South Korea to slash imported rice prices

SEOUL (Reuters) - South Korea said on Monday it would sell 4,000 tonnes of imported rice to noodle-makers at nearly half its normal prices in a bid to tame soaring domestic food prices and bear down on inflation.

South Korea locally produces 94 percent of its rice needs and imports only small amounts as part of its import quota under a World Trade Organisation agreement.

Its high self-sufficiency rates have helped it stay relatively immune from a rally in global rice prices this year, which has been triggered by a fall in global rice stocks and a series of supply curbs by major exporters.

The farm ministry said on Monday it would provide imported rice at 355 won (34 U.S. cents) per kg, down 46 percent from the current price of 656 won, starting Tuesday to boost consumption of rice noodles as domestic prices of milled wheat jumped more than 50 percent this year on record global wheat prices.

"The price cut will make rice more competitive to wheat as a source of processed foods such as noodles and also boost rice stockpile release, as more than half of the imported amount last year has yet to be offered," a farm ministry official said.

South Korea imported 264,739 tonnes of rice in 2007, mainly from China the United States and Thailand.

It uses roughly half the imported amount to make spirits and the rest for processed food.

The price of benchmark Thai rice prices <RICE/ASIA1> hit a record $1,080 a tonne in April, equivalent to $1.08 kg, around 1,050 won and is trading at around $1,000 this week.

(Reporting by Miyoung Kim; Editing by Keiron Henderson)