January 4, 2011

 

South Korea's 2011 feed grain imports seen low

 

 

South Korea's feed grain imports may decline this year, as the number of animals culled due to foot-and-mouth disease soars and as global grain prices climb, traders said Tuesday (Jan 4).

 

Traders said it was hard to determine down how much the on-year decrease in grain imports would be as foot-and-mouth disease was spreading, prompting the authorities to cull a combined 780,000 pigs and cattle, or about 5% of their total population.

 

According to industry data, the animal destruction has prompted a 2-3% decrease in feed consumption.

 

"We haven't imported any grains since covering April requirements," said a trader at Nonghyup Feed, noting that South Korea's largest feedmaker usually covered requirements for the first half of the next year by the end of December.

 

"We are concerned about lower feed consumption if foot-and-mouth and avian influenza spread further," the trader added.

 

The outbreak of foot-and-mouth, which affects livestock including sheep, cows and pigs, originated in pigs in the city of Andong in North Gyeongsang province on November 28. The government has been giving vaccinations in badly affected areas.

 

South Korea, the world's No.3 corn importer, has been at the highest alert level against foot-and-mouth disease since late last month. The outbreak has prompted shutdowns of all livestock markets, leading to a 5% rise in the price of beef and pork and a possible rise in imports from the US, Australia and New Zealand.

 

On December 31, Asia's fourth-largest economy also confirmed an outbreak of H5N1 avian influenza at poultry farms.

 

Another Seoul-based trader at a grain major said, "Feed makers are reluctant to issue tenders, delaying grain imports by one or two months because of foot-and-mouth disease."

 

"High grain prices are also keeping feedmakers sidelined, although freight rates are not so bullish," he said.

 

US corn and soy futures each set two-year highs on Monday (Jan 3) before retreating on forecasts for cooler, wetter weather in Argentina, where crops have been affected by hot, dry weather.

 

South Korean feedmakers produced a combined 10.5 million tonnes of feed for pigs and cattle in the first 11 months of last year, up 6% on-year, government data showed.

 

South Korea imported nearly six million tonnes of corn for feed production between January and November 2010, up 11% on-year, according to the industry data.