PRODUCTION

No change from the previous report.

CONSUMPTION

Korea's rice consumption pattern remains unchanged from the previous forecast.

Korea: Rice Utilization Pattern

(1,000 MT, milled)

Rice Year (Nov. - Oct.)

MY 2011/12 a/

MY 2012/13 b/

MY 2013/14 c/

MY 2014/15 d/

Table Rice

3,554

3,435

3,354

3,270

Processing

566

526

550

550

(for food)

(418)

(470)

(480)

(490)

(for liquor)

(148)

(56)

(70)

(60)

Seed

36

36

36

36

Other and Loss

724

492

494

500

Total Demand

4,880

4,489

4,434

4,356

Per Capita Table Rice Consumption (Kg)

69.8

67.2

65.8

64.4

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

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

Korea: Processing Rice Consumption Pattern

(1,000 MT, milled)

Purpose

MY 2009/10

MY 2010/11

MY 2011/12 a/

MY 2012/13 b/

KRFA

180

234

248

246

KALIA

207

244

148

56

Others c/

167

166

170

224

Total

554

644

566

526

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 is expected to engage in bilateral discussions with the concerned countries for settlement of the issue.

As agreed in the special treatment, Korea will continue 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), guaranteed access to the domestic market, etc.

In MY 2014/15, rice imports remain unchanged from the previous forecast at 560,000 metric tons as the Korean government will try to deliver the 2015 Tariff Rate Quota (TRQ) within the corresponding calendar year. U.S. rice exports are expected to stay around 150,000 metric tons, including 34,000 metric tons contracted under the 2014 MMA and possible volume to be contracted under the 2015 TRQ purchasing plan released by the Korean government.

In MY 2013/14, Korea's rice imports were at 313,419 MT, consisting of 122,574 MT imported under the 2013 MMA quota and 190,845 MT imported under 2014 MMA quota, respectively. In CY 2014, U.S. exports to Korea amounted to 37,662 MT, which is composed of 11,700 MT imported under 2013 MMA quota and 25,962 MT imported under 2014 MMA quota, respectively.

2015 TRQ Purchasing plan:

Under the 2015 Tariff Rate Quota (TRQ) purchasing plan, Korea will purchase 408,700 MT of rice (milled basis) as rice tariffication took effect on January 1, 2015.

Purchasing Schedule: January – October 2015 (in principle, purchase bidding will be held two times per month, but is adjustable as needed).

Delivery shall be completed by December 31st 2015.

Bidding method: Public open tender (Details of bidding requirements such as quantities, varieties and grades will be released by individual bidding invitation)

2014 MMA Tendering Results:

Korea purchased a total of 408,700 metric tons (MT) of rice (milled basis) from the United States, China, Thailand, Australia, Vietnam and India. The U.S. share was 15 percent, half of the previous year due to less competitive pricing caused by drought in California, with contracts totaling 60,067 MT (milled) worth US$ 62 million. U.S. contracts of 17,299 MT were brown rice (equivalent to 15,569 MT on milled basis) for food processing purpose, while the remaining 44,507 MT was milled rice for table purpose.

Korea: Rice Contracts by Country under 2014 MMA

(Unit: MT, Milled Basis, as of December 15, 2014)

Country

Global Quota

CSQ

Total (%)

Processing

Table

Processing

Table

USA

10,000

0

5,569

44,507

60,076(14.7)

China

68,656

21,090

67,851

48,308

205,905(50.4)

Thailand

32,500

0

26,653

3,310a/

62,463(15.3)

Australia

21,226

0

3,635

5,395

30,256(7.4)

Vietnam

41000

0

0

0

41,000(10.0)

India

9000

0

0

0

9,000(2.2)

S.Total

182,382

21,090

103,708

101,520

408,700(100)

G. Total

203,472

205,228

408,700(100)

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

a/ include 90 MT of aroma rice (Hom Mali variety)

Korea: U.S. Rice Sales to Korea under 2014 MMA

Contracts

Quota

Milled rice(MT)

for Table

Brown rice(MT)

for Processing

Arrival unit price

Amount

ETA

USDA #1

USDA #3

(USD/MT)

(USD)

2014

1

CSQ

6,188

878.95

5,438,943

July

2

GQ

11,111

902.78

10,030,789

BY 12/15/2014

3

CSQ

4,451a/

1,009.80

4,494,620

BY 12/31/2014

4

CSQ

10,000

1,078.00

10,780,000

BY 12/31/2014

5

CSQ

10,000

1,046.64

10,466,400

By 1/31/2015

6

CSQ

10,000

1,048.68

10,486,800

By 2/28/2015

7

CSQ

10,056

1,047.74

10,536,073

By 2/28/2015

Total

44,507

17,299b/

62,233,624

Source: Korea Agro-Fisheries and Food Trade Corporation (aT), totaling 60,076 MT in milled basis or 29.5 percent of total 2013 MMA.

a/ USDA #3

b/ equivalent to 15,569 MT, milled basis (90 percent of brown rice)

Korea: U.S. Table Rice Delivery Schedule Based on Contracts under 2014 MMA

(Non-Glutinous Milled Rice Medium Grain, Metric Ton)

Supplier

Contractual Quantity

Grade

Shipment

ETA Busan Port

ACC

4,451

U.S. No. 3

4,451

BY 12/31/2014

ADM

10,000

U.S. No. 1

10,000

BY 12/31/2014

FRC

10,000

10,000

By 1/31/2015

10,000

10,000

By 2/28/2015

10,056

10,056

By 2/28/2015

Total

44,507

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

Auctions for Imported Table Rice:

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 increased consumer confidence in U.S. medium grain milled rice, aT started selling U.S. medium grain rice of both USDA No. 1 and USDA No. 3 grades under the 2013 MMA around July 2014, completely selling out of USDA No. 3 U.S. Medium grain milled rice of 6,229 metric tons on October 13, 2014 and USDA No. 1 U.S. Medium grain milled rice of 61,188 metric tons on December 24, 2014, respectively. aT should have begun selling U.S. milled rice under the 2014 MMA in January 2015 as an initial cargo of 4,451 metric tons of USDA No. 3 grade arrived in Korea at the end of 2014. However, a continued delay is almost inevitable as ongoing strikes at west coast ports have prevented timely arrivals of shipments.

Progress in auctioning rice of other origins has been comparably slow. Sell auctions for Chinese milled rice are still pending at 86 percent for USDA No. 1 grade and 96 percent for USDA No. 3 under the 2013 MMA with Thai milled rice ongoing at 41 percent for USDA No. 1 under the 2013 MMA, respectively.

Korea: Status of Rice Auction for Table Rice under 2013 CSQ

(Unit: metric tons, milled basis, as of January 16, 2014)

Commodity

USDA

Grade

Total Table Rice CSQ

Auctioned Off

Balance

Auctioned Off

(%)

U.S. Medium Grain

#1

61,188

61,188

0

100 (as pf Dec. 24 2014)

#3

6,229

6,229

0

100 (as of Oct. 13, 2014)

Chinese Short Grain

#1

24,057

21,111

2,946

86

#3

21,435

20,556

879

96

Thai Long Grain

#1

3,146

1,290

1,856

41

Total

116,505

110,374

5,681

95

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

Korea: Status of Rice Auction for Table Rice under 2012 CSQ

(Unit: metric tons, milled basis, as of September 24, 2014)

Commodity

USDA Grade

Total Table Rice CSQ

Auctioned Off

Balance

Percentage Auctioned Off (%)

U.S. Medium Grain

#1

36,050

36,050

0

100 (as of May 3, 2013)

#3

4,006

3,997

9

100 (as of Jan. 9, 2013)

Chinese Short Grain

#1

37,492

37,492

0

100 (as of Sep. 25, 2013)

#3

24,995

24,897

98

100 (as of Nov. 18, 2013)

Thai Long Grain

#1

3,000

3,000

0

100 (as of Sep. 24, 2014)

Australian Medium Grain

#1

2,429

2,429

0

100 (as of Dec. 6, 2013)

#3

2,429

2,429

0

100 ( as of Dec. 6, 2013)

Total

110,401

108,215

98

100

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

Korea: Auctioned-Off Prices of Imported Table Rice

(Unit: Korean Won per Kg on Average)

Auctioning-off Period

U.S. Medium Grain

Chinese Short Grain (Medium Grain)

Thai Long Grain

Australian Medium Grain

#1

#3

#1

#3

#1

#1

#3

April-September 2006

(2005 MMA)

1,138

991

1,274

1,133

555

none

none

March-August 2007

(2006 MMA)

1,363

1,211

1,357

1,303

953

none

none

February-August 2008

(2007 MMA)

1,542

1,510

1,487

1,558

1,132

none

none

February2009 -May 2010

(2008 MMA)

1,160

994

1,125

(1,100)

none

1,329

none

none

February 2010-March 2011

(2009 MMA)

970

881

914

(850)

893

672

none

none

April 2011-January 2012

(2010 MMA)

913

1,074a/

707

612

518

none

none

December 2011- October 8, 2013 (2011MMA)

1,258

1,452

1,297

1,501

(802c/) 944

none

none

August 2012-September 24,

2014 (2012 MMA)

1,677

1,634

1,378

1,374

903

1,299

1,128

July 2013- January 16, 2015

(2013 MMA)

1,594

1,573

1,320b/

1,325b/

903b/

none

none

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

a/ Auctioned-off during October-December 2011

b/ ongoing

c/ #3

Production, Supply and Demand Data Statistics:

Rice PS&D

Rice, Milled

2012/2013

2013/2014

2014/2015

Market Begin Year

Nov 2012

Nov 2013

Nov 2014

Korea, South

USDA Official

New post

USDA Official

New post

USDA Official

New post

Area Harvested

849

849

833

833

816

816

Beginning Stocks

755

755

780

780

858

887

Milled Production

4,006

4,006

4,230

4,230

4,240

4,241

Rough Production

5,405

5,405

5,632

5,632

5,637

5,638

Milling Rate (.9999)

7,412

7,412

7,511

7,511

7,522

7,522

MY Imports

510

510

310

313

410

560

TY Imports

580

580

330

379

450

470

TY Imp. from U.S.

161

191

0

38

0

150

Total Supply

5,271

5,271

5,320

5,323

5,508

5,688

MY Exports

2

2

2

2

2

2

TY Exports

2

2

2

2

2

2

Consumption and Residual

4,489

4,489

4,460

4,434

4,450

4,356

Ending Stocks

780

780

858

887

1,056

1,330

Total Distribution

5,271

5,271

5,320

5,323

5,508

5,688

1000 HA, 1000 MT, MT/HA

Korea: Import Trade Matrix of Rice

Country

Korea, Republic of

Commodity

Rice, Milled

Time Period

Jan/Dec

Units:

1,000MT

Imports for:

2013

2014

U.S.

191

U.S.

38

Others

Others

China

307

China

193

Thailand

33

Thailand

71

Australia

27

Australia

25

Myanmar

3

Vietnam

43

Vietnam

1

India

9

India

7

Indonesia

11

Total for Others

389

341

Others not Listed

0

0

Grand Total

580

379