(Maekyung DB)

Feed price is strong every day… Goryeo industry high price, Hanil feed 27%↑

(Maekyung DB)

Feed stocks are rising day after day as international grain prices soar due to the prolonged Russian invasion of Ukraine.

As of 10:17 am on the 22nd, Koryo Industrial was traded at 5,410 won, a new high. The price is up nearly 30% from the previous day, the highest increase in the same industry. Hanil feed also traded at 12,900 won, up about 27% from the previous day. It also recorded an upper limit of 13,300 won at the beginning of the market. It closed at the upper limit for three consecutive trading days, and trading was suspended for one day on the 20th. In addition, other feed-related stocks are also strong, such as Hantop (29%), Sajo Dongawon (21%), and KC Feed (16%). The stock price of Hyundai Feed, acquired by Canaryabai, rose to an all-time high of 174,000 won on April 20.

The surge in domestic feed stocks is believed to be due to expectations that an increase in sales prices will lead to improved earnings at feed companies due to a rise in grain prices. Grain prices are expected to continue to rise in 2Q due to deterioration in supply and demand due to the prolonged war. In the case of feed, it is affected by the price of grain, which is a raw material. Rising Korea Rural Economic Research Institute Agricultural Observation Center predicted that the price of edible grains will increase by 43.7% in the second quarter of this year compared to the previous year.

On the Chicago Mercantile Exchange (CBOT), corn futures for delivery in July recorded $8.04 per bushel (about 25.4 kg) on ​​the 18th (local time), exceeding $8 for the first time since September 2012. The price, which was around $6 per bushel in January of this year, has soared by more than 30% in four months. Russia and Ukraine both account for about 20% of the world’s corn supply. Wheat and soybean prices also rose 43% and 26%, respectively, from the beginning of the year. The Food and Agriculture Organization of the World (FAO) predicts that wheat and corn prices could rise by 10% to 20% from current levels in 2022-2023.

The price of imported wheat in March exceeded $400 per ton for the first time since the 2008 global financial crisis. The price is 54.3% higher than in March 2020, the early days of COVID-19. The domestic industry imports wheat for feed from Russia and Ukraine. As of last year, Russia and Ukraine accounted for 30% of world wheat exports. Hwang Byeong-jin, a researcher at NH Investment & Securities, said, “The uncertainty of Russia-Ukraine production, which accounts for 30% of global exports, and the recent issue of worsening winter crops in the US will extend the short-term price strength of agricultural products.”

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