South Korean conglomerate Posco International has signed another deal with the country's largest animal feed producer Nonghyup Feed (Nofi) to import grain for use as animal feed.
This is an effort to stabilise the domestic feed market and "overcome the supply chain crisis", Posco said on 28 November. It is the companies' second business agreement after they signed a deal to import feed in November 2022.
They will import grain using Posco's overseas grain elevators, secure long-term supply contracts for feed raw materials such as palm meal and jointly develop and invest in overseas food businesses.
The companies also plan to raise grain imports from Ukraine. But it has been difficult to secure supplies from this source after Russia terminated the Black Sea grain agreement in July.
Posco is looking to invest in a soybean milking plant and purchasing assets in the US, following investments in a Ukraine grain terminal, an Indonesian palm farm and a rice mill in Myanmar (Burma). Posco in September signed an agreement with US grain firm Bartlett to enter the US grain market, with Posco planning to buy a stake in a Bartlett soybean processing firm.
Nonghyup has a 31pc share in the domestic feed market, according to Posco. The feed producer imports grains such as corn and wheat from the US, South America and Ukraine, among other destinations, before processing and supplying them to domestic livestock farms.
Posco aims to handle 860,000 hectares (8,600km²) of cultivated land, expand production to 7.1mn t with 2.34mn t of processed goods by 2030. No further details regarding the products or processed goods were disclosed.
"South Korea's grain self-sufficiency was only 19pc last year and we are dependent on imports for most major grains except rice," a Posco International official said previously in September.
The US Department of Agriculture's Foreign Agricultural Service (USDA FAS) forecasts South Korea's total wheat imports to be 4.5mn t in the 2023-24 marketing year, unchanged from 2022-23, with diversification of suppliers particularly for feed wheat, according to the USDA FAS' Grain and Feed Update report on South Korea released on 3 November.
The USDA FAS forecasts total corn consumption in South Korea at 11.3mn t for 2023-24, led by stable demand for feed corn, which accounted for 43pc of feedstock in total compound feed production. Total corn imports for 2023-24 are projected to be unchanged at 11.4mn t.
South Korea's 2023-24 rice imports are expected to reach 480,000t because of late deliveries resulting from the slow finalisation of 2023 tariff rate quotas, which also resulted in rice imports in 2022-23 being temporarily reduced to 270,000t.
