The South Korean government on Monday met with local milling companies, upping the pressure on them to lower wheat prices in the fight on inflation, especially for daily food items such as instant noodles and milk.

The Ministry of Agriculture, Food and Rural Affairs held a closed-door meeting Monday afternoon with officials from local milling firms including Daehan Flour Mills Corp., CJ CheilJedang and Samyang – the big three players in the industry.

A ministry official declined to put too much emphasis on the meeting, saying the meeting was aimed at collecting opinions from the industry and seeking support for the government’s ongoing efforts to fight inflation fears.

The retail industry seems to be feeling the pinch from enhanced pressure from the government, but many industry insiders downplayed the possibility of the rare meeting yielding immediate cuts in product prices.

“Ranking officials who can make the final decision were absent in the meeting, which means no immediate cuts in wheat prices,” an official from a milling company said on condition of anonymity.

“Of course, the companies will remain under pressure after the meeting and seek possible options for future price cuts.”

The Food Ministry’s pressure on milling companies is coupled with the Ministry of Economy and Finance’s pressure on the nation’s massive instant noodle industry.

Last week, Finance Minister Choo Kyung-ho said local ramen companies could lower product prices, citing nearly a 50 percent cut in wheat prices globally.

“The global wheat price reached its peak in the third quarter last year and decreased afterward. The problem, however, is that wheat products that the local milling companies sell now are the ones that had been imported when they were expensive,” the source added.

Global wheat prices have been on a downward trend, recovering from unusual spikes caused by Russia’s invasion of Ukraine, which accounts for almost a quarter of the world’s wheat exports.

According to Korea Agro-Fisheries & Food Trade Corp. data, the global price of soft red winter wheat this month came to $241 per metric ton, down about 35 percent from $371 a year ago.

Usually, it takes four to six months for changes in wheat futures prices to be reflected in the actual prices that milling companies pay to import.

If milling companies refuse to reduce prices, industry sources say ramen firms have no way to cut their product prices.

“(The company) is currently reviewing options to lower its ramen products' prices, but, without a drop in costs spent on raw materials, it will be very difficult to make price cuts in ramen products,” said an official from one of the largest ramen firms here. “If milling firms decide to make adjustments to wheat prices, there will be more room for price cuts for ramen products as well.”

In September last year, Nongshim raised the price of its ramen products by an average of 11.3 percent, while other giants such as Paldo and Ottogi raised instant noodle prices by 9.8 percent and 11 percent, respectively, in October. Samyang Food raised its prices by 9.7 percent in November.

Meanwhile, the Korean government is continuing to monitor milk prices.

“The government will cooperate with the dairy industry to prevent spikes in milk prices, although their impact on the food industry appear to be limited,” the Food Ministry said.

The dairy industry expects a 69-104 won (5-8 cents) increase in milk prices this year, higher than last year’s 49 won.