Report Highlights:

Post revises rice production upward, despite a decline in planted area, based on record average yields of 5.33 MT/ha, due to favorable weather in September. Rice production is now estimated at 4.26 MMT in MY 2015/16. As a result, ending stocks are expected to increase by 300,000 MT to 1.5 MMT. MY 2015/16 wheat consumption and imports remain unchanged at 3.85 MMT and 4.0 MMT, respectively, while MY 2015/16 corn consumption is raised slightly to 10.1 MMT due to sustained high levels of animal inventories, and imports are increased to 10 MMT.

WHEAT Production:

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

3.55

35,800

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

a/ FAS/Seoul forecast; yield is based on five year average.

Consumption:

The MY 2015/16 wheat consumption forecast remains unchanged at 3.85 million tons from the earlier forecast. The feed wheat consumption forecast remains unchanged at 1.5 million tons from the earlier forecast.

Korea: Post Estimates of Domestic Wheat Use

(1,000 MT, July/June)

Year

2012/13

2013/14

2014/15c/

2015/16c/

Imported Milling Wheat 1/

2,193

2,132

2,165

2,150

Imported Milling Wheat 2/

167

180

180

180

Flour Imports a/

39

30

44

35

Flour Exports a/

62

58

61

65

Pasta Imports a/

135

150

143

155

Pasta Exports a/

130

140

135

140

Local Wheat

37

27

23

36

FSI Consumptionb/

2,379

2,321

2,359

2,351

Feed Wheat

2,818

1,936

1,479

1,500

Total Consumptionb/

5,197

4,257

3,838

3,851

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: Monthly Wheat Use

(1,000 MT)

Month

Feed Wheat

Milling Wheat a/

MY 2014/15

MY 2015/16

MY 2014/15

MY 2015/16

July

129

124

183

181

August

121

119

175

170

Subtotal

250

243

358

351

September

126

na

166

na

October

134

na

179

na

November

130

na

172

na

December

143

na

186

na

January

115

na

194

na

February

103

na

152

na

March

116

na

183

na

April

117

na

176

na

May

119

na

172

na

June

125

na

177

na

Total

1,479

na

2,115

na

Source: KFA and KOFMIA

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

Trade:

MY 2015/16 wheat import forecast remains unchanged from the initial projection of 4 million tons, of which, 2.5 million tons are for milling (including flour and pasta imports on a wheat equivalent basis) and 1.5 million tons for feed. Milling wheat for flour processing is expected to stay around 2.3 million tons. The import forecast hinges to a large extent on the continued availability of feed wheat, while milling wheat demand remains stagnant.

As of early October 2015, Korean feed millers have completed contracts for delivery of feed grade wheat for the first ten months of MY 2015/2016 (Jul/Jun) at around 1.3 million tons, as feed grade wheat has been less competitive than corn for feed.

Korea: MY 2015/16 Feed Wheat Contractsby Estimated Time of Arrival (ETA)

(Unit: 1,000 MT, as of Sept. 22, 2015)

ETA

Quantity

Price (USD/MT)1/

Jul. 2015

0

0

Aug.

233

213.96

Sep.

159

205.77

Oct.

232

203.47

Nov.

116

202.60

Dec.

55

205.30

Jan. 2016

123

201.77

Feb.

85

200.73

Mar.

120

198.47

Apr.

160

195.92

Total

1,286

Source: Local Grain Traders

1/ CNF on Weighted Average

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/

1,500

2,300

40

160

4,000

Source: Korea Customs Service

1/ Wheat basis

2/ FAS/Seoul forecast

Korea: MY 20015/16 Monthly Wheat Imports by Origin

(1,000 MT, based on Customs Clearance)

Country

U. S.

Australia

Canada

India

Other

Total

Milling Wheat

2015 July

116

114

13

0

1

244

August

37

96

0

0

0

133

September

96

94

33

0

1

224

Total(Jul-Sep) 2015

248

304

47

0

2

600

Total(Jul-Sep) 2014

302

185

62

0

0

550

Feed Wheat

2015 July

0

0

0

0

162

162

August

0

0

0

0

58

58

September

0

0

0

0

211

211

Total(Jul-Sep) 2015

0

0

0

0

431a/

431

Total(Jul-Sep) 2014

47

0

99

10

115

271

Total Wheat

2015 July

116

114

13

0

163

406

August

37

96

0

0

58

191

September

96

94

33

0

212

435

Total(Jul-Sep) 2015

248

304

46

0

432

1,033

Total(Jul-Sep) 2014

349

185

160

10

115

821

Source: Korea Customs Service

a/ Ukraine (166,104 MT); France (159,979 MT); Bulgaria (63,922 MT); Denmark (42,039 MT)

Wheat

2013/2014

2014/2015

2015/2016

Market Begin Year

Jul 2013

Jul 2014

July 2016

Korea, Republic of

USDA Official

New Post

USDA Official

New Post

USDA Official

New Post

Area Harvested

7

7

7

7

10

10

Beginning Stocks

1521

1521

1437

1402

1411

1339

Production

27

27

23

23

36

36

MY Imports

4288

4309

3942

3948

4200

4000

TY Imports

4288

4309

3942

3948

4200

4000

TY Imp. from U.S.

1409

1220

1160

1234

0

1300

Total Supply

5836

5857

5402

5373

5647

5375

MY Exports

144

198

153

196

150

200

TY Exports

144

198

153

196

150

200

Feed and Residual

1936

1936

1479

1479

1500

1500

FSI Consumption

2319

2321

2359

2359

2351

2351

Total Consumption

4255

4257

3838

3838

3851

3851

Ending Stocks

1437

1402

1411

1339

1646

1324

Total Distribution

5836

5857

5402

5373

5647

5375

(1000 HA) ,(1000 MT)

CORN

Production:

Post's corn production estimate remains unchanged from the previous report based on the preceding five-year average yield. The Korean government is expected to release official production figures for 2015 in May 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/

15,800

4.91

77,640

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

a/ FAS/Seoul projection based on five-year average yield

Consumption:

The MY 2015/16 corn consumption forecast has been revised to 10.1 million tons, up 0.1 million tons from post's previous forecast due to greater demand for feed grade corn in view of maintaining higher levels of animal inventories, meanwhile corn consumption for food and processing purposes remains stagnant at 2.1 million tons.

MY 2014/15 corn consumption estimate is revised up to 10.2 million tons from the previous forecast due to greater demand of food processing purpose, which is composed of 8 million tons for feed purposes and 2.2 million tons for food, seed and industrial (FSI) purposes.

On the basis of the first eleven months, MY 2014/15 compound feed production is expected to stay around 19 million tons due to strong growth in the poultry sector offsetting the reduction in beef and dairy cattle, while swine numbers stayed strong and steady despite slow growth of animal inventory affected by the earlier outbreaks of FMD and PED. For the first eleven months, poultry compound feed production increased by 8.5 percent and swine by 0.3 percent, respectively, over the same period in the previous marketing year, while compound feed production for cattle declined by 6.5 percent.

The corn inclusion rate in total compound feed production is expected to be at 42 percent in MY 2014/15, up one percent from the previous year, with feed wheat use declining.

Major corn processors have continued using conventional corn imported from Serbia, Brazil, Ukraine, Russia, Hungary, Romania, Australia and Bulgaria, and non-GM corn imported from the United States for food. Many Korean food processing companies are reluctant to use ingredients sourced from biotech corn.

Korea: Total Corn Utilization

(Oct./Sept., 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 c/

8,000

2,100

93

10,193

2015/16 d/

8,000

2,000

95

10,095

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/ based on the imports for the first eleven months.

d/ FAS Seoul forecast

Korea: Monthly Corn Use

(1,000 MT)

Month

Feed Corn

Processing Corn

MY 2013/14

MY 2014/15

MY 2013/14

MY 2014/15

October

588

676

175

180

November

596

621

165

178

December

687

707

164

169

January

703

635

161

170

February

632

602

148

155

March

653

668

180

187

April

664

658

171

178

May

669

679

177

182

June

646

703

176

181

July

659

701

184

183

August

626

655

175

181

S. Total

7,092

7,303

1,876

1,945

September

639

na

159

na

Total

7,762

na

2,034

na

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

Korea: Feed Ingredient Use for Compound Feed Production

(October/September, 1,000 MT)

Items

MY 2012/13

MY 2013/14

MY 2014/15a/

MY 2015/16b/

Sub. Total Grains and Grain Substitutes

12,115

12,080

12,200

12,200

- Wheat

2,710

1,633

1,470

1,500

- Corn

6,483

7,762

8,000

8,000

- Other Grains and Grain Substitute c/

2,992

2,685

2,730

2,700

Others d/

6,698

6,758

6,800

6,800

Grand Total

18,883

18,838

19,000

19,000

Source: Korea Feed Association (KFA)

a/ FAS Seoul estimate based on the feed ingredient use for the first eleven months

b/ FAS Seoul forecast

c/ includes Tapioca, bran and gluten feed.

d/ 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 2012/13

MY 2013/14a/

MY 2014/15b/

MY 2015/16c/

Poultry

4,726

5,107

5,500

5,400

Swine

6,100

6,015

6,100

6,300

Cattle

6,572

6,388

6,000

5,900

Others d/

1,483

1,314

1,400

1,400

Total

18,881

18,824

19,000

19,000

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

a/ Preliminary

b/ FAS/Seoul estimate based on feed production for the first eleven months

c/ FAS/Seoul forecast

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

Korea: Compound Feed Production Comparison by Species for the First Eleven Months

(October/May, 1,000 MT)

Species

MY 2013/14

MY 2014/15

Change

Poultry

4,695

5,096

+8.5

Swine

5,518

5,534

+0.3

Cattle

5,869

5,488

-6.5

Others

1,205

1,268

+5.2

Total

17,245

17,386

+0.8

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

Trade:

MY 2015/16 total corn imports are forecast at 10 million tons, up 0.2 million tons from post's earlier forecast due to continued high animal inventories. Processing corn imports is expected to remain stagnant at 2 million tons. As of early October 2015, Korean buyers have almost completed delivery of corn contracts for the first five months of the current marketing year 2015/16, approaching about four million tons, and continue to make new contracts for delivery in March 2015 onward.

Most of the contracted purchases to date were from worldwide sources including South America, Eastern Europe and the United States at seller's option. In view of global corn prices, grain traders predict for the time that most of the contracts will be shipped from the United States, South America, Eastern Europe or Black Sea.

In MY 2014/15, total corn imports were completed at 10.2 million tons, up 0.2 million tons from the Post's earlier estimate of 10 million tons to meet a greater demand for both feed corn and corn processing, but down 0.2 million tons from the record corn imports in the previous year. U.S. corn dominated the Korean market, supplying about 40 percent of total imports, followed by Brazil (20 percent), Ukraine (17 percent) and Russia (6 percent); however, it is a decline in market share from the previous marketing year.

Korea: Corn Imports

(1,000MT, Customs Cleared Basis)

From World

From the U. S.

U. S. Share

Marketing Year

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/

8,000

2,000

10,000

3,500

500

4,000

40

Source: Korea Customs Service

a/ FAS/Seoul forecast

Korea: Monthly Corn Import

(1,000 MT, Customs Cleared Basis)

Month

Feed Corn

Processing Corn

MY 2013/14

MY 2014/15

MY 2013/14

MY 2014/15

October

620

846

131

181

November

631

465

178

183

December

975

750

222

137

January

885

743

118

168

February

829

558

170

138

March

488

636

158

258

April

664

759

234

145

May

698

689

166

162

June

540

636

300

208

July

591

693

85

166

August

658

671

112

177

September

740

609

212

188

Total

8,319

8,055

2,086

2,112

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

(Unit: 1,000 MT, as of Sep. 2015)

ETA

U.S.

Europe 4/

SOAM

Others 2/

Total

Price3/

Oct. 2015

55

0

0

888

943

195

Nov.

0

108

0

678

786

195

Dec.

0

100

0

610

710

189

Jan. 2016

0

60

0

548

608

190

Feb.

0

60

0

586

646

187

Mar.

0

0

0

264

264

187

Jun.

0

0

0

50

50

199

Total

55

328

0

3,624

4,007

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

Corn

2013/2014

2014/2015

2015/2016

Market Begin Year

Oct 2013

Oct 2014

Oct 2016

Korea, Republic of

USDA Official

New Post

USDA Official

New Post

USDA Official

New Post

Area Harvested

16

16

16

16

16

16

Beginning Stocks

1265

1265

1860

1859

1842

1909

Production

80

80

82

82

77

77

MY Imports

10406

10405

10000

10168

10000

10000

TY Imports

10406

10405

10000

10168

10000

10000

TY Imp. from U.S.

5312

4611

0

4022

0

4000

Total Supply

11751

11750

11942

12109

11919

11986

MY Exports

0

0

0

0

0

0

TY Exports

0

0

0

0

0

0

Feed and Residual

7762

7762

8000

8000

8000

8000

FSI Consumption

2129

2129

2100

2200

2100

2100

Total Consumption

9891

9891

10100

10200

10100

10100

Ending Stocks

1860

1859

1842

1909

1819

1886

Total Distribution

11751

11750

11942

12109

11919

11986

(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

Hungary

312

Romania

110

Romania

198

Australia

59

South Africa

147

Hungary

50

Australia

47

France

49


Total for Others

5743

6083

Others not Listed

51

63

Grand Total

10405

10168

Korea: Animal Inventory

(1,000 Head, 1,000 Birds, as of September 2015)

Animal

Year

March

June

September

December

Beef Cattle

2011

2,881

3,053

3,044

2,950

2012

2,940

3,109

3,143

3,059

2013

2,966

3,064

3,043

2,918

2014

2,811

2,879

2,820

2,759

2015

2,659

2,748

2,753

2,680d/

Dairy Cattle

2011

396

403

404

404

2012

404

410

417

420

2013

420

419

422

424

2014

428

424

429

431

2015

425

418

418

410-412c/

Swine

2011

7,036

7,330

7,783

8,171

2012

8,852

9,432

9,937

9,916

2013

10,107

10,181

10,188

9,912

2014

9,698

9,680

9,966

10,090

2015

9,971

10,018

10,332

10,100-10,300c/

Layer a/

2010

62,524

61,586

60,095

61,700

2011

61,025

60,723

61,212

62,425

2012

63,200

61,953

61,326

61,344

2013

62,340

60,610

62,674

64,824

2014

64,572

62,851

65,263

67,674

2015

68,878

67,907

72,090

na

Broiler b/

2010

72,692

101,690

71,271

77,871

2011

69,932

110,122

71,038

76,435

2012

69,387

97,750

68,540

76,130

2013

71,938

95,898

64,505

76,487

2014

77,879

103,593

75,846

77,746

2015

82,749

110,489

81,184

na

Source: Korea Statistics (KOSTAT) and Korea Rural Economic Institute (KREI)

a/ Excluding breeders.

b/ Excluding multi-use broilers

c/ KREI forecast

d/ FAS Seoul forecast

RICE

PRODUCTION

Statistics Korea (KOSTAT) released 2015 rice production estimate at 4.26 million metric tons (MMT) based on a nationwide survey of 6,500 rice fields conducted from September 15 to 21, 2015.

The survey results show total harvested acreage at 799,344 HA, which is a 2.0 percent decline from the previous year. However, despite declining acreage, favorable weather in September during the critical filling stage resulted in the highest recorded yield, reaching a similar level compared with last year. KOSTAT is expected to release its final production estimate shortly after the rice harvest is completed in mid-November.

Therefore, Post's forecast for rice production in MY 2015/16 is revised up to 4.26 million metric tons (MMT), up 6.5 percent from the initial forecast of Korea's rice production.

Area

Rice area has continued to decrease annually – ranging from 5,000 HA to 38,000 HA every year since 2001. Area decrease in 2015 was similar level compared to last year in response to a greater demand from housing and building complexes and conversion of rice paddy land to upland for production of more profitable cash crops.

Yield

Favorable weather developments increased rice yields to 533Kg per 10 Are, up 2.5 percent from the previous year, which is the record level of bump crop in 2009.

Korea: Rice Area, Yield and Production

Crop

Year

Area

(1,00HA)

Yield

(KG/10A)

Production

(Milled, 1,000 MT)

2002 a/

1,053

471

4,927

2003 b/

1,016

441

4,451

2004

1,001

504

5,000

2005

980

490

4,768

2006

955

489

4,680

2007

950

464

4,408

2008

936

518

4,843

2009

925

532

4,916

2010

892

482

4,295

2011

854

495

4,224

2012

849

472

4,006

2013

833

508

4,230

2014

816

520

4,241

2015c/

799

533

4,260

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/ Statistics Korea (KOSTAT) estimate

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

The government also purchases rice for price stabilization purposes. Under the Public Food Grain Stockholding Program for Food Security, the Korean government will purchase domestic paddy rice during the harvest season (October-December) at the average market price and sell it during non-harvest periods at the prevailing domestic market price.

Between October and December 2015, the Korean government plans to purchase 360,000 MT (milled basis) of paddy rice representing around 9 percent of the estimated 2015 rice crop production. Additionally, the government plans to purchase 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 metric tons including 150,000 metric tons promised by Korea.

Korea: Government Rice Purchasesunder Public Food Grain Stockholding Program (PFSP)

Crop Year

Production(1,000 MT)

Purchase(1,000 MT)

%

2005

4,768

719

15.1

2006

4,680

504

10.8

2007

4,408

417

9.5

2008

4,843

400

8.3

2009

4,916

370

7.5

2010

4,295

340

7.9

2011

4,224

261

6.2

2012

4,006

363

9.1

2013

4,230

367

8.7

2014

4,241

610a/

14.4

2015plan

4,260

360

8.5

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

a/ includes 240,000 MT to stabilize rice market in addition to 370,000 MT under PFSP.

Government and NACF's Loan Programs

The Korean government is expected to provide loans for rice millers worth more than 1.2 trillion Korean Won (US$1 billion) with a special loan rate between 0 and 2 percent per annum this year. The National Agricultural Cooperative Federation (NACF), the national farmers group, also continues to provide about 1.3 trillion Korean Won (US$1.1 billion) worth of loans to rice farmers/millers with zero interest rate. The main goal of the loan programs is to encourage rice millers to purchase more rice from farmers minimizing the downward pressure of harvest on prices in the rice market. Another bumper crop has caused concerns with rice farmers over the collapsing farm gate price compounded by anxiety over rice market liberalization that has taken effect early this year.

Most rice purchases under the loan programs provided by the Korean government and the NACF will be introduced into the rice retail market through NACF's Rice Processing Complexes (RPCs) and independent RPCs throughout the 2015/16 (Nov/Oct) rice marketing year. Korean rice farmers expect the purchasing measures will help prop up prices during the rice harvest season.

Rice farmers are expected to sell approximately 2 million metric tons during the harvest season including 390,000 MT of government direct purchasing under the Public Food Grain Stockholding Program and APTERR, and 1.6 million metric tons of rice under loan programs.

Korea: NACF Rice Purchasesa/

Crop Year

Production(1,000 MT)

Purchase(1,000 MT)

%

2005

4,768

1,071

22

2006

4,680

1,306

28

2007

4,408

1,227

28

2008

4,843

1,617

33

2009

4,916

1,950

40

2010

4,295

1,380

32

2011

4,224

1,327

31

2012

4,006

1,331

33

2013

4,230

1,465

35

2014

4,241

1,650

39

2015

4,260

na

na

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

a/ exclude independent RPC purchases

b/ plan

CONSUMPTION

The Korean government's preliminary rice consumption is at 4.42 million MT (MMT) for MY 2013/14 as table rice consumption continues declining. In MY 2014/15, total domestic rice consumption is estimated at 4.45 MMT. MY 2015/16 rice consumption is forecast to continue declining due to downtrend of per capita consumption (table rice basis).

Korea: Rice Utilization Pattern

(1,000 MT, milled)

Rice Year (Nov. - Oct.)

MY 2012/13a/

MY 2013/14b/

MY 2014/15c/

MY 2015/16d/

Table Rice

3,435

3,340

3,280

3,220

Processing

526

535

550

600

(for food)

(470)

(457)

(460)

(460)

(for liquor)

(56)

(78)

(90)

(140)

Seed

36

35

35

35

Other and Loss

494

512

583

500

Total Demand

4,491

4,422

4,448

4,355

Per Capita Table Rice Consumption (Kg)

67.2

65.1

63.9

62.7

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

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

TRADE

In 2015, during the period of special treatment agreed upon under the Minimum Market Access agreement (MMA) ending in December 31, 2014, Korea continues to import the mandatory volume of 408,700 metric tons from Most Favored Nation (MFN) countries at the duty level of 5 percent under the tariff rate quota (TRQ) regime. Accordingly, the aT (Korea Agro-Fisheries and Food Trade Corporation), the government's state trading arm, manages the purchase of all imported rice through a tendering process and subsequent auctions off imported table rice.

2015 TRQ Tendering Process:

The Korean government has been making purchases for the 2015 TRQ of 408,700 MT since January 2015. As of August 4, 2015, the aT has purchased 315,524 metric tons of rice (milled basis), about 77 percent of the entire 2015 TRQ import commitment; consisting of 305,027 metric tons of brown rice for processing purposes, equivalent to 274,524 metric tons (milled), 30,000 metric tons of milled rice for table purpose, and 11,000 metric tons of milled broken rice for processing purpose, respectively. The Korean government is expected to continue purchases of the remaining 93,176 metric tons (milled) within calendar year 2015.

The United States has sold 112,352 metric tons of rice (milled basis) worth USD 105 million, about 27 percent of the 2015 entire TRQ; consisting of 102,352 metric tons of medium grain brown rice (or 92,117 metric tons in milled basis) for processing purposes and 20,000 metric tons of milled rice for table purposes, respectively.

Selling Auctions of Imported Rice:

aT sells table rice shipments to consumers 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.

As a result of increased consumer confidence in U.S. medium grain milled rice, auctions of USDA No. 3 milled rice finished in June 2015 ahead of rice from other origins. Ongoing auction prices of U.S. medium grain milled rice (USDA No. 1) are higher than Chinese short grain milled rice, reflecting higher consumer confidence in U.S. rice than other origins. The progress of auctioning for Chinese rice has been comparably slow, while Thai and Australian milled rice remains in warehouses.

Exports:

Korea's rice exports were 1,296 metric tons for the first eight months in CY 2015, with an expectation for the year of slightly less than 2,000 MT. U.S. imports of Korean rice are expected to be higher than the previous year for the period.

Stocks:

MY 2015/16 ending stocks (through the end of October 2016) are forecast to increase to 1.5 million tons or 35 percent of total anticipated consumption as rice production in the past three years has been greater than actual demand with the decline of per capita table rice consumption continuing. MY 2014/15 stocks (at the end of October 2015) are estimated at about 1.1 million tons or 26 percent of total domestic consumption.

Rice, Milled

2013/2014

2014/2015

2015/2016

Market Begin Year

Nov 2013

Nov 2014

Nov 2016

Korea, Republic of

USDA Official

New Post

USDA Official

New Post

USDA Official

New Post

Area Harvested

833

833

816

816

799

799

Beginning Stocks

780

780

899

899

1158

1140

Milled Production

4230

4230

4241

4241

4000

4260

Rough Production

5632

5632

5638

5638

5318

5663

Milling Rate (.9999)

7511

7511

7522

7522

7522

7522

MY Imports

313

313

470

450

410

470

TY Imports

379

379

450

370

410

410

TY Imp. from U.S.

38

38

0

140

0

140

Total Supply

5323

5323

5610

5590

5568

5870

MY Exports

2

2

2

2

2

2

TY Exports

2

2

2

2

2

2

Consumption and Residual

4422

4422

4450

4448

4360

4355

Ending Stocks

899

899

1158

1140

1206

1513

Total Distribution

5323

5323

5610

5590

5568

5870

(1000 HA) ,(1000 MT)