In order to prevent the collapse of rice prices, the government has decided to purchase 450,000 tons of public stockpiled rice this year during the harvest season and an additional 450,000 tons of rice to isolate it from the market.
The Ministry of Agriculture, Food and Rural Affairs has come up with the 'Measures to Stabilize the Supply and Demand of Rice during Harvest Season' after consultation with the Grain Supply and Demand Stabilization Committee.
This measure was prepared to prevent a price drop caused by an oversupply of rice.
The Rural Development Administration predicted, "This year's rice harvest is better than normal," and "Considering the recent trend of declining rice consumption, oversupply is expected this year as well."
The price of 2021 rice plummeted in production areas due to overproduction, but the same phenomenon may continue for 2022 rice.
Accordingly, the Ministry of Agriculture, Food and Rural Affairs decided to purchase a total of 450,000 tons of both old and new grains in order to stabilize the rice market during the harvest season and isolate them from the market.
Based on past cases, the Ministry of Agriculture, Food and Rural Affairs estimates that this purchase will temporarily cost about KRW 1 trillion in budget.
Apart from this market quarantine, the government plans to purchase 450,000 tons of public stockpile rice during the harvest period.
This would have the effect of isolating nearly one million tonnes in total from the market.
The Ministry of Agriculture, Food and Rural Affairs expects that rice prices will recover to an appropriate level through this market quarantine.