The expected global production of major grains such as wheat and soybeans for 2024-2025 is projected to increase by 1.3%, indicating a stable supply and demand situation for major global grains. The domestic industry has secured raw materials sufficient for six months.
The Ministry of Agriculture, Food and Rural Affairs announced on the 14th that, considering weather issues related to climate change such as floods in Brazil and La Ni?a, it is strengthening monitoring of international grain market trends and proactively preparing for supply and demand instability by operating an early warning system and securing appropriate stock levels.
An official from the Ministry stated, "According to the U.S. Department of Agriculture, the expected production of major global grains such as wheat and soybeans for 2024/2025 is 2.967 billion tons, which is a 1.3% increase compared to the previous year. Ending stocks are expected to increase by 1.5% to 870 million tons, indicating a stable supply and demand outlook for major global grains. The domestic industry has secured raw materials sufficient for six months, including contracts for three months of inventory."
According to the Ministry, the Chicago futures prices for global wheat, soybeans, and corn (as of the 8th) are all lower compared to the previous year (wheat -0.7%, soybeans -12.5%, corn -26.9%).
In Rio Grande do Sul, the second largest soybean-producing state in Brazil, heavy rains from the 29th of last month caused flooding over three days, disrupting soybean harvesting. The exact scale of damage is still being assessed, but the estimated damage is about 2 to 5 million tons, which corresponds to 0.5 to 1.3% of global soybean production. Although soybean futures prices temporarily rose after the flooding, they remain below average and have recently been declining again. The Ministry of Agriculture, Food and Rural Affairs views the impact of the flood damage on soybean supply and demand as limited.
The domestic supply and demand impact is stable as the industry completed major grain purchases from August to October this year. Since the second half of 2023 purchase volumes are being imported, reflecting the downward trend, import prices for wheat, soybeans, and corn are also declining.
The government communicates with industry groups such as the Flour Milling Association, Starch and Sugar Association, Korea Agro-Fisheries & Food Trade Corporation (aT), and Feed Association to secure appropriate stock levels and monitor unusual international grain price movements. In cooperation with the Korea Rural Economic Institute, advisory meetings involving industry and experts are held monthly to review the status and outlook of international grain supply and demand. Experts noted that entering the weather market period (April to August), when price volatility typically increases seasonally and prices tend to react sensitively to weather conditions, but considering the overall stable global supply and demand situation, significant price increases are not expected.
Choi Myung-cheol, Director of Food Policy at the Ministry of Agriculture, Food and Rural Affairs, said, "We will continuously monitor risk factors in the international grain market caused by climate change to identify risks early and respond to international grain supply crises by cooperating with the industry to secure appropriate stock levels and establish stable overseas supply chains." He added, "The government also plans to continue supporting private companies in securing local overseas grain distribution networks by providing loans of 50 billion KRW at an interest rate of 1.5% to build stable overseas supply chains."
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