December 24, 2010

 

South Korea aiming to independently procure domestic grain demand

 

 

South Korea aims to independently procure 30% of its domestic grain demand by 2020 without relying on agribusiness multinationals, a state-run farm trade corporation said Thursday (Dec 23).

 

Korea Agro-Fisheries Trade Corp., said the plan is aimed at better insulating the country from unexpected spikes in prices that can hurt the local economy, and to enhance food security by reducing risks associated with importing grain products through wholesalers that dominate the market.

 

The plan calls for close cooperation with local companies such as Samsung C&T Corp., CJ Cheiljedang Corp, STX, and Hanjin, that have business areas and the capability to handle grain procurement.

 

At present, the country imports almost no grain that does not go through foreign agribusiness companies such as Cargill, ADM, and Monsanto.

 

South Korea's self-sufficiency in food stands at just 27% of domestic demand with the country effectively reliant on imports to feed its 49 million people.

 

"On an annual basis, South Korea imports 14 million tonnes of corn, beans, and wheat from abroad with 70% of all imports being procured through companies such as Cargill and ADM," Ha Young-je, head of the trade corporation, said.

 

He said the goal is to independently import around 4 million tonnes of foreign grain directly from overseas farm producers, adding that the plan calls for making inroads into so-called niche areas that have been overlooked by major dealers.

 

The executive said that local companies should focus on priorities such as non-genetically modified organisms and stronger ties with emerging food growers such as Brazil and the Ukraine.

 

Ha also said that because there is a need to work with existing agriculture businesses the country can move to share processing and storage facilities.

 

He said, meanwhile, the role of the state agriculture corporation will be to help reduce risks associated with private companies that have to make investments in the entire procurement process from production to import and sales.

 

The former vice farm minister said that a joint task force has been set up with local companies to work out details, with 50,000 tonnes of beans and corn to be imported directly without going through multinational businesses in 2011, with numbers to be progressively increased in the future.