Thursday, July 16, 2009 | MANILA, PHILIPPINES [ BusinessWorld Online ]
SEOUL — A southwestern South Korean province has leased a plot of Philippine farmland to grow 10,000 tons of corn a year for animal feed for 25 years, a provincial government official said on Tuesday, and wants to buy more in its effort to cut costs.
South Korea, the world’s third largest buyer of corn for food and feed, imported 7.5 million tons of corn for feed last year, and is one of several nations, from China to the Middle East, seeking farmland abroad after steep food price inflation last year highlighted the need for more food security.
Jeonnam Feedstock Ltd, a firm set up by the province of South Jeolla, about 300 kilometers from Seoul, has leased about 231,400 acres (94,000 hectares) of farmland in Mindoro to grow low-cost grain for feed production, Lim Young-muk, a provincial government official, said.
"As the feedstock prices soared last year, livestock breeders have suffered from high costs and three farmers in our province killed themselves," Mr. Lim said by telephone.
"That’s why we started to turn our eyes abroad and we are now looking for more deals to get cheaper crops."
But he declined to provide details on possible future deals.
The government plans to start sowing in September.
One feedmakers’ group in South Korea bought 110,000 tons of US corn on Monday at $209.70 per ton for arrival in January 2010, 35% more than a deal for March 2009 arrival.
The country’s biggest feed maker, Nonghyup Feed, also said last year it would plant corn in Indonesia to diversify its grain sources from the United States, from which it imports nearly all of its corn requirements. — Reuters
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