FOOD PRICES A BURDEN AHEAD OF HOLIDAY

[Anchor Lead]

With rising food prices, the cost of cooking for Lunar New Year ancestral ceremonies is also expected to rise. The government even went ahead and imported cheaper eggs from other countries, but consumer sentiment continues to fall.

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These eggs were imported from Spain. One carton costs at least 1,500 won less than domestic eggs.

[Soundbite] Lee Kyu-ho, Song Ji-hee(Seoul residents) : "I didn't expect a big difference in quality. They are cheaper and so I thought I would give it a try."

The imported eggs look similar in appearance to those produced in Korea, but the code inscribed on them consists of five digits. Domestic eggs are marked with codes consisting of ten, which makes it easy to distinguish them from the imported eggs. Despite the stable prices of eggs and backlash from local farmers, the government decided to import the eggs from other countries because of the rising food prices. The cost of cooking for a Lunar New Year ancestral ceremony is estimated this year to be up to 360,000 won. It's going to cost more than last year regardless of where ingredients are purchased traditional markets or large supermarkets. Prices of herbs and leafy vegetables have soared recently, and prices of fresh produce could rise further because of the cold weather and heavy snowfall.

[Soundbite] Chung Hwang-keun(Minister of Agriculture, Food and Rural Affairs) : "Gyeonggi-do, Chungcheongbuk-do and Gangwon-do provinces have seen heavy snowfalls lately. I urge those in charge of retail to make sure local farms do not sustain damage from snowfalls."

Because of the high cost of ingredients, a growing number of households are opting for ready-to-cook products to be used in holiday cooking. Sales of easy-to-use meal kits for ancestor worship ceremonies have surged more than 20 percent lately.

[Soundbite] Ryu Kyung-seok(Staff at large supermarket) : "We have prepared products that are quick and easy to cook because there are many small families that do not need to cook in large amounts."

The problem, however, is that overall food prices could remain high even after the holiday. Seven out of ten consumers said they find prices of groceries burdensome. Half of the respondents expect their overall expenditures to increase from the previous year.

[Soundbite] Kim Sang-hyo(Korea Rural Economic Inst.) : "It will take some time for imported prices to affect consumer prices. Food prices will probably not start stabilizing until the second half of the year."

The Bank of Korea expects prices to continue to rise by around 5 percent through February.