Production:

Almost all of the vegetable meal produced in Korea is made from imported soybeans. As CJ Corporation has decided to return to soybean crushing from rapeseed crushing since the second half of 2013, soybean meal production in MY 2013/14 increased to 711,087 MT (79.2% applicable extraction rate basis), up 11% from the previous year.

There are only two soybean crushers in Korea, namely CJ Corporation and Sajo O&F Co Ltd with a crushing ratio of 66:34 percent. CJ Corp. built up its capacity to 2,100 MT per day, up 11 percent from the previous year while Sajo O&F also increased 18 percent to 1,100 MT per day from the previous year, respectively.

MY 2015/16 demand for crushing soybeans will remain flat at 900,000 MT as crushing margins remain steady. Soybean demand for crushing is steady, but still below the country's 1.0 million MT crushing capacity. Soybean meal production for MY 2015/16 is forecast to hold steady at 713,000 MT with an extraction rate of 79.2 percent and crude protein content of 44 percent, remaining unchanged from the current marketing year.

MY 2014/15 soybean meal production is expected to stay around at 713,000 MT, a similar level compared to the previous year due to continuing better soybean crushing margin than rapeseed.

In an effort to strengthen their competitiveness against imported meal from South America, these companies have started producing de-hulled Hi-pro soybean meal with 47.0 percent protein content by blending U.S. and Brazilian soybeans. In CY 2014, production of de-hulled Hi-pro soybean meal with 47 percent protein was up, accounting for 43 percent of total soy meal production, from the previous 38 percent. Local crushers continue to expand de-hulled hi-pro production.

The breakdown of production by company and product follows. In CY 2014, CJ produced 47 percent protein dehulled meal and 45% protein meal in a ratio of 67:33, increasing the production of 47 percent protein meal from the previous 62:38 ratio. However, Sajo produced 46 percent and 45 percent protein meal at a ratio of 27:73, decreasing the production of 46 percent protein meal in view of the previous 30:70 ratio.

Korea: Soybean Crushing Capacity

(As of February 2015)

Soybean Crusher

Capacity (mt/day)

Location

CJ Corp

2,100 a/

Incheon

Sajo O&F

1,100

Incheon

Total

3,200

Source: Soybean Crushing Industry

Note: Day=24 hours processing basis for 330 days

a/ of them, 700 MT have been converted to crush for either rapeseed or soybeans depending on crushing margin since December 2012.

Consumption:

Nearly all imported and domestically produced soybean meal is used in compound feed production. Korean feed millers prefer soybean meal since it is more readily available than other oil meals. In MY 2013/14, after corn, soybean meal was the second most widely used ingredient in compound feed production, accounting for about 11 percent of the total compound feed production, up 0.5 percent point to make up for the decrease of feed wheat use as a protein resource. In MY 2013/14, feed wheat use sharply declined to 8.7 percent of total compound feed production from the previous year's 14.4 percent.

MY2014/15 soybean meal consumption is predicted to stay at 2.2 million MT as the livestock sector continues to maintain high animal inventories for the marketing year because pork and beef prices rebounded from the bottom by adjusting excessive inventory numbers in MY 2012/13. However, ongoing outbreaks of HPAI and FMD may adjust the level of compound feed production later.

MY 2015/16 soybean meal consumption is forecast to remain at 2.2 million MT, unchanged from the current marketing year as local animal inventories are expected to maintain similar levels as MY 2014/15.

Rapeseed meal consumption for feed in MY 2015/16 is forecast to stay around 500,000 MT. MY2014/15 consumption is expected to decline five percent to 500,000 MT from the previous year as animal inventories are affected by current ongoing epidemic diseases coupled with beef cattle numbers declining until CY2017. In MY 2013/14, feed millers consumed 530,000 MT, up 29 percent from the previous year, due to a greater demand of vegetable protein for compound feed production.

Trade:

Import

Soybean meal imports during MY 2015/16 are forecast to remain at 1.7 million MT, up 3 percent from the current marketing year as the Korean livestock industries are expected to maintain stagnant levels of animal inventories. The first three months of this year's soybean meal imports decreased 7 percent over the same period of MY 2013/14, while the total MY 2014/15 soybean meal import estimate is expected to be around 1.65million MT, about 9 percent down over the previous marketing year. In MY 2013/14, greater imports of soybean meal over actual consumption left ending stock levels higher than normal.

Rapeseed meal imports during MY 2015/16 are forecast at 520,000 MT, up 4 percent from the current marketing year due to continued strong consumption for feed production. In MY 2014/15, rapeseed meal imports are expected to decrease slightly due to higher beginning stock caused by greater import of rapeseed meal in MY 2013/14. Korean feed millers imported 555.306 MT of rapeseed meal in MY 2013/14, up 32 percent over the previous marketing year because of bearish trend in import price coupled with CJ quitting rapeseed processing in the second half of 2013. India supplies nearly 100 percent of rapeseed meal to Korea, expecting to remain the top supplier for the foreseeable future. Palm kernel meal and copra meal imports are each forecast between 600,000-800,000 MT in both MY 2014 and MY 2015, respectively. DDGS imports are also forecast to be strong to meet a greater demand for vegetable protein from feed sectors if feed wheat supply is limited.

The CY 2015 autonomous soybean meal TRQ was initially set at 2 million MT with a zero percent in-quota import duty, unchanged from the previous year. The CY2015 TRQ for DDGS is set at 400,000MT, down 20 percent from last year due to a zero percent in-quota import duty. In order to help the livestock industry, which has suffered inflated prices of imported raw materials, the Korean government has maintained the autonomous zero duty TRQs for other vegetable protein meals such as cottonseed meal and cottonseed hulls. TRQ volumes for copra meal and palm were eliminated due to zero duty implementation under the Korean-ASEAN FTA.

Under the Korean-ASEAN FTA, copra and palm kernel meals are imported duty free from South East Asian countries such as Indonesia, Malaysia and the Philippines. Indian soybean meal is imported duty free under the Korea-India Comprehensive Economic Partnership Agreement (CEPA). As part of the KORUS FTA, Korea eliminated import duties on vegetable protein meals such as soybean meal (2304.00.0000), DDGS (2303.30.0000), and cottonseed meal (2306.10.0000) since March 15, 2012.

Export

Korea exports some locally crushed soybean meal that is less competitive than imported meal. Soybean meal exports for MY 2014/15 are forecast to remain unchanged from the current marketing year's estimate of 180,000 MT. The major markets for Korean soybean meal are Japan, Indonesia, Malaysia, Vietnam and Cambodia.

Korea: Soybean Meal Exports

(Metric Ton)

Country

MY 11/12

MY 12/13

MY 13/14

Japan

11,954

93,906

159,836

Malaysia

6,172

160

340

Indonesia

12,172

11,442

13,200

Vietnam

7,842

1,759

3,040

Cambodia

168

816

2,160

Philippine

0

6,620

180

Others

180

300

565

Total

38,488

114,704

179,321

Source: Korea Customs Service

Soybean Meal PS&D

Meal, 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

1

1

1

1

0

1

Beginning Stocks

43

43

100

164

0

127

Production

795

711

755

713

0

713

MY Imports

1,826

1,809

1,880

1,650

0

1,700

MY Imp. from U.S.

190

189

200

50

0

200

MY Imp. from EU

0

0

0

0

0

0

Total Supply

2,664

2,563

2,735

2,527

0

2,540

MY Exports

179

179

150

180

0

180

MY Exp. to EU

0

0

0

0

0

0

Industrial Dom. Cons.

0

0

0

0

0

0

Food Use Dom. Cons.

25

20

25

20

0

20

Feed Waste Dom. Cons.

2,360

2,200

2,425

2,200

0

2,200

Total Dom. Cons.

2,385

2,220

2,450

2,220

0

2,220

Ending Stocks

100

164

135

127

0

140

Total Distribution

2,664

2,563

2,735

2,527

0

2,540

1000 MT, PERCENT

Soybean Meal Import Trade Matrix

Import Trade Matrix

Country

Korea, Republic of

Commodity

Meal, Soybean

Time Period

OCT/SEP

Units:

1,000MT

Imports for:

2012

2013

U.S.

157

U.S.

189

Others

Others

Brazil

805

Brazil

928

India

204

India

184

Argentina

243

Argentina

114

China

222

China

390

Total for Others

1474

1616

Others not Listed

2

4

Grand Total

1633

1809

Source: Korea Customs Service (KCS)

Rapeseed Meal PS&D

Meal, Rapeseed

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

0

0

51

0

0

0

Extr. Rate, 999.9999

0

0

1

0

0

0

Beginning Stocks

50

50

45

55

0

35

Production

0

0

29

0

0

0

MY Imports

555

555

525

500

0

520

MY Imp. from U.S.

0

0

0

0

0

0

MY Imp. from EU

0

0

0

0

0

0

Total Supply

605

605

599

555

0

555

MY Exports

0

0

0

0

0

0

MY Exp. to EU

0

0

0

0

0

0

Industrial Dom. Cons.

50

20

50

20

0

20

Food Use Dom. Cons.

0

0

0

0

0

0

Feed Waste Dom. Cons.

510

530

500

500

0

500

Total Dom. Cons.

560

550

550

520

0

520

Ending Stocks

45

55

49

35

0

35

Total Distribution

605

605

599

555

0

555

1000 MT, PERCENT

Rapeseed Meal Import Trade Matrix

Import Trade Matrix

Country

Korea, Republic of

Commodity

Meal, Rapeseed

Time Period

OCT/SEP

Units:

1,000MT

Imports for:

2012

2013

U.S.

0

U.S.

0

Others

Others

India

397

India

550

Canada

24

China

5

Total for Others

421

555

Others not Listed

0

0

Grand Total

421

555

Source: Korea Customs Service (KCS)

Korea: Soybean Meal Production1/

(Metric Ton)

Month

MY 12/13

MY 13/14

MY 14/15

October

43,447

55,082

55,781

November

52,621

44,474

52,160

December

51,339

50,662

54,178

January

48,482

63,030

Na

February

45,706

52,366

Na

March

62,810

64,791

Na

April

58,172

54,505

Na

May

54,293

50,146

Na

June

47,585

59,672

Na

July

38,082

53,069

Na

August

51,360

59,180

Na

September

47,227

53,580

Na

Total

601,125

660,557

Na

Extraction Rate

74.43%

73.59%

Na

Source: Korea Soybean Processing Association

1/ based on crushers' applicable extraction rate

Korea: Feed Ingredients Use for Animal

(October/September Basis)

Items

MY 2012/2013

MY 2013/2014

1,000 MT

Percent

1,000 MT

Percent

Total Grains and Grain Substitution

12,185

64.5

12,080

64.1

- Wheat

2,710

14.4

1,633

8.7

- Corn

6,483

34.3

7,762

41.2

- Others

2,992

15.8

2,685

14.3

Total Vegetable Protein

4,623

24.5

4,674

24.8

- Soybean Meal 1/

1,986

10.5

2,079

11.0

- Rapeseed Meal

412

2.2

530

2.8

- Cottonseed Meal

7

0.0

1

0.0

- Palm Kernel Meal

782

4.1

760

4.0

-Copra Meal

602

3.2

399

2.1

-Sesame Meal

23

0.1

23

0.1

-Perilla seed Meal

3

0.0

3

0.0

-Corn Gluten Meal

83

0.4

81

0.4

DDGS

457

2.4

536

2.8

- Others

268

1.4

262

1.4

Total Animal Protein

182

1.0

186

1.0

- Fish meal

22

0.1

18

0.1

-Meat & Bone Meal

20

0.1

22

0.1

-Others

140

0.7

146

0.8

Total Others

1,893

10.0

1,898

10.1

TOTAL COMPOUND FEED

18,883

100.0

18,838

100.0

Source: Korea Feed Association

1/ include dehullled soybean meal

Korea: Imports of Major Protein Meals

(October/September)

MY 2012/2013

MY 2013/014

Volume(MT)

Value(1,000$)

Volume(MT)

Value(1,000$)

Soybean Meal

1,633,348

886,912

1,809,231

993,679

Rapeseed Meal

421,044

142,305

555,307

153,524

Fish Meal

36,711

65,223

49,440

81,780

Bone Meal

208

326

255

333

Cottonseed Meal

22,841

9,705

18,296

8,765

Sunflower Seed Meal

802

334

1,177

500

Copra Meal

604,925

135,666

410,146

107,136

Palm Kernel Meal

817,996

148,975

839,145

159,060

Corn Germ Meal

29,304

8,864

20,170

6,189

Others

355,664

47,848

516,931

65,856

Total

3,922,843

1,446,161

4,220,098

1,576,822

DDGS

467,309

162,913

610,372

195,429

Source: Korean Customs Service (KCS)

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

(Unit: MT)

MY 2014/15

USA

Brazil

Argentina

India

China

Others

Total

Oct. 2014

0

158,424

0

2,056

10,389

0

170,870

Nov

0

95,408

0

1,598

1,164

0

98,166

Dec

414

130,886

0

3,565

4,516

0

139,381

Subtotal

414

384,718

0

7,219

16,069

0

408,417

MY 2013/14 a/

259

317,910

55,039

49,568

11,447

3,838

438,060

Source: Korea Customs Service (KCS)

a/ October – December 2013

Korea: Soybean Meal Contracts under MY 2013/14 Arrival by Origin

(Unit: 1,000 MT, as of January 2015)

Estimated Time of Arrival

USA

SOAM

India

Optional 1/

Total

Oct. 2014

0

64

0

0

64

Nov

0

163

0

0

163

Dec

0

54

0

60

114

Jan. 2015

0

0

0

55

55

Feb

0

55

0

0

55

Mar

0

158

0

55

213

Apr

0

53

0

0

53

May

0

95

0

55

150

Jun

0

110

0

0

110

Jul

0

115

0

110

225

Total

0

867

0

335

1,202

Source: Local Traders

1/ optional origin among USA, SOAM or China

Korea: Compound Feed Production

(October/September, 1,000 mt)

Animal Type

MY 2012/13

MY 2013/14

MY 2014/15a/

Poultry

4,726

5,107

5,000

Swine

6,100

6,015

6,000

Cattle

6,572

6,388

6,100

Others b/

1,483

1,314

1,400

Sub. Total

18,881

18,824

18,500

Aquaculture

96

107

100

Milk Substitute

43

39

50

Grand Total

19,020

18,970

18,650

Source: Korea Feed Association (KFA), Ministry for Agriculture, Food, and Rural Affairs (MAFRA)

a/ FAS/ Seoul forecast

b/ include ducks, pet food, rabbit, horse, sheep, deer, quail etc.

Korea: Applied Tariff Schedule for Oil Cake and Meals

(Percent)

Commodity

H.S. Code

2013

2014

2015

DDGS a/

2303.30.0000

3 (0)

3 (0)

3 (0)

Soybean Meal b/

2304.00.0000

1.8 (0)

1.8 (0)

1.8 (0)

Peanut Meal

2305.00.0000

5

5

5

Cottonseed Meal c/

2306.10.0000

2 (0)

2 (0)

2 (0)

Linseed Meal

2306.20.0000

5

5

5

Sunflower Seed Meal

2306.30.0000

5

5

5

Rapeseed Meal

2306.40.0000

0

0

0

Copra Meal

2306.50.0000

2 (0)

2 (0)

2

Palm Kernel Meal

2306.60.0000

2 (0)

2 (0)

2

Cottonseed Hull for feed d/

2308.00.3000

5 (0)

5 (0)

5 (0)

Source: Korea Customs Service

The figures in parentheses are the autonomous quota tariff rates for CY 2015.

a/ The applied duty is assessed on the first 400,000 tons of residues of brewing or distilling dregs and waste.

b/ The applied duty is assessed on the first 2 million tons of soybean meal.

c/ The applied duty is assessed on the first 70,000 tons of cottonseed meal for feed and 15,000 tons for mushroom growing.

d/ The applied duty is assessed on the first 100,000 tons of cottonseed hull for feed and 15,000 tons for mushroom growing.