S. Korea to supply record amount of foodstuff ahead of Chuseok holiday

SEOUL, Aug. 11 (Yonhap) — South Korea said Thursday it plans to increase the supply of key foodstuff by a record amount in a bid to help curb inflation ahead of the Chuseok fall harvest holiday slated for next month.

The government plans to supply a combined 230,000 tons of 20 items of farm, livestock and fisheries products for three weeks in the runup to the extended Chuseok holiday set for Sept. 9-12, the finance ministry said.

The government aims to lower the average prices of the 20 items by 7.1 percent from current levels.

Demand for vegetables, fruits, eggs and other foodstuff usually rises in South Korea ahead of the Lunar New Year and Chuseok holidays as people prepare holiday meals for family gatherings.

South Korea is grappling with high inflation caused by high energy and food prices, with consumer prices soaring 6.3 percent on-year in July, the fastest increase in almost 24 years.

Prices of farm products shot up last month due largely to frequent rains and a heat wave, with prices of vegetables jumping 25.9 percent on-year. The latest record rainfall is feared to put more upward pressure on prices of farm products.

The country also plans to spend an all-time high of 65 billion won (US$50 million) to provide discount coupons for the purchase of farm, livestock and fisheries goods to help ease price pressure.

To support vulnerable people, the government plans to provide a record 42.6 trillion won in fresh funds to small firms and merchants to help them meet cash demand ahead of the holiday.

Elevated inflation erodes people’s purchasing power and could weigh on private spending. A rate hike is meant to curb inflation, but it could increase debt-servicing burdens and slow down economic growth.

Finance Minister Choo Kyung-ho earlier said inflation may peak no later than in October if there is no spike in global oil and grain prices.