[Start Economy] Cabbage prices are unstable during the kimchi-making season in November... "The first 5,000 won per waiver"

■ Host: Anchor Lee Jung-seop, Anchor Cho Ye-jin
■ Starring: Professor Lee Jung-hwan, Hanyang University School of Economics and Finance

* The text below may differ from the actual broadcast content, so please check the broadcast for more accurate information. Please specify [YTN News START] when quoting.


[Anchor]
We deliver the latest economic news quickly and kindly. Start Economy, today we will be with Lee Jung-hwan, a professor at Hanyang University's School of Economics and Finance. Please come in. As the weather is getting colder, there is a high interest in making kimchi, but our start-up economy deals with cabbage packs a lot. Today, the forecast for cabbage prices in November came out, how much do you expect?

[Lee Jung-hwan]
You can expect about 5,300 won right now. Last year, it was 4,300 won. If you look at it for about five years, it is a significant increase compared to the 2,900 won range. Nevertheless, the price has risen so much that it is called golden cabbage recently. The price of cabbage has risen so much that it is said that it costs up to 20,000 won per head, but as autumn cabbage begins to come out, the price will tend to stabilize a little. In the end, of course, it is higher than last year, but compared to the price that has risen tremendously now, autumn cabbage has come out, making it a stable upward trend. I think you can recognize it like this.

[Anchor]
Based on the figures, it is expected to be 23% more expensive than the same month last year, but the important thing is that the price of ingredients for not only cabbages but also other agricultural products is rising, so people who are about to make kimchi will be worried.

[Lee Jung-hwan]
That's why the country is announcing forecasts. In the case of cabbages, the prediction that prices will decrease is that autumn cabbages have eventually been released, and now they are called semi-highland cabbages, which come from small areas of cultivation. And especially with the high temperature, the price is lowering as things that have been damaged a lot come out. In the case of cabbages, there are many production areas in Jeollanam-do, so the production area of autumn cabbages is Jeollanam-do, but the price will fall because of the good crop, and chives have risen a lot. This is also a temporary phenomenon. If autumn supplies come out now, the kimchi-making season is in November, so we are making such efforts to stabilize prices by November. The price of radish has also risen a lot, but it was bad in the summer with similar logic, but the crop is not that bad after Chuseok, so if you go in November, you will definitely see the effect of lowering the price. We're talking about 8,635 won for a head of cabbage. We're talking about 3,600 won for martial arts. These are about summer crops and prices will stabilize when autumn crops come out, so it's better not to worry too much.

[Anchor]
The government is planning to announce measures to stabilize the supply and demand of kimchi ingredients soon, so when the measures come out, we will deal with them. As cabbage is added to the price of gold and gold, is it a so-called balloon effect? I think a lot of lettuce or cabbage replacement vegetables are flocking.

[Lee Jung-hwan]
Cabbage is used a lot by YouTubers as a substitute for cabbage kimchi through cabbage kimchi, and since it's pickled food, you can use it anyway, but the contents of lettuce are different. In the case of lettuce, the price has almost doubled compared to the price of summer. Like this, some Lotteria. I don't know if I can tell you my name. Lotteria and other places are saying that they use cabbage instead of lettuce. The price of lettuce has more than doubled compared to the low point, and in a way, cabbage is relatively stable, so efforts are being made to replace lettuce with cabbage. In the end, cabbage can be said to replace cabbage, and lettuce can also be said to be cabbage, but if these things go up too high now, they are economically looking for alternatives. In particular, I think I can tell you that there is a high possibility that the quality will deteriorate if the price goes up. The reason why the price goes up is usually because the crop is bad, so to say that the crop is bad is that the quality is not as good as before even if you buy it at the same price or a little expensive price. Because of this, it has a great influence on food ingredients to the extent that they mix substitute ingredients or, in the case of Lotteria now, lettuce and cabbage are mixed. Instead of just kimchi, cabbage kimchi. These things are coming out of hamburgers mixed with lettuce and cabbage, and the price effects are clearly showing. You can think of it as a situation where there is a substitution effect according to price.

[Anchor]
Substitute goods are coming out one after another. However, the abnormal climate must have played a role in the skyrocketing price of agricultural products. Contract cultivation is emerging as an alternative as the price turmoil is repeated due to the heat wave and rainy season. By contract cultivation, you mean how to grow agricultural products by signing a contract to acquire products under certain conditions in advance, right?

[Lee Jung-hwan]
It is said that the contract cultivation method is the method that large retailers do a lot. So in some cases, the price of cabbage went up to 20,000 won, but E-Mart and other large retailers didn't raise the price. It is widely recognized as a commonly called contract cultivation effect. When signing a contract, the price of the market does not respond rapidly because the unit price has already been set. The price can be stabilized because the quantity is secured through the appropriate contract cultivation area and supplied through it. Therefore, it can be said that contract cultivation that sets prices in advance can reduce uncertainty and provide stable supply. Nevertheless, now I think that we need to solve these problems by introducing the concept of food security from a more macro perspective and from a long perspective. Because if climate change is short-term and applies only to a few items, there is no big problem, but there are already a lot of items this year, apples, and pears. Problems continue to be found every season. It has the challenges of increasing efficiency in agriculture by setting up food security measures for the entire country. In particular, we are talking about resilience and resilience by recovering these things. When there is climate change, it is time to respond with an overall plan for what crops to grow and in some way, whether it is a corporate type, or a smart farm. So, the government has a bigger view because there are many opinions that if temperatures rise in the short term and become a problem this year, it's not a big deal, but it will continue to rise in the future. From the perspective of food security and agriculture, it seems necessary to respond systematically.

[Anchor]
You pointed out a long-term and systematic response. In fact, in the short term, cabbage can be solved in the short term as if it replaces lettuce, makes kimchi, and stops vegetables from turning, but as you mentioned earlier, the phenomenon is happening in other items. You said that lettuce was missing from hamburgers, but there are also tomatoes-free burgers.

[Lee Jung-hwan]
Tomatoes grow best at 22 to 25 degrees Celsius, and it was so hot in the summer. It is said that the tomato growth period is usually about two months as it lasts more than 30 degrees in summer. Tomatoes that didn't grow well when it was hot in summer are now reflected in the price. Price is also a problem, but especially for franchisees, quality management is required. If the quality of tomatoes is deteriorated, it can be a problem for the product itself, so the tomato itself is removed. In some ways, rather than using poor tomatoes, we're offering other coupons, drink coupons, and things like that. Crops such as tomatoes continue to be a problem, and recently, perilla leaves and other things have been raised a lot. Crops such as perilla leaves and spinach have also increased a lot, so as I said earlier, you need to take care of them overall. I think I can even tell you that management should be corporateized.

[Anchor]
If even large companies feel a burden, the burden on the common people will be even greater. Let's move on to the next topic. It's about SK Group Chairman Chey Tae-won and Art Center Director Noh So-young, who are drawing attention for divorce of the century, and what was the content of Choi's 500-page appeal to the Supreme Court?

[Lee Jung-hwan]
In the second trial, the division of property is a problem because it is structured to give up almost half of Chairman Chey Tae-won's property. Chairman Chey Tae-won's opinion is called unique property. The assets of about 3 trillion won he created were based on the operation of SK companies and did not reflect the efforts of director Roh So-young. Therefore, I think you can say that you have published a complaint expressing such an opinion that there is no need to divide the unique property. In the end, the property that the couple owned even before marriage is basically called a unique property, and the issue is whether or not a unique property can be formed even during marriage. In the past precedents, I was not in the legal side because I interpreted the unique property strictly, but these things were often viewed as unique property, but as the concept of unique property gradually diluted, it was jointly created by the couple. Controversy is brewing over such things because they keep going to the concept of common property. In a way, it can be seen that legal psychology is attached.

[Anchor]
This is the key to the recognition of unique property, and we will wait for the Supreme Court's decision on what interpretation to come out on this. Attention is also focusing on how the results of such a divorce trial will affect the group and the business world in the future.

[Lee Jung-hwan]
A general divorce trial will not cause much trouble, but in this case, there may be situations in which the stake must be disposed of. Chairman Chey Tae-won's stake in the stock is considered a great property. If you try to split more than 1.3 trillion won like this, there is no choice but to dispose of stocks. If stocks are disposed of, management rights may be harmed, or other forces that want to steal management rights can be raised, so you can understand that they are receiving a lot of attention from this point of view. So, you can understand that the division of general real estate and the division of management rights is a very different issue. Most of the assets are stocks, and if the second trial continues, there is a high interest in how to deal with them while maintaining management rights.

[Anchor]
If there is any update regarding this, we will try to deal with it again at this time. Let's move on to the next topic. Ahead of the U.S. presidential election, Wordings between the two candidates continue to attract attention, and former U.S. President Trump mentioned that tariffs are the only way to grow the U.S. economy. What do you think?

[Lee Jung-hwan]
Actually, I'm not saying I'm going to impose a 2000% tariff, but there's context. What former President Trump said can be seen as a position to protect Korea's own automobile industry even if we impose a 2000% tariff on cars imported from Mexico. Rust Belt is the center of the election. Since the automobile industry is the center of the Rust Belt, it can be understood as a big message to protect and foster the U.S. automobile industry. Mexico, the United States, and Canada have been talking about Mexico for a long time, but through NAFTA, you can move without tariffs. That's why companies in other countries set up factories in Mexico and export them while bypassing tariffs. In particular, as there are rumors that Chinese companies are using this side a lot, it is a position to protect the U.S. industry even by raising the tariff barrier against Mexico, and the current tariff plan itself is generally about a 10% increase and a 60% increase for China.

[Anchor]
And the U.S. presidential election is very related to us, so wouldn't there be a contribution to defense costs? President Trump is even using the expression "money machine" in Korea, and he seems to see it almost as a wallet. He said he would pay 10 billion dollars and 13 trillion won. If Trump is elected, the renegotiation of the contribution will come forward, right?

[Lee Jung-hwan]
I think they've already set it as a political agenda, and they're expressing their opinions that they'll come forward in terms of performance. In the end, the comment came out in person yesterday, and the news about this continues to come out, but we have a logic that 46,000 U.S. soldiers are not paying for the U.S. military, so if President Trump says he will be re-elected in the future, it is likely that he will come out very strongly about this. It's not true, but let's say it's populism. I think I can tell you that the Trump administration is going strong because it is an agenda that increases U.S. profits from a populist point of view.

[Anchor]
Lastly, we will also look at the New York Stock Exchange, but all three major indexes closed higher, especially the Dow hitting an all-time high.

[Lee Jung-hwan]
The stock price fell the previous day as the performance of a semiconductor company called ASML was worse than expected. Nvidia also fell more than 5%, driving the stock down, but Nvidia shares rallied yesterday. Nvidia shares rallied more than 3%. In particular, Dow is sensitive to things like corporate performance, but the third-quarter corporate performance season is coming out, and its performance is almost better than expected. ASML is an unusual case and almost everything is coming out well, so you can recognize that things like the demand-oriented Dow Jones Indices are rising a lot.

[Anchor]
I see. We talked about the New York stock market today. So far, I have been with Lee Jung-hwan, a professor at Hanyang University's School of Economics and Finance.