By Jihoon Lee

SEOUL (Reuters) -South Korea’s consumer sentiment dropped sharply in March on growing worries about higher produce prices, a central bank survey showed on Tuesday, as inflation hitting the dinner table emerges as a major policy issue at next month’s elections.

The consumer sentiment index fell to 100.7 in March from 101.9 in February, posting the biggest monthly drop since October, in the Bank of Korea’s monthly survey of consumers.

Inflation expectations among consumers for the next 12 months rose for the first time in five months, to 3.2% from 3.0%, according to the survey, with two-thirds of the respondents saying produce prices would drive inflation.

That was up from 51.5% in the previous month responding to the same question.

South Korea’s consumer inflation accelerated in February, after three months of easing, due to supply-side pressures, mostly from higher agricultural prices.

Experts have attributed higher prices of agricultural products in part to poor weather but the opposition Democratic Party (DP) has targeted President Yoon Suk Yeol’s government for mismanaging the economy.

“The economy is collapsing and prices are going through the roof,” Democratic Party leader Lee Jae-myung said at a campaign rally in a major produce market on Sunday.

South Koreans go to the polls to elect the 300-member parliament and Yoon’s conservative People Power Party is in an uphill battle to win back a majority now held by the opposition.

Consumer inflation shot to the headlines after Yoon visited a supermarket last week and picked up a bundle of green onions saying “I’d say 875 won ($0.65) is a reasonable price”, seemingly unaware the item was on sale and subject to heavy government subsidy.

Opposition party members and consumer groups criticised Yoon for being out of touch, when the same product is normally sold at more than 4,000 won.

Last week, after Yoon ordered “extraordinary measures” to bring “shopping basket inflation” under control, the government appropriated 150 billion won to inject subsidies and increase supply through direct imports.

It has also announced it would temporarily lower tariffs on imported farm goods.

In recent days, South Koreans were seen rushing to major grocery stores and lining up to buy apples and green onions supplied at cheaper prices on government subsidies, local media reported.

($1 = 1,337.3800 won)