July 11, 2011

South Korea to secure overseas farmland to handle rising food costs

South Korea plans to secure a total of 380,000 hectares of overseas farmland by 2018 to grow crops such as corn and wheat and secure a stable supply amid surging food prices.

South Korea, which relies on imports for almost all its corn and wheat while fully self-sufficient in rice, is seeking to boost supplies as surging global food costs fuel inflation. Corn futures prices have jumped 63% on the Chicago Board of Trade (CBOT) in the past year, while soy climbed 42% and wheat gained 22%.

The planned area can produce about 1.38 million tonnes of corn, wheat and soy, or about 10% of the nation's annual imports of the three major crops, the agriculture ministry said in a statement.

The government will help the nation's companies lease arable land or buy stakes in overseas firms, the statement said, prioritising countries such as the Philippines, Cambodia, Ukraine, Indonesia, and Russia for potential investments.

South Korea also plans to expand its overseas grain trading business into countries including Brazil, Russia, and Ukraine after a US venture was set up earlier this year, the statement said. State-run Korea Agro-Fisheries Trade Corp started a grain-trading venture in Chicago in April to help secure supplies, the statement said.

South Korea is the world's third-biggest corn buyer.