Rising Rice and Barley Costs Spark Political Backlash
Opposition leader Lee Jae-myung criticized the government during a March 26 meeting at the presidential office for failing to release rice reserves amid escalating prices. He described the situation as abnormal, noting the lack of returns on reserves and ongoing price hikes. Lee stated, “This is an unavoidable aspect of business, but repeatedly returning reserves without reflection shows poor judgment by the administration.”
Record Highs in Second Tax Grain Auction
The government announced record-high prices for the second tax grain auction on March 27, two weeks after the first. Rice reached 1,934 won per liter, barley 1,923 won, and wheat 1,530 won, surpassing the initial auction by a combined 210 won.
Despite adjustments in rate applications—rice rising from 7% to 15% and barley from 10% to 25%—the overall impact remains significant. Rice liter rates dropped 65 won from 763 to 698 won, while barley fell 87 won from 523 to 436 won. Even so, the highest prices reflect a net increase of 200 won.
Reserve Sales Drive Up Costs
Highest tax grain prices stem from government reserve sales to companies, with private transactions even higher. Industry experts warn that if reserve barley averages 100 won above market norms, rice and barley tax grain could exceed 2,000 won. Officials monitor developments over the next 2-3 days before further action.
Lee highlighted this on X (formerly Twitter), stating, “Even the current highest prices include half adjustments—urgent calls grow for proportional reductions in rice reserve pricing.” He added, “Participation is fine, but daily hikes like this demand a massive response.”
Sources confirm the surge could trigger broader price increases, potentially totaling 200 won nationwide. “Citizens feel it acutely, especially full-time housewives facing heavy burdens on essentials,” Lee remarked.
Government Responds with Rate Adjustments
Deputy Prime Minister and Finance Minister Choi Sang-mok unveiled plans during a March 26 briefing to counter rising tax grain rates. Originally set for April, implementation extends to May 31, with rates now at 15% for rice and 25% for barley.
Choi emphasized greater adjustments for barley, saying, “Barley links to industry, distribution, and service employment—rates minimize the burden on these rises.” He noted, “National trends and overall developments will guide additional steps; otherwise, calculations continue.”
The rate hike marks the highest at 37%, the second-largest since Russia’s 2022 invasion of Ukraine.
Broader Market Impacts
The second auction includes front-month barley, unlike the first which covered rice, self-employed barley, and inland wheat. Government efforts target private sector rises upfront.
Recent comparisons show February’s peak week versus March 4 Singapore auction: rice up 89%, barley 151%. Monthly rises persist despite claims of normalization.
Business representatives argue, “Unreflected changes in abnormal loss scenarios mean greater losses without major rate impacts.”
Supply Chain Pressures Mount
Rice charliang and bus fares lead non-oil surges, with single-digit execution rising from 50% to 70% by April. Medium business rice (simya unhaeng) and road corporation stocks burden one household per dalgan.
Yososu firms face mail sales anxiety, with rice auctions closing March 27. Tax grain reductions affect naftda discharges and similar companies from midnight.
Special management for unstable goods like pork, eggs, barley, beef, tax grain—23 categories—sees full rice, private rice halves, sisol farm products, freight usage, external services among 43 rising items.
Plans provide 150 billion won to stabilize non-chuk farm products like beef, eggs, barley till May’s 50% cap. Central public worries on sales like cheoldo prompt cooperative management; taxi, sinnae bus, jihacheol shifts align with government efforts.
April’s 25 trillion won grain surge prepares amid 6.3 local elections and economic concerns. Insiders note, “Central states obscure single election dynamics—grain rises, adjustments, small services fully shaken.”
