South Korea reviews early opening of rice market

SEOUL, April 22 - South Korea is considering scrapping its rice import quota to fully open its market earlier than the 2015 schedule, as it anticipates little increase in imports due to high global prices of the grain, the farm ministry said on Wednesday.

South Korea is obliged to gradually open its rice market and currently imports only a small amount to meet its import quota under a World Trade Organisation agreement, which will be in place until 2014.

"There have been some debates recently that scrapping the import quota early and fully opening the rice market would be more beneficial, as high global prices would not be likely to encourage imports," the ministry said in a statement.

"But once we scrap the import quota, we can't go back to the previous system and there's a potential risk of a fall in global rice prices (which could increase imports sharply and hurt domestic producers) ... We'll review the pros and cons of each side to decide our position."

Global rice prices soared to record highs early last year, with Asian prices almost trebling, as export restrictions by leading suppliers fuelled insecurity over food supplies.

U.S. rice prices soared to $1,188 per tonne in March, up 70 percent from a year earlier and more than double the 2007 price of $538.

South Korea, which consumes around 5 million tonnes of rice annually, imported only 287,000 tonnes under the WTO deal last year. The quota is set to increase to 409,000 tonnes by 2014.

Some experts estimate that fully opening South Korea's rice market would allow the country to save up to 400 billion won ($297 million) from the government budget over the next 10 years, as it would not be required to meet increasing import quotas.

South Korea depends almost completely on imports of key grains such as corn, soybean and wheat and rice is the sole major grain that its self-sufficiency stays above 95 percent.