Gov't to expand sale of rice stockpile to boost consumption

(2nd LD)
(ATTN: UPDATES with more details in paras 2, 8-9; ADDS new information in paras 6-7,
11)
SEOUL, Feb. 4 (Yonhap) -- The South Korean government plans to expand the sale of
rice stored in state warehouses at bargain prices in a bid to boost consumption
of the country's staple grain, the presidential office, Cheong Wa Dae, said
Thursday.
The government, which buys rice from farmers every year to maintain a strategic
food reserve in case of an emergency, currently has 1.6 million tons of rice in
state-controlled silos.
The store includes 140,000 tons harvested in 2005 and 160,000 tons from 2006,
much of which could be provided cheaply to food producers that could opt to use
such rice instead of imported wheat.
Newer rice is usually traded at 2,188 won (US$2) per kilogram on the market,
while the prices in January for rice harvested in 2005 and 2006 stood at 768 won
and 960 won per kg, respectively.
"The government's position is to expand the amount of rice to be released,"
Cheong Wa Dae spokesman Park Sun-kyoo said, adding it can be used for various
rice products, including rice-made snacks and noodles.
Others hinted that prices for 2005 rice may be lowered to 500 won per kg, making
it cheaper than wheat, which is traded at 900 won per kg. Most of the wheat
consumed in the country is imported from countries such as the United States.
South Korean consumers usually do not buy "old" rice because of the taste, making
it difficult to offload the grain in the market. The government has said it costs
up to 300 billion won per year to maintain the stockpile.
The announcement comes after President Lee Myung-bak said earlier in the day that
the government needs to seek ways to promote rice consumption and cut costs for
the state's stockpile of rice.
The surplus of rice is partly attributable to the halt of rice shipments to North
Korea. South Korea had previously sent 300,000-400,000 tons of rice to its
hunger-stricken neighbor annually, but has not made a delivery since Lee took
office in early 2008. Another reason for the surplus that has been cited is the
steady drop in demand for rice. Consumption fell to an average of 74kg per person
last year, while wheat consumption has increased to around 34kg per person.
Lee said Seoul is willing to provide Pyongyang with food aid on a humanitarian
basis, but formal talks are needed beforehand to secure transparency in the
distribution of rice by the secretive communist regime with a "military-first"
policy.
The farm ministry, meanwhile, confirmed that it is looking into options to sell
surplus rice at prices on par with wheat, but pointed out that the exact quantity
has not been determined.
(END)

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