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South Korean feed grain demand to maintain this year
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Demand for feed grain in South Korea, Asia's biggest buyer after Japan, will be sustained this year after climbing on increased livestock production, said an executive at the top buying group.
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Consumption of corn and wheat for animal feed in the country, which imports virtually all of its needs, increased 11% last year to 8 million tonnes as farmers boosted livestock output and meat imports dropped, said Kim Chi Young, director in charge of grain purchases at the Korea Feed Association, which buys about 70% of imports.
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According to Kim, demand from Korea may support wheat and corn in Chicago, which have tumbled 5% and 9.6% respectively this year on increased global supplies. In addition, meat imports declined last year as the financial crisis squeezed financing for small- and medium- sized importers. Data show that imports of beef, pork and chicken fell 9.2% to 418,177 tonnes in the first 11 months.
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''While the global financial crisis hit other industries hard, the livestock sector was relatively better off as the higher output illustrates,'' Kim said. ''Demand may be resilient this year as well as the economy recovers.''
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Interestingly, he said that the nation used 6.2 million tonnes of corn and 1.8 million tonnes of wheat last year to make so-called compound feed for livestock, noting that consumption of corn and wheat may be largely unchanged this year.
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''Foot-and-mouth disease is a swing factor,'' he said. ''If the disease is contained early, it won't have much impact. Otherwise, that may affect'' demand, he said.
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FMD is one of the most contagious diseases and can have high mortality rates in young animals, according to the World Organization for Animal Health in Paris.
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Output of compound feed, produced with various raw materials including corn, wheat and soymeal, may climb about 2% this year from an estimated 16.5 million tonnes last year, Kim said. Production gained 2% and prices of compound feed declined 25% in 2009, he said.
