Rice surplus to be bought by government and stockpiledThe government will buy 200,000 tons of locally produced rice this year to help stabilize the market price, the ruling party said Tuesday following a meeting with agriculture authorities.
"Of the surplus amount of 270,000 tons of rice, the government will isolate 200,000 tons from the market in the near future," said Rep. Park Wan-joo, the chief policy maker of the ruling Democratic Party (DP). "The government will announce a detailed plan for the purchase of 200,000 tons in January following discussions with related parties."
Park added the government will monitor the market situation and rice reserves to determine whether and when it should buy the remaining surplus of 70,000 tons .
The move comes after this year's rice production reached 3.88 million tons, up 10.7 percent, and outmatched expected demand of 3.61 million tons, which resulted in a surplus of 270,000 tons.
Due to the oversupply, rice prices have dropped sharply and dragged down the income of farmers. The average price for a 20-kilogram sack of rice was 51,254 won ($43) as of Saturday, down 9.8 percent from 56,803 won on Oct. 5, according to the authorities.
Under the grain management law, the government can "isolate" rice from the market, referring to surplus rice purchases, if the harvested amount is 3 percent greater than the expected demand or the price drops 5 percent or more from the previous year.
Farmers have been demanding the government buy their rice since the market situation should trigger the law, but the authorities have been cautious citing inflation.