Sea salt harvesting in Thailand (image for representational purpose only)
The steep rise in prices has been attributed to hoarding and bad weather. Fearing nuclear contamination after damage to the Fukushima Daiichi nuclear plant in Japan this year, locals began to hoard salt driving up costs. Moreover heavy rainfall hurt salt production as well.
The increase in prices is the highest since September 1981 when they jumped 46.7%. Chilly paste prices were up 18.7% in August from a year ago, soybean sauce was up 21.7%, and chilly powder and beans were up 18.2% each.
South Korea has been struggling with consumer inflation which rose 5.3% in August from a year ago, exceeding the government's 4% target. South Korea has been struggling with inflation which rose 5.3% in August from a year ago, exceeding the government's 4% target. While the government blamed the three-year high figure on weather, more worrisome signs have emerged for the country. Oil and gas products saw prices increase between 2% - 10%, according to The Wall Street Journal.
Increasing flow of dollars has caused inflation spikes in Korea, like it did in Malaysia and Singapore. The Bank of Korea has increased interest rates three times in 2011 to curb inflation, but is unlikely to raise them again and risk economic slowdown. Moreover household debt has been increasing, limiting the central bank's options to deal with rising prices.
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