Price of Rice Down 9,000 Won Per Bag in Producing Area

The price of rice per bag plunged by 9,000 won this year due to the excess production and overstocking. It is the first time that the rice price has dropped in the harvest season.

According to the Ministry of Agriculture and Forestry and the National Agricultural Cooperative Federation, the sales price of rice is 152,880 won per an 80 kg bag (medium quality), which is 5.6 percent (8,964 won) down from 159,252 last year.

The sales price is the average price of the rice sold to the Private and NACF`s Rice Polishing Centers and private rice-mills after the government purchased rice through 24 branches of NACF.

The sales price has been dropping from 159,267 won on Oct. 5th, to 155,597 won on Oct. 15th, 153,305 won on Oct. 25, 150,542 on Nov. 5th, and 150,579 won on Nov. 15. Therefore, the price is expected to be down 10,000 won in December when the rice price hits bottom compared to the same period of last year.

The sales price of rice had increased every year from 97,908 won in 1992, to 104,856 won in 1994, 134,158 won in 1996, 145,388 won in 1998, and finally to 159,252 won in 2000.

Meanwhile, the Ministry of Agriculture and Forestry released a `high quality rice production plan` to increase the competitiveness by changing the production strategy to high quality rice.

The Ministry will distribute 28 kinds of high quality rice seeds at 5 percent lower price than common rice seeds to expand the area of the high quality rice production up to 50 percent next year (40 percent this year).

The Ministry will also change the grading standard for purchase by grading higher to the lower protein rice to lead less consumption of nitrogenous fertilizer that spoils the taste of rice. In addition, the Ministry will introduce a `3 strike-out system` first - issuing of warning, second - 50 percent reduction of subsidy, and third - suspension of subsidy.

Joong-Hyun Park sanjuck@donga.com