South Korea urges US on cutting corn, soy use in biofuel

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Publish time: 22nd July, 2012      Source: www.cnchemicals.com
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July 22, 2012

   

   

South Korea urges US on cutting corn, soy use in biofuel

   
   
   

In order to ensure stable food supplies as prices soar amid the worst US drought in decades, South Korea''s top grain importer has urged the US to consider cutting the use of corn and soy in biofuel production.

   

   

"Purchases from South America and Eastern Europe are not a solution and substitution is also not possible as most grain and oilseed prices are surging," said Kim Chi Young, director for the purchasing division at the Korea Feed Association.

   

   

Soy reached a record today and corn rallied to the highest level since June 2008. The drought is baking farms from Arkansas to Ohio, reducing yields, after frosts followed by drought cut wheat harvests in the former Soviet Union, prompting the United Nations and the USDA to pare estimates for world grain harvests.

   

   

"The impact on domestic livestock and food industries will come later this year or early next year as we''ve covered most of our corn requirements," Kim said. "For feed wheat and soy meal, buyers have covered their needs through November."

   

   

South Korea''s feed industry used 5.7 million tonnes of corn, 2.3 million tonnes of wheat and two million tonnes of soy meal last year. The US supplies over 80% of South Korea''s total feed-corn demand, Kim said.

   

   

Ethanol production in the US sank 2.3% to 802,000 barrels a day last week, the lowest level since the Energy Department began tracking weekly data in 2010.

   

   

December-delivery corn gained as much 1.4% at US$7.95 a bushel on the Chicago Board of Trade, the highest for the most-active contract in more than four years. Soy for November delivery gained as much as 1.5% to a record US$16.445 a bushel.

   

   

Dimming corn-crop prospects in the US may push global food costs higher, the Food & Agriculture Organisation said earlier this month. South Korea, Asia''s biggest corn buyer after Japan, will import eight million tonnes of corn for food and feed in 2012-13, according to the July report by the USDA.

   

   

The rallies come at a time when compound feed output in South Korea is expected to rise about 10% this year as the hog population recovers from an outbreak of foot-and-mouth disease last year, he said. The country culled 3.32 million pigs, or 34% of the total herd, and 151,000 cattle, or 4.5% of the total, from late November 2010 through April 2011 because of the disease, according to government data.

   

   

South Korea''s compound feed production may increase to more than 18 million tonnes this year from 16.7 million tonnes last year, according to the association. In the first six months, feed output rose 9.6% to nine million tonnes, the group said.