April 25, 2011
 

South Korea to establish international grain firm

South Korea will formally start up a global grain procurement company in the following week to make sure that there is a steady supply of staple farm products, according to a state-run farm trade company on Friday (Apr 22).

The Korea Agro-Fisheries Trade Corp. has been pushing for a new company to better insulate the country from sudden fluctuations in grain prices that can adversely affect domestic production and inflation.

The public corporation said Samsung C&T Corp., Hanjin Shipping Co. and STX will invest in the company to open on April 29 as partners, with a ceremony formalising the arrangement to be held on Monday (Apr 23). The company is to be set up with an initial capital of US$2.5 million.

The agro-fisheries corporation will take charge of overall management of the procurement company to be set up in Chicago, with Samsung focusing on marketing. STX and Hanjin are to handle transportation of grain products.

Сompany executives, meanwhile, stressed that the new company does not plan to compete with major grain handlers such as Cargill and ADM, but wants to look for unexplored niche markets.

For 2011, the envisioned company will try to import around 10,000 tonnes of beans and corn, with the numbers to go up to four million tonnes or roughly 30% of the country's grain requirements by 2015, the state-run firm said.

South Korea needs an average of 20 million tonnes of grain, such as rice, wheat, corn and beans per year.