Reduce government grain supply inventory for processing

The Korean government's strategy to reduce the supply of government grains for processing in an effort to increase market prices for rice is facing opposition from the rice processing industry. The high cost of private market rice, which is twice or thrice the price of government grains, is causing concern for companies regarding their financial sustainability. The government's annual decrease in the supply of processed grains, from 380,000 tons in 2023 to 240,000 tons in the future, might force companies to replace rice with cheaper imported wheat flour, undermining the government's goals of increasing market prices and industrial development.

[Korea Agricultural and Fishery Newspaper] As the government gradually reduces government grains for processing, rice processing companies are complaining about the difficulties of their existence. The government’s reduction in the supply of rice for processing is intended to encourage the industry to purchase rice from the private market, thereby increasing prices. However, the industry is protesting, saying that if they use private market rice, which is 2-3 times more expensive than government grains, they will face management difficulties due to increased production costs. While domestically produced government grains used by the industry cost about 1 million won per ton and imported rice for processing costs 550,000-600,000 won, rice purchased on the market costs about 1.8 million won, showing a large price difference. If companies using imported rice for processing purchase private rice, the cost increases threefold. In contrast, most companies rely on government grains for ...