What the kimchi premium really is
• The same coin is pricier in Korea because capital cannot cross borders freely, so prices cannot immediately equalize (arbitrage)
• So the kimchi premium is a sentiment thermometer showing how hot domestic demand is compared with overseas
When it is high and when it is low
• A large premium means the domestic market is overheated (FOMO), while a reverse premium (Korea cheaper) means the domestic market has fallen into extreme fear
• A premium peak is usually the place where chasing buyers have piled in
Where people slip
• They see the premium only as 'cheap or expensive' and do not read it as a 'gauge of domestic sentiment overheating'
The premium is not a price tag but the body temperature of the domestic crowd. The hotter it is, the less sense there is in chasing; cooling comes first.
Do you see the kimchi premium as a price gap, or as a gauge of domestic sentiment overheating?