South Korea’s Spicy Kimchi Index to Rival Big Mac

South Korea’s Spicy Kimchi Index to Rival Big Mac

By Meeyoung Cho on 3:49 pm November 8, 2013.
If the Economist magazine’s Big Mac Index is too fattening, South Korea may have the answer with a Kimchi Index tracking the cost of ingredients in the pungent cabbage dish that is gaining fans worldwide as a healthy “superfood.” Kimchi-making season has just started in the Asian country and a shortage of locally produced cabbage has been enough to trigger hand-wringing editorials and the import of what Koreans regard as inferior Chinese cabbage to make their national dish. South Korea’s agriculture ministry launched the index on Friday, saying it would be published weekly to alert consumers if prices proved to be “seriously volatile.”“By having a Kimchi Index, consumers can then easily figure out when is the best time to make kimchi,” said Choi Jung-rok, director of the ministry’s horticulture industry division.

The Big Mac Index, designed by Daniel Ng Yat-chiu, is used as a measure of purchasing power parity across the globe by comparing the cost of a simple and uniform product — a burger from McDonald’s — in various countries.

The South Korean ministry said its index could also be used overseas, where kimchi is gaining traction.

US First Lady Michelle Obama recently tweeted her own kimchi recipe on her @FLOTUS Twitter account, prompting an avalanche of headlines in South Korea, which uses cultural products ranging from pop music to television dramas to promote the country’s image and powerful exporting companies.

South Koreans consume some 2 million tons of kimchi a year.

The index, which measures the cost of 13 ingredients to make kimchi, is based on the average price over three years.

Friday’s index level was 91.3, the lowest since 2009.

Reuters

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Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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