Report Highlights:

MY 2016/17 corn imports are forecast to decrease 200,000 MT to 9.8 MMT due to competitively-priced wheat replacing corn for feed use. U.S. corn imports are expected to stay at 3.0 MMT accounting for 31 percent of total Korean imports, up from 25 percent in the current marketing year. Meanwhile, MY 2015/16 U.S. corn exports to Korea are revised down to 2.5 MMT, offset by cheaper origins from South America and Eastern Europe. MY2016/17 wheat imports are forecast at 4.56 MMT, while MY 2015/16 imports are projected to reach 4.35 MMT due to the availability of competitively-priced feed grade wheat. In an effort to reduce bloated ending stocks, Korea is allowing rice from the 2012 crop to be used in animal feed for the first time. The Korean government released 99,000 MT of brown rice from the 2012 crop for this purpose, with plans to continue under a rice reduction program.

Wheat

Production:

MY 2016/17 wheat production is forecast to increase to about 45,000 tons, up 29 percent from the current marketing year's estimate due to increased planting area in rice paddy area. The Korean government has made a double cropping direct payment of 500,000 Korean Won (USD442) per hectare to farmers who have grown winter crops in their paddy fields.

Korea: Wheat Production

Crop Year

Harvested Area (Hectare)

Yield (MT/HA)

Production(MT)

2006

1,738

3.34

5,810

2007

1,928

3.81

7,624

2008

2,549

4.06

10,359

2009

5,067

5.15

26,087

2010

12,548

3.12

39,116

2011

13,044

3.35

43,677

2012

9,467

3.91

37,014

2013

7,373

3.68

27,130

2014

7,180

3.26

23,409

2015a/

10,076

3.46

34,895

2016b/

13,000

3.52

45,000

Source: Ministry for Agriculture, Food, and Rural Affairs (MAFRA), Statistics Korea (KOSTAT)

a/ FAS/Seoul forecast based on five-year average yield with acreage surveyed by KOSTAT

b/ FAS/Seoul projection based on five-year average yield and acreage

Consumption:

MY 2016/17 wheat consumption is forecast at 4.40 million metric tons (MMT), an increase of nearly 220,000 metric tons (MT) from the current marketing year due to an anticipated increase in available supply of competitively-priced feed wheat, as milling wheat consumption remains stable.

MY 2016/17 milling wheat consumption, including flour and pasta trade on a wheat basis, is forecast at 2.40 MMT, a slight increase over the current marketing year.

In MY 2015/16, total wheat consumption is expected to stay around 4.18 MMT, up eight percent from the previous year due mainly to greater demand for imported feed-grade wheat which has been competitive with corn. Milling wheat consumption is expected to be 2.38 MMT, which includes imports of flour and pasta, almost the same as the previous year.

Korea: Monthly Wheat Use

(1,000 MT)

Month

Feed Wheat

Milling Wheat a/

MY 2013/14

MY 2014/15

MY 2015/16

MY 2013/14

MY 2014/15

MY 2015/16

July

235

129

124

176

183

181

August

219

121

119

173

175

170

September

226

126

124

156

166

178

October

245

134

151

185

179

182

November

205

130

140

180

172

169

December

159

143

151

180

186

189

January

125

123

132

184

194

191

February

100

103

129

161

152

160

Subtotal

1,514

1,009

1,070

1,395

1,407

1,420

March

101

116

na

176

183

na

April

100

120

na

180

176

na

May

108

119

na

177

172

na

June

114

125

na

175

177

na

Total

1,936

1,490

na

2,102

2,115

na

Source: KFA and KOFMIA

a/ includes wheat flour exports, but excludes the portion used in soy-sauce production

Korea: Post Estimates of Domestic Wheat Use

(1,000 MT, July/June)

Year

2013/14

2014/15c/

2015/16c/

2016/17c/

Imported Milling Wheat 1/

2,132

2,165

2,150

2,150

Imported Milling Wheat 2/

180

180

190

200

Flour Imports a/

30

44

60

60

Flour Exports a/

58

61

60

60

Pasta Imports a/

150

143

150

150

Pasta Exports a/

140

135

150

150

Local Wheat

27

23

35

45

FSI Consumption b/

2,321

2,359

2,375

2,395

Feed Wheat

1,936

1,490

1,800

2,000

Total Consumption b/

4,257

3,849

4,175

4,395

Source: Korea Feed Association (KFA), Korea Flour Millers Industry Association (KOFMIA) and Korea Customs Service (KCS)

a/ Wheat basis

b/ include local wheat, flour imports and pasta imports but exclude flour exports and pasta exports

c/ FAS/Seoul forecast

1/ KOFMIA members

2/ non- KOFMIA member

Korea: Wheat Flour Utilization

(1,000 MT)

Calendar Year

2010

2011

2012

2013

2014

2015

Total Consumption 1/

1,610

1,634

1,672

1,595

1,660

1,706

Per Capita (Kg/Year) 2/

32.6

32.8

33.4

31.7

32.9

33.7

Source: Korea Flour Mills Industrial Association (KOFMIA)

1/ based on flour millers' sales including exports, imports and animal feed purposes, but wheat flour production basis excluding animal feed and exports since 2010.

2/ excludes animal feed and exports from total consumption, including imports of wheat flour.

Trade:

MY 2016/17 wheat imports are forecast at 4.56 MMT, of which 2.35 MMT is for milling (including flour and pasta imports on a wheat equivalent basis) and 2.0 MMT for feed. The import estimate hinges to a large extent on the continued availability of competitively-price feed wheat with milling wheat remaining steady.

MY 2015/16 wheat imports are expected to reach 4.35 MMT, given that imports for feed wheat were 30 percent higher than the previous year during the first eight months of the current marketing year and pending feed-grade wheat contracts for the remaining four months. In MY 2015/16, Ukraine is the major supplier of feed-grade wheat, followed by EU countries such as France, Bulgaria, and Denmark for the first eight months. Imports of U.S. wheat in MY 2015/16 are expected to reach around 1.3 MMT not including feed-grade wheat.

Korea: Wheat Imports

(1,000 MT, Customs Cleared Basis)

Marketing Year

(July/June)

Feed Wheat

Milling Wheat

Flour Imports

1/

Pasta Import

1/

Total

05/06

1,536

2,220

41

101

3,898

06/07

976

2,298

69

108

3,451

07/08

565

2,317

105

117

3,104

08/09

1,151

2,058

69

105

3,383

09/10

2,164

2,071

127

119

4,481

10/11

2,075

2,520

63

123

4,781

11/12

2,868

2,169

42

122

5,201

12/13

2,820

2,461

39

135

5,455

13/14

1,948

2,181

30

150

4,309

14/15

1,391

2,370

44

143

3,948

15/162/

1,800

2,340

60

150

4,350

16/173/

2,000

2,350

60

150

4,560

Source: Korea Customs Service

1/ Wheat basis

2/ FAS/Seoul forecast

3/ FAS/Seoul projection

Korea: Monthly Wheat Imports

(1,000 MT)

Month

Feed Wheat

Milling Wheat

MY 2013/14

MY 2014/15

MY 2015/16

MY 2013/14

MY 2014/15

MY 2015/16

July

249

87

162

77

178

244

August

163

35

58

259

189

133

September

198

149

211

91

182

224

October

316

230

200

234

237

201

November

161

117

191

129

179

195

December

120

97

110

267

206

216

January

130

143

50

129

212

190

February

187

64

174

182

168

187

Sub Total

1,524

922

1,156

1,368

1,551

1,590

March

42

213

na

247

189

na

April

125

48

na

210

227

na

May

74

143

na

165

194

na

June

183

65

na

191

209

na

Total

1,948

1,391

na

2,181

2,370

na

Korea: MY 2015/16 Monthly Wheat Imports by Origin

(1,000 MT, based on Customs Clearance)

Country

U. S.

Australia

Canada

India

Other

Total

Milling Wheat

July 2015

116

114

13

0

1

244

August

37

96

0

0

0

133

September

96

94

33

0

1

224

October

122

78

0

0

1

201

November

104

77

14

0

0

195

December

69

115

32

0

0

216

January 2016

78

111

0

0

1

190

February

93

79

14

0

1

187

Total(Jul-Jan) 2015/16

714

765

108

0

5

1,590

Total(Jul-Jan) MY 2014/15

783

648

116

0

4

1,551

Feed Wheat

2015 July

0

0

0

0

162

162

August

0

0

0

0

58

58

September

0

0

0

0

211

211

October

0

0

0

0

200

200

November

0

0

0

0

191

191

December

0

0

0

0

110

110

January 2016

0

0

0

0

50

50

February

0

0

0

0

174

174

Total(Jul-Jan) 2015/16

0

0

0

0

1,157 a/

1,157

Total(Jul-Jan) MY 2014/15

78

0

102

10

732

922

Total Wheat

2015 July

116

114

13

0

163

406

August

37

96

0

0

58

191

September

96

94

33

0

212

435

October

122

78

0

0

201

401

November

103

77

14

0

192

386

December

69

115

32

0

110

326

January 2016

78

111

0

0

50

240

February

93

79

14

0

175

361

Total(Jul-Jan) 2015/16

714

765

108

0

1,161

2,748

Total(Jul-Jan) MY 2014/15

862

648

216

10

734

2,473

Source: Korea Customs Service

a/ Ukraine (811,224 MT); France (169,086 MT); Bulgaria (74,355 MT); Denmark (42,039 MT); Russia (54,420MT) and Romania (5,653 MT)

Korea: MY 2015/16 Feed Wheat Contracts

by

Estimated Time of Arrival (ETA)

(Unit: 1,000 MT, as of Mar. 17, 2016)

ETA

Quantity

Price (US$/MT)1/

July 2015

0

0

August

233

213.96

September

159

205.77

October

232

203.47

November

119

202.60

December

55

205.30

January 2016

123

201.77

February

85

200.73

March

120

198.47

April

160

195.92

May

318

181.50

June

207

181.78

Total

1,811

Source: Local Grain Traders

1/ CNF on Weighted Average

Tariff

In late December 2015, the Ministry of Strategy and Finance (MOSF) released its adjusted tariffs and tariff rate quotas (TRQ) for CY 2016. However, the government excluded milling wheat from the list of autonomous TRQ in CY 2016. The out-of-quota duty remains fixed at 1.8 percent. Of note, the feed wheat TRQ and its corresponding duty were eliminated in 2007. The import duty on all U.S. wheat is zero under the KORUS FTA.

In CY 2016, the flour import tariff rate is applied at 4.2 percent of the local base rate. Under KORUS FTA, import tariffs for U.S. wheat flour (H.S. 1101.00.1000) are scheduled to phase out over a 5-year period, declining to zero percent in 2016 accordingly, while tariffs for meslin flour (H.S. 1101.00.2000) the mixture of rye and wheat flour, immediately fell to zero.

Korea: Wheat Import Tariff Rates for CY 2016

(Percent)

Commodity

Applied Tariff Rate

Bound Tariff Rate

2015

2016

2015

2016

Durum Wheat, Seed

1001.11.0000

3

3

9.0

9.0

Durum Wheat, Other

1001.19.0000

3

3

9.0

9.0

Seed, Meslins

1001.91.1000

3

3

9.0

9.0

Seed, Other

1001.91.9000

1.8

1.8

1.8

1.8

Feeding, Meslins

1001.99.1010

3

3

9.0

9.0

Feeding, Other

1001.99.1090

0

0

1.8

1.8

Milling, Meslins

1001.99.2010

3

3

9.0

9.0

Milling, Other1/

1001.99.2090

1.8

1.8

1.8

1.8

Others, Meslins

1001.99.9010

3

3

9.0

9.0

Others, Other1/

1001.99.9090

1.8

1.8

1.8

1.8

Source: Korea Customs Service (KCS)

1/ The number in parenthesis is the in-quota tariff rate.

Flour Trade:

MY 2015/16 flour imports are expected to increase to 60,000 MT (wheat equivalent) to meet demand from small-sized restaurants and noodle manufacturers as they are loyal users of cheaper priced flour. Pasta imports are expected to be around 150,000 MT (wheat equivalent) based on imports for the first seven months of the marketing year. Annual flour exports are approximately 60,000 MT (wheat equivalent), while pasta exports stay around 150,000 MT (wheat equivalent).

Korea: Wheat Flour Imports

(H.S.: 1101.00.1000)

(Metric Ton, July/June)

Country

MY2010

MY2011

MY2012

MY2013

MY2014

MY2015 b/

U.S.A.

531

1,025

1,318

716

793

650

Canada

13,540

1,381

1,037

973

829

576

Australia

528

223

395

658

2,041

1,202

China

583

0

121

60

0

0

Turkey

11,130

8,784

3,636

1,144

996

684

Indonesia

9,956

7,708

9,616

8,011

5,968

6,917

Russia

0

0

0

0

4,1890

18,177

Others

9,772

11,250

12,478

10,237

17,391

16,529

Total

46,260

30,371

28,600

21,799

32,207

44,731

Wheat Basis a/

63,133

41,548

39,125

29,821

44,059

61,192

Source: Korea Customs Service (KCS)

a/ applied converting factor: 1.368

b/ year round based on the first seven months (July 2015-January 2016)

Korea: Pasta Imports

(H.S.: 1902)

(Metric Ton, July/June)

Country

MY2010

MY2011

MY2012

MY2013

MY2014

MY2015 b/

U.S.A.

424

429

512

451

375

423

China

62,024

61,766

65,716

73,991

70,426

70,649

Italy

16,368

15,169

19,193

20,595

19,481

22,587

Thailand

3,142

3,851

4,359

4,894

4,529

4,923

Indonesia

2,530

1,593

2,007

1,994

2,596

2,791

Turkey

2,507

3,193

3,630

4,094

3,691

4,257

Others

2,960

3,090

3,466

3,717

3,721

3,871

Total

89,955

89,091

98,883

109,736

104,819

109,502

Wheat Basis a/

123,058

121,876

135,272

150,118

143,392

149,798

Source: Korea Customs Service (KCS)

a/ applied converting factor: 1.368

b/ year round based on the first seven months (July 2015-January 2016)

Korea: Wheat Flour Exports

(H.S.: 1901.20.9000 & 1901.90.9099)

(Metric Ton, July/June)

Country

MY2010

MY2011

MY2012

MY2013

MY2014

MY2015 b/

Total

48,056

44,909

46,843

43,230

45,585

42,939

Wheat Basis a/

64,075

59,879

62,457

57,640

60,780

57,253

Source: Korea Customs Service (KCS)

a/ applied converting factor: 1.333

b/ year round based on the first seven months (July 2015-January 2016)

Korea: Pasta Exports

(H.S.: 1902)

(Metric Ton, July/June)

Country

MY2010

MY2011

MY2012

MY2013

MY2014

MY2015 b/

USA

19,189

20,365

23,694

23,979

22,675

23,722

Japan

13,811

12,773

10,989

9,833

8,175

7,661

China

4,595

5,517

5,597

7,918

8,926

13,407

Russia

2,450

3,417

3,465

3,108

2,099

1,524

Australia

5,304

4,875

4,956

5,439

4,955

4,946

Hong Kong

6,145

7,159

9,035

11,195

10,030

9,929

Others

29,435

33,521

36,954

41,090

41,,675

45,907

Total

80,930

87,626

94,689

102,563

98,535

107,097

Wheat Basis a/

110,712

119,873

129,535

140,306

134,796

146,508

Source: Korean Customs Service (KCS)

a/ applied converting factor: 1.368

b/ year round based on the first seven months (July 2015-January 2016)

Wheat

2014/2015

2015/2016

2016/2017

Market Begin Year

Jul 2014

Jul 2015

Jul 2016

Korea, Republic of

USDA Official

New Post

USDA Official

New Post

USDA Official

New Post

Area Harvested

7

7

10

10

0

13

Beginning Stocks

1437

1437

1411

1363

0

1363

Production

23

23

36

35

0

45

MY Imports

3942

3948

4500

4350

0

4560

TY Imports

3942

3948

4500

4350

0

4560

TY Imp. from U.S.

1160

1234

0

1300

0

1300

Total Supply

5402

5408

5947

5748

0

5968

MY Exports

153

196

150

210

0

210

TY Exports

153

196

150

210

0

210

Feed and Residual

1479

1490

1800

1800

0

2000

FSI Consumption

2359

2359

2351

2375

0

2395

Total Consumption

3838

3849

4151

4175

0

4395

Ending Stocks

1411

1363

1646

1363

0

1363

Total Distribution

5402

5408

5947

5748

0

5968

(1000 HA) ,(1000 MT)

Import Trade Matrix

Country

Korea, Republic of

Commodity

Wheat

Time Period

July/June

Units:

1,000MT

Imports for:

2013

2014

U.S.

1218

U.S.

1232

Others

Others

Australia

940

Australia

1006

EU

863

EU

560

Canada

444

Canada

306

Ukraine

151

Ukraine

525

India

371

India

10

Russia

72

Brazil

116

Turkey

48

Serbia

19

Total for Others

2908

2523

Others not Listed

2

6

Grand Total

4128

3761

Note: exclude the import of wheat flour and pasta

Korea: Milling Wheat Imports by Variety

(Arrival Basis, Calendar Year)

CY 2013

CY 2014

CY 2015

Origin

Variety

Quantity (MT)

%

Quantity (MT)

%

Quantity (MT)

%

United States

No. 1 WW/SW

447,729

21.9

424,386

20.0

450,780

20.6

No. 1 WW/SW 9.5 max.

0

0

0

0

1,500

0.1

No. 1 WW/SW 8.5 max.

56,679

2.8

62,507

3.0

40,784

1.9

No. 1 HRW 11.5 min.

207,162

10.1

200,854

9.5

176,122

8.0

No. 1 DNS 14.0 min.

275,836

13.5

303,211

14.3

336,723

15.4

No. 2 SRW

6,504

0.3

7,042

0.3

5,089

0.2

Sub Total

993,910

48.7

998,000

47.1

1,010,998

46.2

Australia

ASW a/

760,902

37.3

839,394

39.6

904,770

41.3

AH b/

123,552

6.1

117,992

5.5

133,460

6.1

APH d/

206

0.0

52,979

2.5

249

0.1

APW e/

41,404

2.0

239

0.1

3,960

0.1

ANW c/

0

0

0

0

2,200

0.1

Sub Total

926,064

45.4

1,010,604

47.7

1,044,639

47.7

Canada

No. 2 CWRS 13.5 min.

119,372

5.8

107,400

5.0

127,960

5.8

No. 2 CPSR 11.0 min.

0

0

0

0

1,100

0.1

Sub Total

119,372

5.8

107,400

5.0

129,060

5.9

Others

Organic Wheat

1,766

0.1

3,599

0.2

5,156

0.2

Grand Total

2,041,112

100.0

2,119,603

100

2,189,853

100

Source: Korea Flour Mills Industrial Association (KOFMIA)

a/ Australian Standard White Wheat

b/ Australian Hard Wheat

c/ Australian Noodle Wheat

d/ Australian Premium Hard

e/ Australian Premium Wheat

Corn

Production:

Corn production is negligible and accounts for less than one percent of total consumption. Planted area for MY 2016/17 is expected to remain steady at around 16,000 hectares, while production is forecast at 79,000 MT based on the preceding five-year average yield.

Statistics Korea (KOSTAT) recently released data on 2015 planting area at 15,356 hectares, down three percent over the previous year. Post estimates Korea's corn production at about 75,000 MT based on the preceding five-year average yield. The government will release the 2015 official production figures in April 2016.

Korea: Corn Production

Crop Year

Area (HA)

Yield (MT/HA)

Production (MT)

2006

13,661

4.73

64,623

2007

16,981

4.82

83,513

2008

18,366

5.05

92,830

2009

15,326

5.02

76,975

2010

15,528

4.79

74,339

2011

15,823

4.65

73,612

2012

17,001

4.89

83,210

2013

15,905

5.06

80,465

2014

15,839

5.18

82,008

2015a/

15,356

4.91

75,495

2016 b/

15,985

4.94

78,945

Source: Ministry for Agriculture, Food, and Rural Affairs (MAFRA), Statistics Korea (KOSTAT)

a/ FAS/Seoul forecast based on five-year average yield with acreage surveyed by KOSTAT

b/ FAS/Seoul projection based on five-year average yield and acreage

Consumption:

MY 2016/17 corn consumption is forecast to decline to 9.9 MMT, down about two percent from the estimated consumption in the current marketing year, which is composed of 7.6 MMT for feed purposes and 2.3 MMT for food, seed and industrial (FSI) purposes. Feed corn consumption is forecast to decrease to 7.6 MMT, down 250,000 MT from the estimated current marketing year level, in large part due to an anticipated increase in feed wheat demand for compound feed production. However, food, seed and industrial (FSI) corn consumption is expected to stay around 2.3 MMT to meet a greater demand for high fructose corn syrup (HFCS) and other corn products from Korean food industries.

MY 2015/16 corn consumption is forecast to decline to 10.1 MMT, down 1.5 percent from the previous year due to lower consumption for feed corn being replaced by feed-wheat, which is composed of 7.85 MMT for feed purposes and 2.25 MMT for food, seed and industrial (FSI) purposes. However, demand for feed corn will be affected by the availability of competitively-priced feed-grade wheat supply, with price disparity between feed corn and feed wheat narrowing in the global market.

Feed

Compound feed production is forecast to reach around 19 MMT for MY 2016/17, a record volume caused by strong growth in swine inventory, which offsets the reduction in cattle, while poultry numbers remain steady. Feed corn is expected to be the major ingredient used in compound feed, accounting for more than 40 percent of total ingredients in the marketing year.

Food

Corn processors continue using GM corn, non-biotech IP corn, and traditional corn to produce corn starch, HFCS and corn flour. GM corn imported from the United States, South American countries and Ukraine has been used for starch and HFCS. Non-biotech IP corn imported from the United States and Brazil and traditional corn imported from Russia, Hungary, Serbia, Romania and Australia have been used for corn starch and corn flour. The perceived public concern about biotech continues to exert pressure on imported processing corn, especially biotech corn that is used to manufacture cooking oil and HFCS. Many food processing companies have been reluctant to use ingredients sourced from biotech corn. Some food processing companies utilizing corn starch products have sourced ingredients imported from China since these items are reportedly derived from non-biotech corn.

Korea: Monthly Corn Use

(1,000 MT)

Month

Feed Corn

Processing Corn

MY 2013/14

MY 2014/15

MY 2015/16

MY 2013/14

MY 2014/15

MY 2015/16

October

588

676

699

175

180

189

November

596

620

660

165

178

186

December

687

707

732

163

169

172

January

703

675

659

161

170

183

Sub Total

2,574

2,678

2,750

664

697

730

February

632

602

614

148

155

na

March

653

668

na

180

187

na

April

664

679

na

171

178

na

May

669

679

na

177

183

na

June

646

703

na

176

181

na

July

659

701

na

184

183

na

August

626

655

na

175

181

na

September

639

670

na

159

173

na

Total

7,762

8,035

na

2,034

2,118

na

Korea: Total Corn Utilization

(October/September, 1,000 MT)

Marketing

Year

Feed

Processing

a/

Food

b/

Total

2008/09

6,368

1,418

108

7,894

2009/10

6,362

1,928

92

8,382

2010/11

6,074

2,051

89

8,214

2011/12

5,690

2,036

89

7,815

2012/13

6,483

1,900

98

8,481

2013/14

7,762

2,034

95

9,891

2014/15

8,035

2,118

97

10,250

2015/16 c/

7,850

2,150

95

10,095

2016/17 c/

7,600

2,200

100

9,900

Source: Korea Feed Association (KFA), Korea Corn Processing Industry Association (KOCPIA)

a/ Used for wet and dry milling process based on imported corn.

b/ For on-farm human consumption (on-the-cob) or snack food consumed on-the-cob, as puffed kernels or as corn tea. Imported white corn for popping has been included since MY 2004.

c/ FAS Seoul forecast

Korea: Feed Ingredient Use for Compound Feed Production

(October/September, 1,000 MT)

Items

MY 2013/14

MY 2014/15

MY 2015/16a/

MY 2016/17a/

Sub. Total Grains and Grain Substitutes

12,080

12,046

12,150

12,200

- Wheat

1,633

1,480

1,800

2,000

- Corn

7,762

8,035

7,850

7,600

- Other Grains and Grain Substitute b/

2,685

2,531

2,500

2,600

Others c/

6,758

6,951

6,750

6,800

Grand Total

18,838

18,997

18,900

19,000

Source: Korea Feed Association (KFA)

a/ FAS Seoul forecast

b/ includes Tapioca, bran and gluten feed.

c/ includes vegetable protein meal, animal protein, minerals/additives, tallow, DDGs and molasses.

Korea: Compound Feed Production by Species

(October/September, 1,000 MT)

Species

MY 2013/14

MY 2014/15

MY 2015/16a/

MY 2016/17a/

Poultry

5,107

5,551

5,500

5,500

Swine

6,015

6,049

6,200

6,350

Cattle

6,388

5,978

5,800

5,750

Others b/

1,314

1,388

1,400

1,400

Total

18,824

18,967

18,900

19,000

Source: Ministry for Agriculture, Food, and Rural Affairs (MAFRA)

a/ FAS/Seoul forecast

b/ include ducks, rabbit, horse, sheep, deer, quail etc

Korea: Compound Feed Production Comparison by Species

for

the First Four Months

(October/January, 1,000 MT)

Species

MY 2014/15

MY 2015/16

Change

Poultry

1,760

1,891

+7.4

Swine

2,138

2,180

+2.0

Cattle

2,108

1,994

-5.4

Others

456

515

+12.9

Total

6,462

6,580

+1.8

Source: Ministry for Agriculture, Food, and Rural Affairs (MAFRA)

Trade:

With cattle inventories expected to fall while swine numbers are growing, MY 2016/17 total corn imports are forecast to decrease to 9.8 MMT due to decreasing feed corn imports offset by feed- grade wheat, down 200,000 MT from the estimated current marketing year, consisting of 7.6 MMT of feed corn to meet the demand for compound feed, and 2.2 MMT of processing corn to meet relatively greater demand for food processing.

MY 2016/17 U.S. corn imports are forecast to stay around 3.0 MMT or about 31 percent of total Korean corn imports, up from the estimated 25 percent of total Korean corn imports for the current marketing year.

Corn imports for MY 2015/16 are expected to decrease to 10.0 MMT, down 167,000 MT from the previous year due to lower feed corn imports partly offset by the increases in processing corn and feed-grade wheat imports. For the first five months in MY 2015/16, corn imports for feed were about three percent lower than the same period of the previous marketing year while processing corn imports were 12 percent higher during the same period.

In MY 2015/16, U.S. corn exports to Korea are revised to 2.5 MMT, down 0.5 MMT from post's previous forecast due to greater supply of competitively-priced South American corn and Eastern European/Black Sea corn for both feed and processing purposes. For the first five months of the marketing year, the U.S. corn market share was nine percent.

As of early March 2016, importers contracted 7.0 MMT of corn for deliveries through June 2016, continuing to make contracts for July 2016 arrival onward. Most corn contracts are optional origin at seller's option from South American countries, Eastern Europe/Black Sea, or the United States with a price range of USD 175-202 per metric ton CNF, while corn processors have contracted for No. 2 GM/non-GM yellow corn from South America or the United States, and conventional corn from Eastern Europe with a price range of USD 181-208 per metric ton, CNF. Most recent buying contracts stabilized in the range of USD 175-181 per ton for feed corn and USD 181-186 for processing corn, CNF.

Korea: Corn Imports

(October/September, 1,000 MT, Customs Cleared Basis)

Marketing Year

From World

From the U. S.

U. S. Share

Feed

Processing

Total

Feed

Processing

Total

%

07/08

7,680

1,629

9,309

7,259

1,077

8,336

90

08/09

5,781

1,431

7,212

4,883

921

5,804

80

09/10

6,457

2,003

8,460

6,097

1,407

7,504

89

10/11

6,060

2,047

8,107

5,183

1,133

6,316

78

11/12

5,600

2,035

7,635

3,450

307

3,757

49

12/13

6,230

1,944

8,174

341

115

456

6

13/14

8,319

2,086

10,405

3,769

842

4,611

44

14/15

8,055

2,112

10,167

3,495

527

4,022

40

15/16a/

7,850

2,150

10,000

2,000

500

2,500

25

16/17b/

7,600

2,200

9,800

2,500

500

3,000

31

Source: Korea Customs Service

a/ FAS/Seoul forecast

b/ FAS/Seoul Projection

Korea: MY 2015/16 Monthly Corn Imports by Origin

(1,000 MT, based on Customs Clearance)

Country

U. S.

Argentina

Brazil

Serbia

Others1/

Total

Feed Corn

2015 October

139

75

385

14

38

651

November

91

32

547

1

2

673

December

39

66

671

7

70

853

2016 January

0

17

480

2

64

563

February

0

53

383

0

92

528

2015/16 (Oct-Feb)

269

243

2,467

24

262

3,268

2014/15 (Oct-Feb)

757

294

1,317

0

994

3,362

Processing Corn

2015 October

42

30

57

7

35

171

November

50

0

60

0

65

175

December

12

0

143

0

56

211

2016 January

2

0

105

0

138

245

February

1

0

67

0

44

112

2015/16 (Oct-Feb)

107

30

432

7

338

914

2014/15 (Oct-Feb)

193

0

290

114

210

807

Total

2015 October

181

105

442

21

73

822

November

141

32

607

1

67

848

December

51

66

814

7

126

1,064

2016 January

2

17

585

2

202

808

February

1

53

450

0

136

640

2015/16 (Oct-Feb)

376

273

2,898

31

604

4,182

2014/15 (Oct-Feb)

950

294

1,608

114

1,203

4,169

Source: Korea Customs Service

1/ Russia (308,288 MT), Paraguay (200,946 MT), Romania (117,204 MT), South Africa (146,627 MT), Hungary (58,544MT), Serbia (30,905 MT), Australia (24,016 MT) and Ukraine (1,904 MT)

Korea: Monthly Corn Import

(1,000 MT, Customs Cleared Basis)

Month

Feed Corn

Processing Corn

MY 2013/14

MY 2014/15

MY 2015/16

MY 2013/14

MY 2014/15

MY 2015/16

October

620

846

651

131

181

171

November

631

465

673

178

183

175

December

975

750

853

222

137

211

January

885

743

563

118

168

245

February

829

558

528

170

138

112

Sub Total

3,940

3,362

3,268

819

807

914

March

488

636

na

158

258

na

April

664

759

na

234

145

na

May

698

689

na

166

163

na

June

540

636

na

300

208

na

July

591

693

na

85

166

na

August

658

671

na

112

177

na

September

740

609

na

212

188

na

Total

8,319

8,055

na

2,086

2,112

na

Korea: MY 2015/16 Corn Contracts 1/ by Estimated Time of Arrival (ETA)

(Unit: 1,000 MT, as of Mar. 2016)

ETA

U.S.

Europe 4/

SOAM

Others 2/

Total

Price3

October 2015

55

0

0

888

943

195

November

0

108

0

678

786

195

December

0

100

0

610

710

189

January 2016

0

60

0

548

608

190

February

0

60

55

586

701

188

March

110

0

65

715

890

191

April

0

0

183

802

985

190

May

50

0

289

440

779

185

June

0

0

345

228

573

184

July

55

0

60

63

178

178

Total

270

328

997

5,558

7,153

Source: Local Grain Traders

1/ reflecting 90-95 percent of actual contracts due to the omission of some data on contracts

2/ optional origins at seller's option out of USA, SOAM (South America) or Europe

3/ USD/MT, CNF on Weighted Average

4/ include Eastern Europe and Black Sea

Tariff

In late December 2015, the Ministry of Strategy and Finance (MOSF) released its adjusted tariffs and tariff rate quotas (TRQ) for CY 2016. The autonomous TRQs cover a variety of agricultural products, including feed corn. The TRQ for feed corn set at 10 MMT with zero percent duty for CY 2016. However, the government excluded processing corn from the list of TRQs in 2016. The out-of-quota duty for both feed and processing corn remained fixed at 328 percent.

Of the annual autonomous TRQs for feed corn, 10 MMT has been allocated to feed millers who are members of the Korea Feed Association (KFA) and Nonghyup Feed Inc. (NOFI). The Korea Corn Processing Industry Association (KOCPIA) manages about 2.0 MMT of processing corn at three percent of import tariff rate as base rate.

Under KORUS FTA, the duty on U.S. feed corn immediately fell to zero. If imports of U.S. corn claim the KORUS preferential duty, those imports would not count against the global TRQ. Conversely, the duty-free volumes for corn for food processing will grow each year with tariffs being completely phased out by 2019.

Korea: Import Tariff Rate for CY 2016

Commodity

In-Quota

Out-of-Quota Rate

Bound Tariff Rate

Current Market Access Quota

Temporary Quota

In-Quota

Out-of-Quota

Volume

%

Volume

%

%

%

%

Feed Corn

1005.90.1000

6,102,100 MT

1.8

10,000,000 MT

0

328

1.8

328

Processing Corn

1005.90.9000

3

0

na

328

3

328

Source: Korea Customs Service (KCS)

Corn

2014/2015

2015/2016

2016/2017

Market Begin Year

Oct 2014

Oct 2015

Oct 2016

Korea, Republic of

USDA Official

New Post

USDA Official

New Post

USDA Official

New Post

Area Harvested

16

16

16

15

0

16

Beginning Stocks

1860

1860

1860

1860

0

1835

Production

82

82

77

75

0

79

MY Imports

10168

10168

10000

10000

0

9800

TY Imports

10168

10168

10000

10000

0

9800

TY Imp. from U.S.

3656

4022

0

2500

0

3000

Total Supply

12110

12110

11937

11935

0

11714

MY Exports

0

0

0

0

0

0

TY Exports

0

0

0

0

0

0

Feed and Residual

8035

8035

8000

7850

0

7600

FSI Consumption

2215

2215

2100

2250

0

2300

Total Consumption

10250

10250

10100

10100

0

9900

Ending Stocks

1860

1860

1837

1835

0

1814

Total Distribution

12110

12110

11937

11935

0

11714

(1000 HA) ,(1000 MT)

Import Trade Matrix

Country

Korea, Republic of

Commodity

Corn

Time Period

Oct/Sept

Units:

1,000MT

Imports for:

2013

2014

U.S.

4611

U.S.

4022

Others

Others

Brazil

1980

Brazil

2079

Ukraine

1760

Ukraine

1750

Russia

804

Russia

623

Serbia

406

Serbia

492

Argentina

358

Argentina

435

South Africa

167

South Africa

147

Romania

110

Romania

198

Australia

59

Australia

47

Hungary

50

Hungary

312

France

49

Total for Others

5743

6083

Others not Listed

52

63

Grand Total

10406

10168

Korea: Corn Imports

(October/September, 1,000 MT, Customs Cleared Basis)

Marketing Year

From World

From the U. S.

U. S. Share

Feed

Food

Total

Feed

Food

Total

%

93/94

4,049

1,647

5,696

199

181

380

7

94/95

6,463

1,760

8,223

6,192

1,420

7,612

93

95/96

7,166

1,797

8,963

6,855

1,699

8,554

95

96/97

6,455

1,881

8,336

3,869

1,629

5,498

66

97/98

5,755

1,773

7,528

1,610

1,699

3,309

44

98/99

5,593

1,921

7,514

4,543

1,891

6,434

86

99/00

6,618

2,060

8,678

1,610

1,620

3,230

37

00/01

6,568

2,155

8,723

2,169

1,120

3,289

38

01/02

6,474

2,128

8,602

1,487

111

1,598

19

02/03

6,657

2,137

8,794

306

24

330

4

03/04

6,659

2,117

8,776

2,921

336

3,257

37

04/05

6,739

1,895

8,634

2,303

190

2,493

29

05/06

6,507

1,975

8,482

4,813

561

5,374

63

06/07

6,860

1,871

8,731

4,036

150

4,186

48

07/08

7,680

1,629

9,309

7,259

1,077

8,336

90

08/09

5,781

1,431

7,212

4,883

921

5,804

80

09/10

6,457

2,003

8,460

6,097

1,407

7,504

89

10/11

6,060

2,047

8,107

5,183

1,133

6,316

78

11/12

5,600

2,035

7,635

3,450

307

3,757

49

12/13

6,230

1,944

8,174

341

115

456

6

13/14

8,319

2,086

10,405

3,769

842

4,611

44

14/15

8,055

2,112

10,167

3,495

527

4,022

40

Korea: Total Corn Utilization

(October/September, 1,000 MT)

Marketing

Year

Feed

Processing

a/

Food

b/

Total

1998/99

5,560

1,886

80

7,526

1999/00

6,541

2,004

79

8,624

2000/01

6,460

2,092

64

8,616

2001/02

6,584

2,094

57

8,735

2002/03

6,569

2,145

68

8,782

2003/04

6,614

2,057

51

8,722

2004/05

6,619

1,966

81

8,666

2005/06

6,510

1,996

73

8,579

2006/07

6,897

1,856

63

8,833

2007/08

7,046

1,495

92

8,633

2008/09

6,368

1,418

108

7,894

2009/10

6,362

1,928

92

8,382

2010/11

6,074

2,051

89

8,214

2011/12

5,690

2,036

89

7,815

2012/13

6,483

1,900

98

8,481

2013/14

7,762

2,034

95

9,891

2014/15

8,035

2,118

97

10,250

Source: Korea Feed Association (KFA), Korea Corn Processing Industry Association (KOCPIA)

a/ Used for wet and dry milling process based on imported corn.

b/ For on-farm human consumption (on-the-cob) or snack food consumed on-the-cob, as puffed kernels or as corn tea. Imported white corn for popping has been included since MY 2004.

Korea: Processing Corn Consumption

(October/September, 1,000 MT)

Marketing Year

Wet Milling

Dry Milling

Total

1998/99

1,670

216

1,886

1999/00

1,783

221

2,004

2000/01

1,880

204

2,092

2001/02

1,911

181

2,092

2002/03

1,929

180

2,109

2003/04

1,892

165

2,057

2004/05

1,837

129

1,966

2005/06

1,896

100

1,996

2006/07

1,752

105

1,857

2007/08

1,405

90

1,495

2008/09

1,343

74

1,417

2009/10

1,864

76

1,940

2010/11

1,979

72

2,051

2011/12

1,969

67

2,036

2012/13

1,832

68

1,900

2013/14

1,963

71

2,034

2014/15

2,039

79

2,118

Rice, Milled

Production:

MY 2016/17 rice production is forecast to remain around 4 million metric tons (MMT) – down 8 percent from 4.33 MMT in 2015/16 – based on five year average yield. According to a Korea Rural Economic Institute (KREI) survey of rice farmers from December 28, 2015 - January 4, 2016, planted area is expected to decline to 781,716 HA, down about 2.2 percent from last year. However, high yield varieties will almost offset the lower acreage planted.

Yield

Rice farmers prefer planting high yield varieties to maximize returns. Consequently, increased yields are expected to offset the effects of declining paddy land in 2016 crop. The KREI forecasts rice average yields at 507Kg/10a based on previous five-year average yield.

KREI forecasts for the 2016 crop and Ministry of Agriculture, Food and Rural Affairs (MAFRA) historical data are shown in the following tables.

Korea: Rice Area, Yield and Production

Crop Year

Area (1,00HA)

Yield (KG/HA)

Production (Milled, 1,000 MT)

2002 a/

1,053

4,679

4,927

2003 b/

1,016

4,381

4,451

2004

1,001

4,995

5,000

2005

980

4,865

4,768

2006

955

4,901

4,680

2007

950

4,640

4,408

2008

936

5,174

4,843

2009

924

5,318

4,916

2010

892

4,815

4,295

2011

854

4,946

4,224

2012

849

4,718

4,006

2013

833

5,081

4,230

2014

816

5,200

4,241

2015

799

5,416

4,327

2016p

782

5,072 c/

3,966

Source: Ministry of Agriculture, Food and Rural Affairs (MAFRA)

a/ Heavy rains during the summer and the effects of typhoon Rusa (Aug 31 – Sep 1)

b/ Cool and rainy days during the growing season and the effects of typhoon Maemi (Sep 9 - 12)

c/ previous five- year average yield

Production Policy:

Rice farmers receive two types of income support payments under the Rice Income Compensation Act (RICA), an area payment and a deficiency payment. In CY 2015, combined support payments of 1,562 billion Korean Won (USD 1.38 billion) were received from both direct payment systems. It was a record level of combined support payment which has been implemented since 2005.

An explanation of how these payments are calculated follows.

Area Payment: This payment is made on a 'per hectare' basis and is calculated using the average area of rice production during the base period 1998-2000. The 2015 area payment was at 998,892 won (USD 884) on average per hectare. Paddy area covered under this support program increased to 843,752 hectare, up one percent from the previous year.

Deficiency Payment: The deficiency payment is 85 percent of the difference between the national-average market price during the 2015 harvest season (2015 Oct.-2016 Jan.) and the 2015 target price, less the area payment.

In CY 2015, the deficiency payment amounted to 719 billion Korean Won (USD 636 million) since the difference between the average harvest price of 1,883 on (USD 1.67) per kilogram (milled) and the target price of 2,350 Won (USD 2.08) per kilogram (milled) was enough to create a deficiency payment. The weighted averaged area payment of 998,892 Won per hectare is converted to a kilogram equivalent (198 Won/Kg) by dividing it by the 1999-2003 Olympic average yields*, which was increased to 5,040 Kg per hectare from the previous 4,880 Kg in CY 2012.

Due to lower farm gate prices during the harvest season, farmers received deficiency payments in CY 2015. The deficiency payment calculation is shown as below.

[(Target Price W/kg - Average Harvest Price W/kg) x .85] - Area Payment per HA /Avg. National Yield per HA

[W 2,350 – W 1,883] x .85] – W 800,919/5,040 MT = W 199 per kilogram

Note: *Olympic average yields: an average during a 5-year period, dropping the highest and lowest values.

Government Rice Purchase Program under the Public Food Grain Stockholding Program (PFSP):

The government purchases rice to ensure food security and price stability. Under the Public Food Grain Stockholding Program (PFSP), the Korean government procures domestic paddy rice during the harvest season (October-December) at the average market price and later sells it during the non-harvest periods at the prevailing domestic market price. For October - December 2015, the Korean government purchased 560,000 MT (milled basis) of paddy rice which included additional purchases of 200,000 MT to stabilize harvest pressure caused by another bumper crop, or 13 percent of the 2015 rice production under PFSP. In late February 2016, Korean government made the decision to purchase an additional 157,000 MT following its previous purchase of 560,000 tons to prop up farm gate prices, resulting in 717,000 MT of total government purchase, or 16.5 percent of total production.

Additionally, the government purchased 30,000 tons for the APTERR (ASEAN Plus Three Emergency Rice Reserve), which was established to provide member countries with rice in the event of natural disasters. The total amount of rice agreed upon in July 2013 by the 13 member countries, and stored in reserve, was 787,000 MT, including 150,000 MT promised by Korea.

Rice Millers Purchase:

Rice Processing Complexes (RPC), Korean rice millers, have purchased 2.2 MMT (milled basis) of paddy rice under the National Agricultural Cooperative Federation (NACF) loan program to rice millers at a free loan rate during the harvest season. NACF member RPCs purchased 1.8 MMT and independent RPCs bought 0.4 MMT, respectively. The Korean government also supports rice millers to purchase paddy rice under an incentive loan program at a loan rate ranging from zero to two percent according to an evaluation of RPCs based on government guidelines. Total amount of loan program was at 2.9 trillion Korean won (USD 2.57 billion), consisting of 1.3 trillion from NACF and 1.6 trillion from government supports.

Consumption:

MY 2016/17 consumption is forecast at 4.3 MMT, slightly down from the estimates of the current marketing year. Imported rice constitutes about nine percent of total consumption.

Korean consumers prefer short grain table rice and 76 percent of domestic production (all short grain) was consumed as table rice in MY 2014/15. Per capita table rice consumption continues to decline as eating habits change due to rising incomes and the growing popularity of Western foods. Annual per capita table rice consumption reached its peak at 136.4 Kg in 1970, and has gradually declined to 62.9 Kg in MY 2014/15 according to preliminary government statistics. FAS/Seoul forecasts per capita table rice consumption at 61.0 Kg in MY 2015/16, based on declining consumption trends for table rice, decreasing further to less than 60.0 Kg in MY 2016/17.

Although processing accounts for only about 13 percent of total rice domestic consumption in MY 2014/15, consumption of rice for food processing has maintained growth in the past few years. However, in MY 2015/16, Korea's food processing industry is expected to remain stagnant at 450,000 tons of rice (milled), while liquor processing is depending on the availability of rancid rice in old stocks at a cheaper price equivalent to imported tapioca pellet prices.

Feed:

Korean government released 99,000 MT of brown rice (2012 crop) in February 2016, which is equivalent to 89,100 MT in milled basis, for feed purposes for the first time to reduce higher ending stocks. Released price was at 200 Korean won per Kg (USD0.18/Kg), a tenth of purchasing price.

Korea: Rice Utilization Pattern

(1,000 MT, milled)

Rice Year (November - October)

MY 2013/14a/

MY 2014/15b/

MY 2015/16c/

MY 2016/17c/

Table Rice

3,340

3,239

3,140

3,100

Processing

535

576

700

700

(for food)

(457)

(420)

(450)

(450)

(for liquor)

(78)

(156)

(150)

(150)

(for feed)

0

0

(100)

(100)

Seed

35

35

34

34

Other and Loss

512

500

500

500

Total Demand

4,422

4,350

4,374

4,334

Per Capita Table Rice Consumption (Kg)

65.1

62.9

61.0

59.0

Source: Ministry of Agriculture, Food and Rural Affairs (MAFRA)

a/ Revised b/ FAS/Seoul estimate c/ FAS/Seoul forecast

Korea: Processing Rice Consumption Pattern

(1,000 MT, milled)

Purpose

MY 2011/12

MY 2012/13

MY 2013/14 a/

MY 2014/15 b/

KRFA

248

246

227

197

KALIA

148

56

78

156

Others c/

170

224

238

223

Total

566

526

535

576

Source: Ministry of Agriculture, Food and Rural Affairs (MAFRA)

a/ MAFRA Revised

b/ MAFRA Preliminary

c/ traditional foods or beverage made of local rice.

Note: Korea Rice Foodstuffs Association (KRFA), Korea Alcohol & Liquor Industry Association (KALIA)

Trade:

The Korean government submitted a draft containing modifications and rectifications to “Schedule LX - Republic of Korea" to the WTO on September 30, 2014, which allowed Korea to implement ordinary customs duties on rice beginning January 1, 2015. However, five countries reserved their positions with respect to the proposed rectification and modification of the Republic of Korea's tariff schedule concerning rice market access. Korea continues to engage in bilateral discussions with the concerned countries for settlement of the issue. The United States is working closely with Korea to urge it to ensure that the new arrangement takes appropriate account of the U.S. strong trading relationship in this commodity.

As agreed in the special treatment, Korea continued to import the mandatory import volume of 408,700 metric tons from Most Favored Nation (MFN) countries at the current duty level of 5 percent under the tariff rate quota (TRQ) regime in 2015 and beyond. Korea deleted provisions about usage purpose, such as the ratio of table rice (30 percent) and guaranteed access to the domestic market.

Imports:

MY 2016/17 rice imports are forecast at about 410,000 MT (milled basis). Korea is expected to continue purchasing 408,700 tons (milled basis) of rice under CY 2017 TRQ.

In MY 2015/16, rice imports are expected to remain unchanged at 470,000 MT from the previous report, while actual delivery of some portion of the TRQ will roll over into the following year. U.S. rice exports are expected to stay around 140,000 MT (milled basis).

In MY 2014/15, Korea's rice imports were 464,892 MT, consisting of 217,855 MT imported under the 2014 MMA quota and 247,037 MT imported under 2015 TRQ, respectively. In CY 2015, U.S. exports to Korea amounted to 142,806 MT, which is composed of 34,114MT imported under 2014 MMA quota and 108,682 MT imported under 2015 TRQ, respectively.

2016 TRQ Tendering Process:

Under the 2016 Tariff Rate Quota (TRQ) purchasing plan, Korea will purchase 408,700 MT of rice (milled basis) under rice tariffication in effect since 2015. Under the 2016 TRQ thus far, Korea has bought 69,444 MT of brown rice for processing purposes or 17 percent of the total 2016 TRQ, consisting of 42,222 MT of medium-grain brown rice (38,000 MT on milled basis) from the United States, 5,000 MT of broken milled rice from India and 22,222 MT of Chinese short grain brown rice (20,000 MT on milled basis), respectively.

Korea: 2016 TRQ Rice Tender Results

(as of March 30, 2016)

Bid Date (mm-dd-yy)

Rice Type

Volume (Contract Basis)

Volume (Milled Rice Basis)

Origin

Price (US$/MT)

Terms and Conditions

delivery Due

Agent

Supplier

2/29/2016

MG #3 Brown

10,000

9,000

USA

734.42

CIP

20160531

Philasun

ADM

2/29/2016

MG #3 Brown

10,000

9,000

USA

698.61

CIP

20160630

Philasun

ADM

2/29/2016

#4 Brewer's Milled

5,000

5,000

India

383.46

CIP

20160531

Singsong

KRBL Limited

3/29/2016

SG #3 Brown

22,222

20,000

China

869.00

CIP

20160930

Daewoo

COFCO

3/29/2016

MG #3 Brown

16,667

15,000

USA

679.27

CIP

20160930

Philasun

ADM

3/29/2016

MG #3 Brown

5,555

5,000

USA

651.17

CIP

20160930

Philasun

ADM

Total

69,444

63,000

Source: Korea Agro-Fisheries and Food Trade Corporation (aT)

2015 MMA Tendering Results:

The Korea Agro-Fisheries and Food Trade Corporation (aT) completed the tendering process for the 2015 Tariff Rate Quota (TRQ) commitments for rice on December 30, 2015. Korea purchased a total of 408,700 metric tons (MT) of rice (milled basis) from the United States, China, Thailand, Australia, and Vietnam. The U.S. share was a record 38 percent, up about 2.6 times from the previous year due to more competitive pricing than other countries in tandem with greater demand for medium grain variety, with contracts totaling 157,117 MT (milled) worth USD 142.6 million. U.S. contracts of 130,130 MT were for brown rice (equivalent to 117,117 MT on milled basis) for food processing purpose, while the remaining 40,000 MT was milled rice for table purpose. The Korean government purchased 60,000 MT of milled rice for table purpose, half of the previous year, consisting of 40,000 MT of USDA No. 1 medium grain from the United States and 20,000 MT of USDA No. 1 short grain from China.

Auctions:

Korea Agro-Fisheries & Food Trade Corporation (aT) sells table rice shipments through a public auction system, while the Ministry of Agriculture, Food and Rural Affairs (MAFRA) distributes processing rice to end-users such as food processors and alcoholic beverage producers at a set price throughout the year.

In response to more favorable consumer confidence in U.S. medium grain milled rice, greater demand for U.S. milled rice made auctions of USDA No. 1 higher than other origins. Ongoing auctions of U.S. medium grain milled rice (USDA No. 1) account for 63 percent while Chinese short grain milled rice are 43 percent. The overall progress of auctioning has been comparably slower than normal in order to prop up domestic rice prices caused by the record harvest of the new crop.

Exports:

Korea's rice exports were 1,987 MT in CY 2015, with U.S. imports of Korean rice higher than the previous year.

As Korea and China mutually agreed upon SPS requirements, Korea is expected to increase rice exports to 4,000 MT in MY 2015/16.

Korea: Rice Export

(Milled)

Calendar Year

To the World

To the United States

Quantity (MT)

Value (US$1,000)

Quantity (MT)

Value (US$1,000)

2005

18

89

5

5

2006

9

40

0.2

1

2007

507

1,322

333

876

2008

356

829

115

285

2009

4,183

7,300

443

777

2010

3,765

6,394

272

587

2011

3,782

6,277

161

244

2012

2,223

4,424

90

185

2013

1,517

3,363

86

180

2014

1,684

3,894

123

303

2015

1,987

4,472

365

1,148

Source: Korea Customs Service (KCS)

Stocks:

MY 2016/17 ending stocks (at the end of October 2015) are projected to increase to 1.74 MMT or 40 percent of total consumption due to overproduction caused by higher yield varieties recent years. MY 2015/16 stocks (at the end of October 2016) are forecast at 1.67 MMT or 38 percent of total domestic consumption. MY 2014/15 stocks (at the end of October 2015) are estimated at about 1.25million tons or 29 percent of total domestic consumption.

Korea: Status of Rice Stocks

(Milled rice, 1,000 MT, as of end October)

Rice Year (Nov.-Oct.)

2011/12

2012/13

2013/14a/

2014/15b/

2015/16c/

2016/17c/

Total

730

755

899

1,253

1,672

1,744

Government Stock

730

755

899

1,253

1,672

1,744

-Domestic Rice

487

na

na

na

na

na

-Imported Rice

243

na

na

na

na

na

Civil Stock

0

0

0

0

0

0

Source: FAS/Seoul Estimate based on MAFRA data

a/ MAFRA Preliminary

b/ FAS/Seoul Preliminary

c/ FAS/Seoul forecast

Rice, Milled

2014/2015

2015/2016

2016/2017

Market Begin Year

Nov 2014

Nov 2015

Nov 2016

Korea, Republic of

USDA Official

New Post

USDA Official

New Post

USDA Official

New Post

Area Harvested

816

816

799

799

0

782

Beginning Stocks

899

899

1188

1253

0

1672

Milled Production

4241

4241

4327

4327

0

4000

Rough Production

5638

5638

5771

5771

0

5333

Milling Rate (.9999)

7522

7522

7498

7498

0

7500

MY Imports

465

465

470

470

0

410

TY Imports

372

372

410

410

0

410

TY Imp. from U.S.

154

143

0

140

0

140

Total Supply

5605

5605

5985

6050

0

6082

MY Exports

2

2

4

4

0

4

TY Exports

2

2

4

4

0

4

Consumption and Residual

4415

4350

4390

4374

0

4334

Ending Stocks

1188

1253

1591

1672

0

1744

Total Distribution

5605

5605

5985

6050

0

6082

(1000 HA) ,(1000 MT)