Starting Today, 200,000 Tons of Rice Market Isolation Purchases... Additional Purchases to Be Decided Later Based on Inventory Situation

[Image source=Yonhap News]

[Sejong=Asia Economy Reporter Kim Hyunjung] The government will begin market isolation of 200,000 tons of rice starting from the 24th, in response to the significant increase in rice production due to a bumper harvest last year. This measure aims to reduce market supply and defend against the decline in rice prices, and it is being implemented about a month after the ruling party and government agreed on market isolation.

The Ministry of Agriculture, Food and Rural Affairs announced that it will proceed with the market isolation purchase process for 200,000 tons of 2021 rice starting today. This follows the decision made on the 28th of last month during the ruling party-government consultation on the ‘2021 rice market isolation’ to prioritize isolating 200,000 tons out of the 270,000 tons of excess rice production this year.

According to Statistics Korea, this year’s rice production reached 3,882,000 tons, a 10.7% increase compared to the previous year, and considering the estimated rice demand, the surplus supply amounts to 270,000 tons. Due to the increase in rice supply, the price of 2021 rice in production areas fell from 56,803 won on October 5th to 51,254 won on the 25th of last month.

Of the 270,000 tons of excess production, the remaining 70,000 tons, aside from the 200,000 tons, will have the timing of additional purchases decided based on future market conditions and private inventories.

The Ministry of Agriculture, Food and Rural Affairs finalized the market isolation plan after procedures including identifying inventories of local production and distribution companies, confirming available space in government grain warehouses, and collecting field opinions through the Grain Supply and Demand Stabilization Committee, and announced detailed purchase plans today.

The market isolation purchase targets 2021 rice paddy held by farmers, agricultural cooperatives, and private production and distribution companies (RPC), and will be conducted through a public competitive bidding system by province. Bidding can be participated in via the internet rice auction system of the National Agricultural Cooperative Federation.

The ministry plans to prioritize purchasing quantities held by farmers. Farmers wishing to participate in market isolation should consult with their local agricultural cooperative in their city or county and participate in the bidding through the local cooperative. The purchase quantities for market isolation by region will be allocated by province, reflecting regional rice inventories and the degree of price decline in production areas compared to the previous year.

After preparing for the bidding process, the ministry plans to hold the auction on the 8th of next month and complete purchase inspections and acceptance. Additionally, to stabilize the supply and demand of 2022 rice, the ministry plans to prepare a plan for adjusting paddy cultivation areas through consultations with local governments.

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