January 18, 2011
South Korea creates grain procurement system amid FMD
The South Korean government has taken substantial measures to stop the spread of FMD and it has recently announced the creation of a national grain procurement system.
The South Korean government, which is led by its Ministry of Agriculture, Forestry and Fisheries (MAFF) is taking this current outbreak very seriously," said Byong Ryol Min, USGC director in South Korea. "Last week, the government instructed all Korean feed millers and dealers to interrupt feed production and delivery for over 24 hours and implemented a full scale bio-security measure to mitigate or stop further outbreak of FMD."
The consortium will work alongside with the Korean government, which will provide financial support for the consortium to start the international grain trading business.
It aims to secure grains needed for both animal and human consumption and also plans to invest in 10 country elevators and an export elevator in the United States.
"Through this new system, the parties hope to import 50,000 tonnes (two million bushels) of corn and 50,000 tonnes (1.8 million bushels) of soy in 2011," said Byong Ryol Min, USGC director in Korea. "By 2020, they plan for this system to secure 30% of the nation's total imports which would include diversifying origin by investing in grain production and marketing chains in Brazil, the Ukraine, the Maritime Province of Siberia and other countries."
According to Min, the Korean government worked with the private sector to complete a total of 44 survey projects studying the economic and technical feasibility of developing feed grain bases in 22 different countries, including the United States. Despite these ambitions, Korea has not yet been able to make overseas grain production and marketing chains a significant reality.
Yet, with a population of 50 million people living on 24.6 million acres of land, the issue of arable farmland remains a concern for the government. Only 4.3 million acres or 17% of Korea's total land is currently available for farming, creating a grain self-sufficiency ratio of 27%.
"As the world market experienced recent cycles of high grain prices, the nation's food security concerns have grown, thus the creation of this new grain purchasing system," Min said.
Korea is an important customer to US producers, and the country continues to look to the US to fulfil its grain needs. From January to November 2010, Korea imported 6.6 million tonnes (261.56 million bushels) of corn and 370 tonnes (15,000 bushels) of sorghum from the United States in addition to purchases of feed wheat, rye and oats.
