The impact of the war in Ukraine and Indonesia's expanded ban on exports of palm oil, means consumers are seeing higher prices not just for the snacks in their shopping carts, but also for cosmetics.
Palm oil is vital for most of the world's packaged consumer products and roughly 70% of all U.S. cosmetics products use some palm oil.
Currently, the palm oil price stands at around 1,4-hundred-50 U.S. dollars per tonne, soaring by more than 40 percent on-year.
It is a surge of around 95 percent compared to the start of the pandemic in March 2020.
In South Korea, consumers are seeing prices of more than 80 cosmetic products going up by around 10 percent.
Firms are responding to the situation by using what they have in storage and they are preparing for further price rises.
"We are using palm oil from Malaysia and there is no problem in terms of supply as of yet as we are maintaining stable partnerships with our many global contractors. But, as further price hikes are expected, we are seeking ways to brace for them."
With the rising prices of goods, a recent study says, South Korea's economy in the second half of the year is likely to experience high inflation, high interest rates and a weaker Korean won against the dollar.
A report by local think tank Hyundai Research Institute says the economic uncertainty is forecast to grow in the second half of the year.
It says inflationary pressure has been going up further due to the surge in oil and raw material prices amid the war in Ukraine and the ongoing global supply chain disruption.
With this, the Bank of Korea's new governor Rhee Chang-yong expects the current high inflation to last for the next year or two and said that the central bank will continue to raise interest rates to tame high inflation.
Also with the U.S. central bank expected to move swiftly to rein in inflation, with a possible half-point rate rise at its next policy meeting in May,the Korean won hit a two-year low against the U.S. dollar last week.
The Institute added that soaring inflation and the hike in key interest rates will cause consumer spending to shrink and will put more interest payment burdens on firms and households.
Eum Ji-young, Arirang News.