"Rice Stock Overflowing"... Special Disposal of 140,000 Tons of Government Grain Starting July

Disposal of 70,000 tons each of Alcohol and Feed Ingredients
"Cost Savings of 73.3 Billion KRW from Storage Fees and Import Material Replacement"

The government will specially dispose of 140,000 tons of government rice stocks to reduce the inventory of government rice (rice stocks). This is the first special disposal since 2019.

The Ministry of Agriculture, Food and Rural Affairs announced on the 23rd that it plans to specially dispose of a total of 140,000 tons of rice, 70,000 tons each for ethanol and feed purposes, from July until the end of this year, which do not compete with the general rice market. For ethanol use, 70,000 tons (domestic 2021 crop) will be added, making a total of 220,000 tons to be sold, and considering requests from the livestock industry, 70,000 tons for feed use will also be newly disposed of in this special disposal.

Last year, to stabilize rice prices in producing areas during the harvest season, the Ministry purchased a record-high volume of 770,000 tons (450,000 tons of public stockpiled rice and 320,000 tons of market isolation rice). However, the government stockpile also increased accordingly, and as of the end of last month, the inventory reached 1.7 million tons, more than twice the appropriate stock level of 800,000 tons. A Ministry official explained, "This situation is similar to 2016 when government rice was first disposed of for feed use," adding, "The excessive inventory has increased management burdens such as storage fees and is negatively affecting the rice market." At that time, when rice stocks exceeded appropriate levels, the government specially disposed of 1 million tons for feed use from 2016 to 2019.

With this special disposal, government rice stocks are expected to decrease from the initial 1.49 million tons to 1.35 million tons. Han Yeongjeong, Director of Food Policy at the Ministry of Agriculture, Food and Rural Affairs, said, “We expect this to contribute partly to the rise in rice prices by saving about 11.5 billion KRW in storage costs for government rice, saving 61.8 billion KRW in foreign currency by replacing imported raw materials for feed and ethanol, securing warehouse space for government rice compared to this year’s harvest season, and resolving some of the excess volume.”