South Korea's Daewoo Logistics plans to plant corn in Madagascar, as local grain buyers seek to diversify their grain imports, said a company official.
Daewoo Logistics had secured rights to develop 1.3 million hectares of land in Madagascar. Corn will be planted in 1 million hectares in the west of Madagascar, while the remaining 300,000 hectares in the east will be used for oil palm planting, said Shin Dong-hyun, project manager.
The company plans to start planting corn on 2,000 hectares next year, and aim to produce about 5 tonnes of corn per hectare the following year, Shin said.
Daewoo plans to produce 10,000 tonnes of corn by 2010, which will be worth US$2 million at current US corn import prices to South Korea at about US$200 per tonne.
Daewoo will develop the cropland over 15 years and may produce about 5 million tonnes of corn in the long term, more than half of South Korea's annual corn requirement of 9 million tonnes.
Shin said the company plans to boost yield to 10 tonnes per hectare, but it will take a long time to reach that level.
Daewoo is talking to potential investor partners such as South Korea's largest feedmaker Nonghyup Feed, with which it agreed in July to co-develop a 20,000-hectare corn farm in Indonesia next year.
Should negotiations fail, Daewoo will instead court China's COFCO or Thailand's CP Group, according to Shin.
Rising grain prices have raised the need for long-term supply deals and diversified grain sources among major Asian purchasers.