'Unstable Rice Due to Global Chaos?'... No Food Crisis from COVID-19

100% Self-Sufficiency in Korean Rice... Sufficient Supply with Active Exports
Rice Prices Expected to Fall in April-May... Decreased Consumption by Restaurants and Food Material Companies
Prolonged COVID-19 May Lead to Price Increase in Processed Foods Made from Imported Rice

Online shopping mall product photo capture.

[Asia Economy Reporter Lee Seon-ae] As the price of domestically produced rice is forming higher than the average year, concerns about a food crisis due to the novel coronavirus infection (COVID-19) pandemic are being raised. However, experts believe the possibility of a food crisis is slim, and the price of domestic rice is also expected to decline.

According to the Korea Agro-Fisheries & Food Trade Corporation (at) on the 13th, the wholesale price of rice (20kg, standard product) was recorded at 47,100 won. This is 3% higher than the average price of 45,772 won. For medium-grade rice, the price was 45,560 won, which is 16% higher than the average price of 39,284 won. The retail price (standard product, 20kg) was 51,389 won, 17% higher than the average of 44,055 won.

However, experts analyze that this is unrelated to the rice shortage caused by export bans amid rice shortages worldwide due to the current COVID-19 pandemic. Shim Eun-joo, a researcher at Hana Financial Investment, said, "Considering the global supply and demand situation, there is a possibility of upward pressure on rice prices, but Korea's rice self-sufficiency rate reaches 100%." She added, "Domestic rice prices move according to government purchases, so they differ from global rice price trends. The recent high domestic rice prices are due to the government raising purchase prices to defend against the rice price collapse at the end of 2017, which led farmers to delay shipments."

Although there is unease in the market, rice prices have not changed compared to a month ago. One month ago, the wholesale prices for standard and medium-grade rice (20kg) were 47,125 won and 45,500 won, respectively, and the retail price (standard product, 20kg) was 51,667 won.

On the contrary, Korean rice, based on a 100% self-sufficiency rate, is currently being exported worldwide. In Iksan, Jeonbuk, the 'Saelmi' rice variety has recently been exported to Hong Kong at 20 tons per month. Korean rice was 2 to 3 times more expensive than Chinese and Southeast Asian rice overseas, making it difficult to open export routes, but the situation changed as online purchasing demand surged overseas after the COVID-19 outbreak. In Gangjin, Jeonnam, the 'Saechungmu' rice variety was exported to Malaysia for the first time, with an additional 90 tons planned for export.

Rice prices are expected to decline. The April issue of the Korea Rural Economic Institute's trend analysis report "Rice Observation" forecasted that domestic rice prices will fall further for the time being. The institute predicted, "Although inventories held by producers and distributors are lower than last year, the decrease in rice consumption by restaurants and food material companies and the resulting increase in price reduction demands will act as factors for price decline."

Meanwhile, the annual domestic rice consumption is around 4 million tons, and under the World Trade Organization (WTO) agreement, 404,800 tons must be imported. Since processed foods and feed grains use imported rice, if the COVID-19 pandemic prolongs, there is a possibility of increased production costs for processed foods and livestock. The Ministry of Agriculture, Food and Rural Affairs explained, "If ports in each country close, it could lead to price increases for processed products such as ramen and snacks made from imported rice."

This content was produced with the assistance of AI translation services.