October 25, 2011
South Korean government, organisations establish overseas grain network
In a bid to create a global grain production and procurement network, a South Korean government body is collaborating with trading firms to establish joint ventures overseas, according to the Nikkei Monday (Oct 24).
State-owned Korea Agro-Fisheries Trade Corp. and South Korean companies will invest KRW300 billion (US$266.1 million) in the project by 2015. Amid soaring grain prices, South Korea is trying to ensure a stable supply of imported foodstuffs, the vice president of the state-owned firm told the Nikkei during a visit to Japan.
Korea Agro-Fisheries Trade will contribute 40% of the total investment. It will sign direct contracts with farmers overseas and set up distribution facilities.
As a first step, Korea Agro-Fisheries Trade created a joint venture in the US in April with three South Korean companies, including Samsung C&T Corp., to import wheat, corn and soy. The vice president of the company said it plans to build grain production and procurement bases in Russia, Ukraine, Brazil and Southeast Asia as well.
It will establish a global network by 2015 capable of securing four million tonnes of grain, even if prices spike or crops fail. South Korea hopes to boost its access to essential foodstuffs by increasing domestic production and imports.