Finance Minister Choo Kyung-ho speaks during a meeting on prices in Seoul on Dec. 5. (Yonhap)
South Korea will establish a government-wide commission for the comprehensive management of supply chains of items necessary for major industries and the people's everyday lives amid growing supply chain risks, the finance ministry said Monday.
The government also plans to create a fund to secure critical items and support investment in relevant facilities as the country seeks to reduce dependence on China and other nations to better ensure stable supply chains of key items, according to the Ministry of Economy and Finance.
The measures came after the National Assembly passed the Supply Chain Stabilization Act on Friday, which calls for the establishment of a commission for deliberating and adjusting relevant plans and the operation of an early warning system.
The act will take effect six months after promulgation.
"We've seen growing risk factors in supply chains of items directly linked to our major industries and the people's lives, such as urea, ammonium phosphate and graphite," Finance Minister Choo Kyung-ho said during a meeting with ministers on supply chain management.
It was the President Yoon Suk Yeol government's first ministerial-level meeting on the matter.
"The new law is expected to boost our responses to supply chain risks and resilience. The government will devise details by June," he added.
The envisioned commission will be headed by the finance minister and bring together relevant ministries and institutions, as well as experts in the economy and security fields.
The entity will finalize basic plans on how to boost supply chain stability next year, which will be under review every three years, the ministry said.
The government is expected to designate around 200 major raw materials and items as "economic security items" and extend support for their stable introduction, production and stock management through subsidies and other policy means.
South Korea has been working to intensely manage supplies of critical items and diversify their import channels in the wake of a series of disruptions in supplies of major items.
In the latest case, China suspended customs procedures for shipments of urea to South Korea, citing tight supplies for its domestic use, raising concerns over a repeat of the urea supply crisis seen in 2021.
South Korea has no urgent issues regarding the supplies and market prices of urea and urea solution, though demand at home for the items has somewhat increased.
South Korea has urea inventory sufficient for 4.3 months as companies have recently signed fresh contracts with suppliers from nations other than China.
More than 90 percent of local gas stations have enough urea solution stocks, according to the ministry.
The government decided to extend the tariff-rate quota system on urea, set to end this year, and to support part of the shipping expenses to ease the burdens of importers.
"The government will continue close consultations with China through various dialogue channels for the swift resumption of customs procedures," Choo said. "We will also review the establishment of domestic urea production facilities."
Urea is used to curb emissions in diesel cars and make agricultural fertilizers. (Yonhap)
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