Production:

Corn production is negligible and accounts for less than one percent of total consumption. Planted area for MY 2015/16 is expected to remain steady at around 16,000 hectares, while production is forecast at 77,000 MT based on the preceding five-year average yield.

Statistics Korea (KOSTAT) recently released data on 2014 planting area at 15,839 hectares, down just 0.4 percent over the previous year. Post estimates Korea's corn production at about 78,000 metric tons based on the preceding five-year average yield. The government will release the 2014 official production figures in April 2015.

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

2014a/

15,839

4.90

77,600

2015b/

15,800

4.86

76,700

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

a/ FAS/Seoul forecast based on five-year average yield per corn harvest area KOSTAT released.

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

Consumption:

MY 2015/16 corn consumption is forecast to stay around 10 million MT, slightly down 0.1 million MT from the estimated record consumption in the current marketing year. Cattle farmers are expected to reduce their inventories due to a decreasing supply of calves until CY 2017. Feed corn consumption is projected to decrease to 7.9 million MT, down 0.1 million MT from the estimated current marketing year level in large part due to an anticipated decrease in compound feed production for the cattle sector. However, food, seed and industrial (FSI) corn consumption is expected to stay around 2.1 million MT to meet a constant demand for high fructose corn syrup (HFCS) and corn products from Korean food industries.

MY 2014/15 corn consumption remains unchanged at 10.1 million tons from the previous forecast, which is composed of 8 million tons for feed purpose and 2.1 million tons for food, seed and industrial (FSI) purpose. Greater demand for feed corn will offset the decrease of feed grade wheat, which is less competitive than corn in the global market.

Feed

Compound feed production is expected to remain around 18.8 million tons for both MY 2014/15 and MY 2015/16, respectively, due to strong growth in swine inventory which offsets the reduction in cattle, while poultry numbers stay strong and steady. Feed corn is expected to be the major ingredient used in compound feed, accounting for more than 40 percent of total ingredients for both marketing years.

Food

Corn processors continue using GM corn and non-biotech IP corn as well as 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 Hungary, Serbia, Romania and South Africa have been used for corn starch, HFCS and corn flour. The perceived public concern over biotech continues to exert pressures 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 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

Sub Total

3,206

3,241

813

852

March

653

na

180

na

April

664

na

171

na

May

669

na

177

na

June

646

na

176

na

July

659

na

184

na

August

626

na

175

na

September

639

na

159

na

Total

7,762

na

2,034

na

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

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

2,000

93

10,100

2015/16 c/

7,900

2,000

95

9,995

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 2012/13

MY 2013/14

MY 2014/15a/

MY 2015/16a/

Sub. Total Grains and Grain Substitutes

12,115

12,080

12,100

12,100

- Wheat

2,710

1,633

1,400

1,500

- Corn

6,483

7,762

8,000

7,900

- Other Grains and Grain Substitute b/

2,992

2,685

2,700

2,700

Others c/

6,698

6,758

6,700

6,700

Grand Total

18,883

18,838

18,800

18,800

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 2012/13

MY 2013/14a/

MY 2014/15b/

MY 2015/16b/

Poultry

4,726

5,107

5,200

5,200

Swine

6,100

6,015

6,100

6,300

Cattle

6,572

6,388

6,100

5,900

Others c/

1,483

1,314

1,400

1,400

Total

18,881

18,824

18,800

18,800

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

a/ Preliminary

b/ FAS/Seoul forecast

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

Trade:

With cattle inventories expected to fall while swine numbers are growing, MY 2015/16 total corn imports are projected to increase to 9.8 million MT, up 200,000 tons from the current marketing year estimate, consisting of 7.8 million MT of feed corn to meet the demand for compound feed, and 2 million MT of processing corn to meet relatively stable demand for food processing.

MY 2015/16 U.S. corn imports are forecast to increase to 4 million MT or about 41 percent of total Korean corn imports, up from the estimated 40 percent of total Korean corn import for the current marketing year.

Corn imports for MY 2014/15 are expected to decrease to 9.6 million MT, down 0.8 million tons from the previous year due to higher feed corn imports than actual corn consumption for feed in the previous year, resulting in higher ending stocks than normal. For the first five months in MY 2014/15, corn imports for feed are about 15 percent lower than the same period of the previous marketing year.

In MY 2014/15, U.S. corn exports to Korea are revised down to 3.8 million tons, down one million tons from post's previous forecast due to greater supply of competitively priced Eastern European/Black Sea corn in recent corn contracts in tandem with expected competitively priced South American corn for the latter part of the marketing year. For the first five months of the marketing year, U.S. corn market share was at 23 percent.

As of early March 2015, importers contracted 8.6 million tons of corn for deliveries through September 2015, continuing to make up for some contracts for July 2015 arrival onward. Most feed 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 200-269 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 208-276 per metric ton, CNF. Most recent buying contracts were stabilized in the range of USD 200-204 per ton for feed corn and USD 208-217 for processing corn, CNF.

Korea: Corn Imports

(1,000MT, 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

14/15a/

7,600

2,000

9,600

3,200

600

3,800

40

15/16a/

7,800

2,000

9,800

3,500

500

4,000

41

Source: Korea Customs Service

a/ FAS/Seoul forecast

Korea: MY 2014/15 Monthly Corn Imports by Origin

(1,000 MT, based on Customs Clearance)

Country

U. S.

Argentina

Brazil

Serbia

Others1/

Total

Feed Corn

2014 Oct.

480

161

120

0

85

846

Nov.

181

32

202

0

50

465

Dec.

28

69

425

0

228

750

2015 Jan.

50

30

311

0

352

743

Feb.

18

2

259

0

279

558

2014/15 (Oct-Feb)

757

294

1,317

0

994

3,362

2013/14 (Oct-Feb)

669

112

1,591

0

1,568

3,940

Processing Corn

2014 Oct.

79

0

89

0

13

181

Nov.

84

0

86

0

13

183

Dec.

17

0

2

30

88

137

2015 Jan.

12

0

71

39

46

168

Feb.

1

0

42

45

50

138

2014/15 (Oct-Feb)

193

0

290

114

210

807

2013/14 (Oct-Feb)

76

4

178

177

384

819

Total

2014 Oct.

559

161

209

0

98

1,027

Nov.

265

32

288

0

63

648

Dec.

45

69

427

30

316

887

2015 Jan.

62

30

382

39

398

911

Feb.

19

2

302

45

328

696

2014/15 (Oct-Feb)

950

294

1,608

114

1,203

4,169

2013/14 (Oct-Feb)

745

116

1,771

177

1,950

4,759

Source: Korea Customs Service

1/ Ukraine (792,174 MT), Russia (87,081 MT), Serbia (113,652 MT), Romania (117,204 MT), South Africa (146,627 MT), Hungary (40,637MT) and Australia (16,717 MT)

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

Sub Total

3,940

3,362

819

807

March

488

na

158

na

April

664

na

234

na

May

698

na

166

na

June

540

na

300

na

July

591

na

85

na

August

658

na

112

na

September

740

na

212

na

Total

8,319

na

2,086

na

Source: Korea Customs Service

Korea: MY 2014/15 Corn Contracts 1/

by Estimated Time of Arrival (ETA)

(Unit: 1,000 MT, as of early February 2015)

ETA

U.S.

Europe

SOAM

Others 2/

Total

Price3/

Oct. 2014

0

0

0

639

639

265

Nov.

0

0

0

805

805

255

Dec.

110

55

0

497

662

247

Jan. 2015

0

0

0

586

586

222

Feb.

62

55

0

532

649

215

Mar.

123

0

55

464

642

214

Apr.

115

0

0

766

881

215

May

183

0

0

813

996

211

June

133

0

0

702

835

207

July

65

0

0

635

700

204

Aug.

0

0

0

618

618

206

Sep.

45

0

0

547

592

206

Total

836

110

55

7,604

8,605

Source: Local Grain Traders

1/ reflecting 90-95 percent of actual contracts due to some omitted contracts data

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

3/ USD/MT, CNF on Weighted Average

Tariff

In early January 2015, the Ministry of Strategy and Finance (MOSF) released its adjusted tariffs and tariff rate quotas (TRQ) for CY 2015. The autonomous TRQs cover a variety of agricultural products, including feed corn. The TRQ for feed corn set at 8 million MT with zero percent duty for CY 2015. However, the government excluded processing corn from the list of TRQs in 2015. The out-of-quota duty for both feed and processing corn remained fixed at 328 percent.

Of the annual autonomous TRQs for feed corn, 8 million MT 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 million MT of processing corn at 3 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 2015

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

8,000,000 MT

0

328

1.8

328

Processing Corn

1005.90.9000

3

0

na

328

3

328

Source: Korea Customs Service (KCS)

Corn PS&D

Corn

2013/2014

2014/2015

2015/2016

Market Begin Year

Oct 2013

Oct 2014

Oct 2015

Korea, South

USDA Official

New post

USDA Official

New post

USDA Official

New post

Area Harvested

16

16

16

16

0

16

Beginning Stocks

1,260

1,260

1,855

1,854

0

1,432

Production

80

80

78

78

0

77

MY Imports

10,406

10,405

9,600

9,600

0

9,800

TY Imports

10,406

10,405

9,600

9,600

0

9,800

TY Imp. from U.S.

5,324

4,611

0

3,800

0

4,000

Total Supply

11,746

11,745

11,533

11,532

0

11,309

MY Exports

0

0

0

0

0

0

TY Exports

0

0

0

0

0

0

Feed and Residual

7,762

7,762

8,000

8,000

0

7,900

FSI Consumption

2,129

2,129

2,100

2,100

0

2,100

Total Consumption

9,891

9,891

10,100

10,100

0

10,000

Ending Stocks

1,855

1,854

1,433

1,432

0

1,309

Total Distribution

11,746

11,745

11,533

11,532

0

11,309

1000 HA, 1000 MT, MT/HA

Import Trade Matrix

Country

Korea, Republic of

Commodity

Corn

Time Period

Oct/Sept

Units:

1,000MT

Imports for:

2012

2013

U.S.

456

U.S.

4611

Others

Others

Brazil

3973

Brazil

1980

Argentina

2592

Ukraine

1760

France

374

Russia

804

Hungary

202

Serbia

406

Serbia

220

Argentina

358

Ukraine

114

South Africa

167

South Africa

95

Romania

110

Australia

74

Australia

59

Hungary

50

France

49

Total for Others

7644

5743

Others not Listed

74

52

Grand Total

8174

10406

Korea: Corn Imports

(1,000MT, 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

Korea: Total Corn Utilization

(Oct./Sept., 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

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

(Oct./Sept., 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

Korea: Feed Ingredients Use for MY2011-MY2012

(1,000 MT, October/September)

INGREDIENT

MY2012/2013

MY2013/2014

TOTAL

DOM 1/

%

TOTAL

DOM 1/

%

GRAINS:

CORN

6,483

-

34.3

7,762

-

41.2

SORGHUM

-

-

-

-

-

-

WHEAT

2,710

-

14.4

1,633

-

8.7

BARLEY

31

3

0.2

28

2

0.1

RYE

1

1

-

0

0

-

OATS

2

1

-

3

1

-

GSP/BROKEN GRAIN

88

85

0.5

88

88

0.5

TAPIOCA

383

-

2.0

284

-

1.5

LUPIN SEED

143

13

0.8

131

6

0.7

OTHERS

182

177

1.0

173

167

0.9

SUB TOTAL

10,023

280

53.1

10,102

264

53.6

GRAIN BY-PRODUCTS:

WHEAT BRAN

611

392

3.2

599

393

3.2

RICE BRAN

205

205

1.1

187

187

1.0

BARLEY BRAN

-

-

-

-

-

-

CORN BRAN

1

1

-

2

2

-

GLUTEN FEED

972

428

5.1

848

374

4.5

OTHERS

373

277

2.0

342

266

1.8

SUB TOTAL

2,162

1,303

11.4

1,978

1,222

10.5

ANIMAL PROTEIN:

FISH MEAL

22

16

0.1

18

12

0.1

MEAT & BONE MEAL

20

20

0.1

22

21

0.1

OTHERS

140

137

0.7

146

143

0.8

SUB TOTAL

182

173

1.0

186

176

1.0

VEGETABLE PROTEIN:

SOYBEAN MEAL

1,986

445

10.5

2,079

411

11.0

RAPESEED MEAL

412

7

2.2

530

6

2.8

SESAMESEED MEAL

23

23

0.1

23

23

0.1

PERILLA SEED MEAL

3

3

-

3

3

-

CORN GLUTEN MEAL

83

78

0.4

81

73

0.4

DDGS

457

135

2.4

536

158

2.8

COTTONSEED MEAL

7

1

-

1

0

-

PARM KERNEL MEAL

782

18

4.1

760

8

4.0

COPRA MEAL

602

5

3.2

399

2

2.1

OTHERS

268

191

1.4

262

216

1.4

SUB TOTAL

4,623

906

24.5

4,674

900

24.8

ADDITIVES/MINERALS:

CALCIUM PHOSPHATE

69

53

0.4

67

54

0.4

LIMESTONE

471

471

2.5

480

480

2.5

SALT

69

68

0.4

67

67

0.4

OTHER

282

281

1.5

291

289

1.5

SUB TOTAL

891

873

4.7

905

890

4.8

OTHER INGREDIENTS:

TALLOW

320

305

1.7

316

312

1.7

MOLASSES

476

390

2.5

461

383

2.4

UREA

1

1

-

2

2

-

OTHER

205

181

1.1

214

192

1.1

SUB TOTAL

1,002

877

5.3

993

889

5.3

GRAND TOTAL

18,883

4,412

100.0

18,838

4,341

100.0

Source: Korea Feed Association (KFA)

1/ Domestic Products