Monday, October 04, 2010

Non-markets in some things: South Korean Edition

People: there's a Kimchi Crisis in South Korea. Prices for 2.5 kilos of Napa cabbage (the preferred base ingredient) have risen from 2,500 won a month ago to 11,500 won.

The WSJ has a (partly gated) article on this headlined "South Korea Faces Pinch in Kimchi Supply".

The article alleges that this is due to too much rain and poor harvests in South Korea.

I call Bulls**t!

Napa cabbage is a transportable commodity. South Korea is a geographically small country. No way a bad harvest there would cause world prices to rise so dramatically.

Now sure, perhaps the harvest was bad everywhere. But also perhaps it's this:

"The government responded to the price spike Friday by suspending its tariffs on cabbage and radishes and announcing plans to import 150 tons of fresh vegetables from China with special emphasis on napa cabbage."


Hey WSJ, you kinda buried the lede there. Tight supplies and high prices for Kimchi (relative to the free trade outcome) are SOP for South Korea.

How about "Protectionest policies rise up to bite South Korea in the Butt" for the headline?

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