K-Ramyeon Prices Rise Amid Soaring Raw Material Costs
Ramyeon prices in South Korea are rising due to increasing raw-material costs for manufacturers Nongshim, Samyang Foods, and Ottogi. The companies have recently raised their factory prices on various ramyeon products. Despite strong overseas demand driving solid first-half growth for the industry, mounting input costs from higher flour and palm oil prices are forcing these price hikes.
Nongshim recorded consolidated sales of 1.89 trillion won in the first half, a 7.3 percent increase from last year. Overseas sales surged 26.8 percent to 641.4 billion won, but domestic sales fell 0.5 percent to 1.25 trillion won. Exports and overseas subsidiaries contributed significantly to operating profit growth, which rose to 126.7 billion won.
Samyang Foods posted even sharper growth, with first-half consolidated sales jumping 37.2 percent year-on-year to 1.48 trillion won. Exports surged 42.4 percent to 1.23 trillion won, while domestic sales rose 25.3 percent to 207 billion won.
Ottogi's overseas and domestic growth rates also showed a wide gap. First-half consolidated sales rose 4.2 percent to 1.9 trillion won, with overseas sales climbing 12.3 percent to 220.5 billion won. Domestic sales grew just 3.2 percent to 1.68 trillion won.
The companies attribute the price increases to rising input costs due to higher flour and palm oil prices. Nongshim increased its factory price for cup ramyeon products by an average of 6.0 percent this month, while Ottogi plans to raise prices on 29 products across 11 cup ramyeon brands by an average of 6.7 percent starting September 7.
Data from the Korea Agro-Fisheries and Food Trade Corporation shows that the average price of hard red winter wheat on the Chicago Mercantile Exchange this month was $266.31 per ton, up 39.1 percent from last year. The companies' earnings reports confirm the cost pressure, with Nongshim's average purchase price for imported wheat in the first half increasing by 9.2 percent and Ottogi's import price for edible oils rising 15.7 percent.