Weak won hits imported raw materials, causing coffee and convenience store prices to rise

Packaged coffee beans are displayed at a supermarket in Seoul on Dec. 12. [NEWS1]

 
Rising exchange rates have put pressure on Korea’s distribution industry as the value of the won fell to the 1,480‑won level against the dollar, increasing costs for imported raw materials.
 
Korea’s import price index rose 2.6 percent in November from the previous month, marking the largest increase in one year and seven months, according to the Bank of Korea (BOK)’s Economic Statistics System.
 

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Retailers that depend heavily on imported items said they already feel the impact of the strong exchange rate on some product categories.
 
“We import most of our raw materials, and since we can’t easily replace coffee beans with domestic ones, it’s nearly impossible to diversify sourcing,” a representative from a food company said. “That’s why the rising exchange rate hits us hard.”
 
A representative of a confectionery maker also said that imported ingredients like wheat and corn heavily influence product prices and that the company expects its profit margins to decline.
 
“We are trying to spread out our purchases over time to defend against rising exchange rates,” the representative said.
 
When indexed to 100 in 2020, the import price index for coffee in November stood at 307.12 in dollar terms and 379.71 in won terms, nearly quadrupling over the past five years, according to the BOK's Economic Statistics System. Corn prices rose 6 percent in dollar terms and 35 percent in won terms in November. Wheat prices fell about 2 percent in dollar terms but rose 22 percent in won terms.
 

The won-dollar exchange rate appears on a display board at the Hana Bank dealing room in central Seoul on Dec. 22. [YONHAP]

 
Convenience store chains have already begun raising prices on food and beverages.
 
Korea Seven, which operates the 7-Eleven chain, said it will raise prices on about 40 private brand items from Jan. 1, 2026, with increases of about 5 to 25 percent. GS Retail, which operates GS25 stores, said it will also raise prices on four private brand items next year.
 
“The decision to increase prices was unavoidable because labor and raw material costs have risen and suppliers are under increasing strain,” a convenience store industry representative said.
 
Traders in the Seoul foreign exchange market closed the won at 1,480.1 against the dollar on Monday, up 3.8 won from the previous day’s closing rate of 1,476.3 at 3:30 p.m.


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.
BY NOH YU-RIM [paik.jihwan@joongang.co.kr]