South Korea's Kimchi Crisis

By JAEYEON WOO And KANGA KONG (WSJ online)
SEOUL—South Korea faces a minicrisis in its staple condiment kimchi after an unusually long stretch of rain has sharply reduced harvests of napa cabbage and other produce.
A resulting surge in food prices helped push the inflation rate to a 17-month high in September, and the price of kimchi, which is most commonly made from seasoned, fermented napa cabbage, has soared to unprecedented heights amid shortages.


Kimchi, South Korea's traditional pungent vegetable dish

Hard-hit restaurants are thinking about charging for kimchi, a food that is usually as freely available as sugar, salt and pepper—even at restaurants that don't serve Korean cuisine—and more heavily consumed than those foods by many South Koreans.

"This is like a rent increase," says Jang Won-chan, owner of a restaurant in central Seoul where the specialty is a stew made from kimchi and pork. "We are losing money but we can't quickly raise our prices."

Local press reported Friday that three men were arrested for stealing more than 400 heads of cabbage from a farm in the country's northeastern province.
The government responded Friday by suspending its tariffs on cabbage and radishes and announcing plans to buy 150 tons of fresh vegetables from China, with special emphasis on napa cabbage.

President Lee Myung-bak announced that, until the shortage eases, he would stop eating kimchi made from napa cabbage, which has an elongated head and is also known as celery cabbage or Chinese cabbage. Instead, the president said, he will eat kimchi made from the round cabbage that is more common in Europe and North America.

But the round cabbage is a poor substitute for the type from which kimchi is usually made—the long leaves of napa cabbage make it great for slathering on garlic, peppers and other seasonings for kimchi—and few South Koreans are likely to follow suit. After the presidential announcement, some commenters on South Korean media websites noted the price for the round cabbage, which as in other countries is often used for cole slaw here, has also risen, though not as much as napa cabbage.

A 2.5-kilogram head of napa cabbage cost 11,500 won ($10.09) in South Korean grocery stores this week, up from about 4,000 won two weeks ago and 2,500 won a month ago.
"This is the first time that cabbage prices have gone up so much," said Park Young-koo, researcher at the Korea Rural Economic Institute. "Since we have monitored the price, nothing like this has happened before."

Napa cabbage grows well in cool, dry conditions, but weather alternated between heavy rain spells and short stretches of hot, humid days in recent weeks. South Korea received 260.5 millimeters of rain in September, well above the average of 149.4 millimeters, the country's weather service said.

Food and energy prices pushed South Korea's consumer price index up 3.6% in September from a year earlier, up sharply from a gain of 2.6% in the preceding month and a 3% market forecast. From a month earlier, prices rose 1.1%, the fastest pace of growth since 2003.

The index measuring prices of fresh food surged 19.5% from the preceding month, and 45.5% from a year earlier, according to Statistics Korea, the government data service. Vegetables have been driving the increase but prices of fruit and fish were also significantly higher than a year ago.

Government officials played down the possibility that food prices will remain high for a long time, saying that produce supplies will improve once weather conditions turn favorable. Even so, the spike in inflation has increased the possibility that the Bank of Korea will raise interest rates in October, economists said.

For consumers and restaurant owners, the sharp jump in cabbage prices is raising questions of etiquette as well as forcing changes in business strategy.

Shin Hyun-soo, who runs a noodle restaurant in Seoul, said she noticed that customers, well aware of the cabbage shortage, have stopped asking for kimchi. "Then I say, 'Please feel comfortable about asking,'" she said. "You can't tell your customer to eat just a little kimchi."
Yu Seong-hwa, manager at another Korean food restaurant in Seoul, said they stopped serving kimchi from Korean-grown cabbage several weeks ago and are now running short of access to Chinese-grown cabbage.

She said she asked her brother to call friends who may know farmers. "An acquaintance of my brother told him that there won't be any usable cabbage until late October," she said.