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Commodities prices have been rising at an alarming pace since the start of the year. And it's not just oil prices -- some food and consumer products prices have gone up by a whopping 60 percent.
The main reason for the increases is soaring prices of raw materials including wheat, corn, soybeans and oranges as well as oil.
It's natural for rising commodities prices to make things harder for the public, but now manufacturers are saying that rising costs are making it tougher to do business.
When confectioners want to raise their prices they usually try to do so indirectly, by introducing new products or reducing product sizes, because their products are sensitive to price increases. This time their price hikes are direct.
Lotte Confectionery recently boosted the price of its best-selling snack Waffle from W800 to W1,000 (US$1=W941). Haitai Confectionery and Orion also increased the prices of their top-selling snacks Egg Biscuit and Choco Pie from W700 to W1,000 and from W2,800 to W3,000, respectively.
As prices for flour, orange essence and cheese continue to climb, prices of products made from those items are also expected to rise.
Lotte Chilsung Beverage and Haitai Beverage are considering increasing the prices of orange juice, and Nongshim and Samyang may increase the prices of instant noodles.
So far fuel has recorded the largest price increase among consumer products this year. In Seoul the price of gasoline is up 14 percent from a year ago and diesel is up 22.1 percent. That's because the price of Dubai oil has soared 56.1 percent over the year, from US$57.21 to $89.29 a barrel.
Oil prices are likely to continue to rise, which will put a heavy burden on businesses unless the incoming government responds by cutting fuel taxes. For instance, airlines have already hiked their fuel surcharges, which has resulted in fares for long-distance flights rising by as much as W100,000.
(englishnews@chosun.com )
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