S. Korea's fried chicken faces palm oil squeeze

STORY: Fried chicken is facing a palm oil squeeze in South Korea.

Kang Jung-a's fried chicken diner in Seoul is cheap-and-cheerful.

The classic combo, Koreans call ‘chimaek’ - fried chicken and 'maekju' - or beer.

An essential ingredient in her kitchen? Hot oil - to fry things up.

Kang uses a blend - soybean and palm oils.

But South Korea imports more than half its palm oil from Indonesia, a country that just banned palm oil exports.

That's bad news for fried chicken, because whether its palm or not, the prices of all cooking oil have shot up.

The price of a 4.8 gallon tin of edible oil in South Korea has doubled from this time last year to roughly $40, and could go higher.

Jung-a fears very soon she’ll have no choice but to raise prices and risk losing customers.

[Kang Jung-a, Diner owner]

"I have been struggling to survive, but now labour costs and everything have gone up, and if oil prices increase further, we won't have choice but to raise prices."

"If we reuse the same oil for two weeks, instead of a week like we used to, due to the high oil prices, the fried chicken wouldn’t taste good. Once the taste changes, the customers won't come again."

It's not just small shops - the big names are also taking a hit.

One of the country's largest fried chicken chains - Genesis BBQ - announced it will be raising the price of most items on it's menu by 10%, after similar moves by its rival chains Kyochon and BHC.

That could potentially speed up price hikes at smaller food chains - even those who've held firm against raising prices for more than a decade.

It may be enough to cause loyal chimaek customers to cut back.

[Kim Eun-su, University student]

"I order fried chicken once or twice a month. But if its prices go up due to the hike in oil prices, I don't think I will eat it that often except on special occasions like this with my friends."

The price impact of the palm oil squeeze won't be limited to chicken.

A wide array of goods use palm oil - from croissants to cosmetics.

The latest pain highlights a growing problem for Asia's fourth largest economy, where policymakers are wary of the current cost-push inflation, already at a decade high.

Some South Koreans are already considering alternative ways of getting their fix.

[Lee Young-jun, Office worker]

"If it really goes up to that level, it might be better to raise a rooster and press your own oil at home to cook it myself or something."