Rice prices in Korea are climbing sharply, defying expectations in a time of low inflation. The cost of a 20-kilogram sack — commonly sold in supermarkets — has surpassed the psychological threshold of 60,000 won, up 17.2 percent from last year and 14 percent above the average. In some regions, prices have reached 70,000 to 80,000 won per sack.
 
This spike stands out in an era of 2 percent consumer inflation. According to August consumer price data, rice prices rose 11 percent year-on-year, marking the steepest increase in 19 months. If sustained, the trend could push up restaurant meal prices.
 
The issue is not a shortage of rice. Government warehouses hold more than 1.11 million tons of domestic and imported rice. The real problem lies in flawed supply management. Last year, Korea produced about 3.66 million tons of rice — 120,000 tons more than projected consumption. Yet the government purchased 360,000 tons for public reserves and removed another 262,000 tons from the market preemptively to stabilize farm income.
 
These interventions backfired. Once the fresh rice harvested last year was depleted, prices surged. The irony is stark: while government reserves overflow, the market faces scarcity and rising costs.

The price hike has triggered a scramble among rice distributors to secure paddy stocks. Many failed to procure enough last year due to aggressive market isolation policies. According to the Agricultural Observation Center, rice inventory held by distributors dropped by 210,000 tons year-on-year to 710,000 tons as of late April.
 
Compounding the issue, poor grain quality last year led to a third consecutive decline in production. In response, the government announced plans to release 30,000 tons of rice on a rental basis and expand supermarket discounts. But with limited inventory, uncertainty will persist until the new harvest arrives.

This disruption challenges the long-held assumption that Korea has a rice surplus. It may not be a one-off event. Japan saw a similar surge this year after a sharp drop in last year’s harvest. In March, rice prices there nearly doubled compared to the previous year. Some Japanese tourists visiting Korea reportedly filled their suitcases with Korean rice.

Korea must take note. While the Grain Management Act provides mechanisms to absorb excess supply, it has failed to ensure stable availability for consumers. The government must reconsider whether its heavy-handed market interventions are causing unintended harm.

Protecting both farmers and consumers requires more than one-dimensional solutions. Accurate forecasting and flexible responses are essential. Rice remains a staple and one of Korea’s few self-sufficient food sources. Supply management must leave no room for error.

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.

Published Date: September 4, 2025