August 2, 2012

South Korea's STX to supply US corn to Nonghyup Feed

An agreement between South Korea's STX and Nonghyup Feed in Portland, Oregon in the US has been established to supply up to 700,000 tonnes of corn from the US to Nonghyup Feed for a year starting November this year, as announced Wednesday (Aug 1).

STX entered into the grain business in the US by completing construction of a grain terminal in the State of Washington last month.

Nonghyup Feed, which account for 30% of Korea's compound animal feed market share, will be processing STX's corns to manufacture animal feeds.

Prices of corns are particularly volatile depending on conditions on the supply side, and STX's corn supply is estimated at approximately US$200 million on a yearly basis.

STX and Nonghyup Feed expect that stable supply of corns will stabilise feed prices in the domestic market, consequently easing inflationary pressure for meat and dairy product prices from an upsurge in feed prices.

"STX will strengthen the grain trading business as it secured a stable source of grain supply," said an STX official. "STX will make all-out efforts to expand the market, using the advantage as Korea's only trader of such major grains as corn, soy, and wheat."