Production:

As CJ Corporation, a leading Korean soybean crusher, returned to soybean crushing from canola seed crushing in the second half of 2013 due to narrow canola processing margin, MY 2013/14 soybean oil production reached 173,100 MT, up 10 percent over the previous marketing year. MY 2014/15 soybean oil production is expected to remain unchanged from the previous marketing year unless crushing margins between soybeans and rapeseed are overturned in its flexible crushing facilities. MY2015/16 soybean oil production is forecast to follow the current marketing year.

Consumption:

Soybean oil and palm oil account for 73 percent of the country's total oils supply in MY 2013/14. The majority of soybean oil is consumed in the HRI sector and home, and more recently in the biodiesel sector. Food processors and restaurants rely heavily on imported soybean oil while locally processed soybean oil is generally for home use. Palm oil is primarily used for food processing, especially ramen (instant noodle) production, since it is more functional and cheaper than soybean oil. Palm oil has been increasingly used in local biodiesel production.

Soybean oil consumption in MY 2015/16 is forecast at 460,000 MT, slightly increasing from the current marketing year's estimate because of stagnant demand for bio-diesel production as it is less cost effective than palm oil. Meanwhile, palm oil consumption during this period is forecast at 450,000 MT, up 5 percent from the current marketing year because of rising demand from the bio-diesel sector.

Trade:

The biodiesel sector has been the main driver behind rising edible oil imports since MY 2007/08. MY 2015/16 soybean oil imports are forecast at 300,000 MT, remaining unchanged from the current marketing year's estimate due to anticipation of a limited demand for biodiesel caused by less price competitiveness compared to palm oil. In MY 2014/15, soybean oil imports are stagnant at 300,000 MT, slightly increasing from the previous year. Soybean oil imported from South America, particularly Argentina, is much more price competitive than domestically produced soybean oil made from imported soybeans.

In MY 2015/16, palm oil imports are forecast to increase 3 percent to 450,000 MT mainly due to rising demand from the biodiesel industry as Korean government plans to implement revised regulations to raise mandatory rate to 2.5 percent from current 2 percent in the second half of 2016. Palm oil imports for biodiesel are expected to reach 230,000 MT, up 15 percent from the current marketing year estimate as it's more competitively priced than other oil-based feed stocks. Palm oil imports for use in the local soap industry are expected to remain steady at 20,000 MT. In MY 2014/15, palm oil imports are expected to increase to 420,000 MT to meet greater demand for biodiesel purpose than the previous year.

Palm oil has been imported duty free under Korea-ASEAN FTA since June 2007.

Under the KORUS FTA effective since March 15, 2012, Korea's 5.4 percent duty on imports of crude soybean oil is scheduled to be phased out in 10 equal annual reductions, while the 5.4 percent on refined soybean oil will be phased out in five equal annual reductions. Korea also eliminated the import duty on palm oil immediately under the KORUS FTA.

Soybean Oil PS&D

Oil, Soybean

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

Crush

1,000

898

950

900

0

900

Extr. Rate, 999.9999

0

Beginning Stocks

27

27

17

32

0

35

Production

178

173

152

173

0

173

MY Imports

278

278

350

300

0

300

MY Imp. from U.S.

0

0

35

50

0

50

MY Imp. from EU

0

0

0

0

0

0

Total Supply

483

478

519

505

0

508

MY Exports

6

6

15

20

0

20

MY Exp. to EU

0

0

0

0

0

0

Industrial Dom. Cons.

90

40

95

40

0

40

Food Use Dom. Cons.

370

400

385

410

0

420

Feed Waste Dom. Cons.

0

0

0

0

0

0

Total Dom. Cons.

460

440

480

450

0

460

Ending Stocks

17

32

24

35

0

28

Total Distribution

483

478

519

505

0

508

1000 MT, PERCENT

Soybean Oil Import Trade Matrix

Import Trade Matrix

Country

Korea, Republic of

Commodity

Oil, Soybean

Time Period

OCT/SEP

Units:

1,000MT

Imports for:

2012

2013

U.S.

47

U.S.

0

Others

Others

Argentina

202

Argentina

200

Brazil

0

Brazil

6

Vietnam

32

Vietnam

63

Thailand

13

Thailand

7

Total for Others

247

276

Others not Listed

6

2

Grand Total

300

278

Source: Korea Customs Service (KCS)

Palm Oil PS&D

Oil, Palm

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 Planted

0

0

0

0

0

0

Area Harvested

0

0

0

0

0

0

Trees

0

0

0

0

0

0

Beginning Stocks

36

36

44

44

0

44

Production

0

0

0

0

0

0

MY Imports

403

403

400

420

0

450

MY Imp. from U.S.

0

0

0

0

0

0

MY Imp. from EU

0

0

0

0

0

0

Total Supply

439

439

444

464

0

494

MY Exports

0

0

0

0

0

0

MY Exp. to EU

0

0

0

0

0

0

Industrial Dom. Cons.

170

200

180

220

0

250

Food Use Dom. Cons.

225

195

220

200

0

200

Feed Waste Dom. Cons.

0

0

0

0

0

0

Total Dom. Cons.

395

395

400

420

0

450

Ending Stocks

44

44

44

44

0

44

Total Distribution

439

439

444

464

0

494

1000 HA, 1000 TREES, 1000 MT

Palm Oil Import Trade Matrix

Import Trade Matrix

Country

Korea, Republic of

Commodity

Oil, Palm

Time Period

OCT/SEP

Units:

1,000MT

Imports for:

2012

2013

U.S.

0

U.S.

0

Others

Others

Malaysia

317

Malaysia

255

Indonesia

29

Indonesia

144

Total for Others

346

399

Others not Listed

1

4

Grand Total

347

403

Source: Korea Customs Service (KCS)

Korea: Domestic Production of Vegetable Oils1/

(Metric Ton)

Commodities

MY 2011/12

MY 2012/13

MY 2013/14

Soybean Oil

150,100

150,000

173,100

Corn Oil

45,609

41,132

45,558

Sesame Oil

19,626

21,404

22,988

Rice Bran Oil

10,000

10,000

10,000

Rapeseed Oil

513

26,937

436

Perilla Seed Oil

23,723

22,490

23,349

Total

249,571

271,963

275,431

Source: Foreign Agriculture Service, Seoul, Korea

1/ FAS/Seoul estimates

Korea: Soybean Oil Production

(Metric Ton)

Month

MY 12/13

MY 13/14

MY 14/15

October

12,000

14,300

15,000

November

12,600

11,500

14,000

December

14,000

13,300

14,500

January

13,200

16,000

Na

February

12,000

13,000

Na

March

15,300

17,000

Na

April

15,200

15,000

Na

May

14,500

13,500

Na

June

12,700

15,500

Na

July

10,300

13,800

Na

August

13,600

15,900

Na

September

11,900

14,300

Na

Total

157,300

173,100

Na

Extraction Rate

19.48%

19.28%

Na

Source: Korea Soybean Processing Association (KSPA)

Korea: Total Supply of Edible Oils

(Metric Ton)

Commodity

MY 2011/12

MY 2012/13

MY 2013/14

Soybean Oil

492,969

450,463

451,194

Palm Oil

308,093

346,614

402,553

Corn Oil

46,757

42,119

47,928

Rapeseed Oil

103,432

103,272

88,350

Coconut Oil

60,452

62,387

58,217

Olive Oil

10,557

9,728

14,536

Cottonseed Oil

8,830

3,037

506

Sesame Oil

20,361

21,864

23,465

Rice Bran Oil

24,796

21,282

23,912

Perilla Seed Oil

24,476

23,437

24,248

Fish Oil

14,610

9,923

10,085

Sunflower Oil

22,991

18,699

20,880

Total

1,138,324

1,112,825

1,165,874

Source: Foreign Agriculture Service, Seoul, Korea

Korea: Fats and Oils Imports

(MT & US$1,000, Oct/Sep)

Commodity

MY 2012/13

MY 2013/14

Volume

Value

Volume

Value

Palm Oil

346,614

292,333

402,553

340,786

Tallow

24,013

23,241

10,483

10,140

Lard

486

471

0

0

Coconut Oil

61,801

58,814

57,858

73,628

Cottonseed Oil

3,037

2,739

506

677

Fish Oil

8,923

20,436

9,085

19,420

Soy Oil

300,463

353,753

278,144

272,191

Corn Oil

987

1,072

2,370

2,341

Rapeseed Oil

76,355

99,762

87,914

90,445

Palm Kernel Oil

7,195

7,310

8,910

12,005

Rice Bran Oil

11,282

18,241

13,912

20,687

Castor Oil

6,659

10,595

7,318

11,356

Linseed Oil

6,048

9,710

6,354

8,814

Sunflower Oil

18,699

31,675

20,880

31,186

Safflower Oil

20

81

33

137

Olive Oil

9,728

39,799

14,536

56,799

Jojoba Oil

47

1,348

46

1,079

Peanut Oil

13

111

19

120

Sesame Oil

460

2,172

477

2,653

Perilla Oil

947

2,582

899

3,700

Camellia Oil

18

294

26

393

Babassu Oil

4

51

9

119

Other Oil

13,924

25,137

10,010

47,075

Total

897,723

1,001,727

932,342

1,005,751

Source: Korea Customs Service (KCS)

Korea: Soybean Oil Imports for Oct.-Dec. by Origin

(Unit: MT)

MY 2014/15

USA

Argentina

Brazil

Vietnam

Others

Total

Oct. 2014

78

18,654

0

6,981

242

25,955

Nov

19

11,901

783

2,827

105

15,635

Dec

13,121

10,294

0

1,499

147

25,061

Subtotal

13,218

40,849

783

11,307

494

66,651

MY2013/14 a/

17

78,536

0

0

657

79,210

Source: Korea Customs Service (KCS)

a/ October – December 2013

Korea: Applied Tariff Schedule For Fats And Oils

(Percent)

Commodity

H.S. Code

General Rate

2014

2015

Lard

1501.00.10xx

3

3

3

Beef Tallow

1502.00.10xx

2

2

2

Other Tallow

1502.00.90xx

3

3

3

Fish Oil

1504.xx.xxxx

3

3

3

Soybean Oil for Food, Crude

1507.10.1000

5

5

5

Soybean Oil For Biodiesel, Crude

1507.10.2000

5

5

5

Soybean Oil for Other, Crude

1507.10.9000

5

5

5

Soybean Oil for Food, Refined

1507.90.1010

5

5

5

Soybean Oil For Biodiesel, Refined

1507.90.1020

5

5

5

Soybean Oil for Other, Refined

1507.90.1090

5

5

5

Soybean Oil, Other

1507.90.9000

5

8

8

Peanut Oil

1508.xx.xxxx

27

27

27

Olive Oil

1509.xx.xxxx

5

5

5

Palm Crude Oil

1511.10.0000

3

3

3

Palm Oil

1511.90.xxxx

2

2

2

Sunflower Oil

1512.1x.xxxx

5

5

5

Safflower Oil

1512.1x.xxxx

5

5

5

Cotton Seed Oil

1512.2x.xxxx

5

5

5

Coconut Oil

1513.1x.xxxx

3

3

3

Palm Kernel Oil

1513.2x.xxxx

8

8

8

Rapeseed Oil, Crude

1514.11.0000

5

5

5

Rapeseed Oil, Refined

1514.19.xxxx

5

5

5

Rapeseed Oil, Other, Crude

1514.91.1000

5

5

5

Linseed Oil

1515.1x.xxxx

5

5

5

Corn Oil

1515.2x.xxxx

5

5

5

Castor Oil

1515.30.xxxx

5

8

8

Tung Oil

1515.90.9040

8

8

8

Sesame Oil 1/

1515.50.0000

40

40

40

Perilla Seed Oil

1515.90.1000

36

36

36

Rice Bran Oil

1515.90.9010

5

5

5

Other, Crude

1515.90.9090

5

5

5

1/ In-Quota tariff rate under the WTO TRQ. Quota is 668 tons. The out-of-quota tariff rate is 630 percent or 12,060 Won/Kg, whichever is greater