Seoul to expand supply of 15 foods for price stability

SEOUL, Aug. 18 (Yonhap) -- South Korea will expand the supply of major foods as part of efforts to meet rising demand ahead of the Chuseok holiday and preemptively stem a hike in inflationary pressure, the finance ministry said Thursday.
The supply of 15 food items, including cabbage, radish, pears, beef, pork, chicken meat and eggs, will be expanded for two weeks from Aug. 29 to Sept. 10, according to the Ministry of Strategy and Finance. The ministry said that it could expand their supplies by up to three-fold during the cited period.
The move is aimed at easing possible supply shortages for food materials ahead of the Chuseok holiday that falls on Sept. 12 this year.
Chuseok is one of the nation's biggest traditional holidays when people prepare special foods and buy presents for friends and relatives that can usually push up consumer prices.
South Korea's consumer prices jumped 4.7 percent last month from a year earlier, marking the seventh straight month that they have grown over the government's renewed annual inflation target for 2011 of 4 percent.
During the meeting presided over by Finance Minister Bahk Jae-wan, policymakers also discussed other measures to help induce price stability that include efforts to streamline the customs-clearing process for products whose tariff rates have been reduced to ease import price hikes.
South Korea lowered or removed tariffs on more than 100 products until the end of this year to help induce price reductions of foods and raw materials.
Meanwhile, policymakers agreed during the meeting to revamp the nation's "product expiration system" in a way that it could better reflect the need for efficient use of resources along with consumers' safety concerns.
As a reason for the reform, the ministry said that local manufacturers suffered about 650 billion won (US$612 million) in losses in 2009 from product recall.
They also discussed price stabilization measures enforced by other advanced nations. In particular, they looked into Japan's price stabilization efforts, the ministry said.
"The long-held price stability in Japan is attributed mostly to weakened purchasing power affected by its prolonged economic recession and other microeconomic factors such as its strong currency," the ministry said.
"On the microeconomic front, however, cost cutting, resources recycling, energy conservation, lowered entry barriers and diversified distribution channels are also playing a part," it added.
The ministry said that the government will review Japan's cases going forward to better craft its own measures aimed at boosting competition and improving the distribution structure so that it can help bring inflation under control.