Korea Safe From Global Rice Turmoil
By Na Jeong-ju
Staff Reporter
Rising rice prices have raised fears of possible riots across many Asian countries, but this is not the case for South Korea as its rice stockpile is sufficient and produces enough locally to meet full demand, institutes said Sunday.
The fast rises in global rice prices, however, may put upward pressure on domestic prices as the government is poised to gradually increase imports of rice based on trade agreements with some countries, they said.
Last year, the country produced 4.68 million tons of rice, which was enough to cover demand of 4.16 million tons. The government also had a stockpile of 695,000 tons as of the end of last year.
``Korea produces enough rice to cover consumption, so a surge in international prices won't lead to a rise in domestic prices,'' said Sung Myung-hwan, an economist at the state-run Korea Rural Economic Institute.
The country should import at least 260,000 tons of rice from China, the United States, Thailand and other rice exporters this year under the ``minimum market access'' agreement, a quota which states a country should import from foreign countries for domestic sales.
Prices of rice produced in Thailand, the benchmark for the crop's international prices, more than doubled this year to over $700 per ton. However, Korea will import rice at $400 per ton this year based on the contract signed last year, the institute said.
Several factors are contributing to the steep rise in prices. Rising affluence in India and China has increased demand. At the same time, drought and bad weather have reduced global output. Also urbanization and industrialization have cut into the land devoted to rice cultivation, researchers say.
According to the Korea Agro-Fisheries Trade Corp., the average wholesale price per 20 kilograms of best-quality rice stood at 40,000 won ($40.8) as of March 25, compared with 38,362 won at the end of last year and 35,818 won at the end of 2006.
``The local rice market is unlikely to be affected by the global trend. However, the country may face an upward pressure on domestic rice prices in line with rises in global prices,'' a corporation official said.
The higher prices have already sparked public protests in the Philippines. In Cambodia, the government ordered a ban on rice exports to curb rising prices at home. Vietnamese exporters and farmers are stockpiling rice in expectation of further price increases.