the market this month.
The Ministry of Agriculture, Food and Rural Affairs has been trying to stabilize consumer rice prices through discount events in large distribution industries since the 1st of last month, but as the rice price continues to rise, it plans to expand the discount range. The Ministry of Agriculture, Food and Rural Affairs is currently considering expanding the rice price discount range from 3,000 won per 20kg to 4,000 to 5,000 won per 20kg.
An official from the Korea Rural Economic Institute's Agricultural Observation Center (KREI) said, "It seems that companies that were hesitant to purchase due to the rise in raw rice prices are now starting to purchase," adding, "Future prices are likely to fluctuate depending on the level of consumption."

ssuccu@fnnews.com Kim Seoyeon Reporter