March 25, 2008

South Korea's lowering of tariffs unlikely to lift grain imports
 

The South Korean government's move to allow more imports of feed corn and soy at low tariff levels is unlikely to motivate private traders to buy more of these grains, industry experts said Tuesday (March 25, 2008). 

The government Tuesday said it plans to more than double the import allowance for feed corn by 6.3 million tonnes to 11 million tonnes in 2008, while increasing the allowance for soy imports by 677,000 tonnes to 1.7 million tonnes.

A trader with a grain buying firm in Seoul said South Korea has been importing around 6 million tonnes of feed corn annually for the past few years - enough to meet the country's feed demand.

"I don't think private buyers will be interested in importing more corn, especially since the US is now the only international supplier around," the trader said.

He said that while India too exports corn, South Korean buyers are reluctant to buy it due to aflatoxin concerns.

China, which traditionally supplied more than 60 percent of South Korea's corn import needs, signaled earlier this year that it may not allow any corn exports in 2008. A senior South Korean grain industry official said the country normally imports up to 1.4 million tonnes of soy, and this year it's unlikely government permission to buy up to 1.7 million tonnes will entice buyers to import more as demand in a mature market like South Korea is quite static.

Both officials agreed it is unlikely the South Korean government would think of stocking up on corn and soy, as the country's grain imports are almost entirely controlled by private companies and generally match imports to domestic demand.

South Korea, along with Taiwan and Japan, are Asia's three biggest grain importers.