January 11, 2011
SEOUL (AFP) - South Korea is planning to join private companies to jointly purchase a US grain trading firm to try to hedge against price swings and secure a stable source of food, an official said Tuesday.
State-run Korea Agro-Fisheries Trade Corp (AT) is in talks with shipping and food giants including Hanjin, CJ and Samsung C&T to form a consortium for a takeover this year, a senior AT official said.
"The consortium with shipping, food and trading companies will create great synergy to sell grain not only in South Korea but elsewhere in the world," the official, who declined to be identified, told AFP.
The consortium plans to bid for a small or midsized US grain trading company and base its operations in Chicago, home to a major commodities exchange, he said, adding it has no specific company in mind as yet.
South Korea, which imported about 14 million tonnes of soybeans, wheat and corn last year, hopes to secure about four million tonnes through the new company by 2015, he said.
"We have been importing grain mostly from big, multinational companies...we feel compelled to have our own line of grain trading businesses to hedge against price swings," said the official.
The official refused to elaborate on the size of the joint investment but said AT will have a 40 percent stake with private partners holding the rest.
The new company will sell grain not only to South Korea but elsewhere in the world including China and Africa where demand is booming, he said.
Seoul will reveal details on Thursday when announcing a policy package to curb rising food prices before next month's Lunar New Year holiday.
The United Nations warned Friday that millions of people are at risk after global food prices hit their highest level, amid unexpected shortfalls due to bad weather and policy responses from some exporting countries.
