SEOUL, Apr 15: South Korea increased to $1.3 billion the soft loans it will offer to farmers this year to help them tackle high feed grain costs amid weak domestic meat prices, the agriculture ministry said in a statement on Monday.
The loan amount is more than eight times higher than an initial plan announced in February, a ministry official noted.
‘We found the initial offer we had planned was far short of what farmers need,’ one ministry official said. ‘Farmers who make efforts to reduce their livestock will be eligible for the funds first.’
Livestock farmers in South Korea, the world’s third largest importer of corn and a leading buyer of soybean meal and wheat, suffered last year as feed grain prices surged to a record amidst the worst U.S. Drought in five decades.
The funds on offer at a 1.5 percent interest rate are enough to buy at current prices more than half of the 7.6 million tonnes of corn the nation bought in 2011/12.
Although global feed grain prices have eased since hitting a record high last year, pork and beef are still being sold at a loss in South Korea due to increased supplies of home-bred meat and demand weakened by a slow-growing economy, according to the ministry statement.
Average pork prices at production sites were 237,000 won ($210) per animal as of last month, lower than production costs at 325,000 won a head, according to the Korean ministry data.
Average beef prices at production sites were 4.65 million won per animal, lower than production costs at 6.03 million won.
South Korea in February said it would offer $156 million in soft loans this year to farmers squeezed by record prices of feed grain and a weak domestic market for pork.
The country’s hog population stood at 10.1 million animals, highest on record, the data showed. Cattle numbered almost 3 million, slightly down from 3.14 million last September.
South Korea, the world’s fifth largest importer of pork last year, accounted for about 7 percent of global trade, U.S. Department of Agriculture data shows. The 500,000 tonnes of pork the country imported in 2012 covered about a third of annual consumption, the USDA said.
($1 = 1129.2750 Korean won)
(AGENCIES)
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