Highlights

Soy is the most important component of the oilseed complex in Korea. Soybean consumption in Korea in MY 2017/18 is forecast to remain relatively unchanged from the current marketing year, at 1.39 million MT (MMT). Production and imports of soybeans are also anticipated to remain steady, corresponding with unchanging consumer demand. Soybean meal production is also forecast to remain steady around 0.8MMT, similar to the quantity achieved in MY 2016/17. Production numbers have remained constant due in a large part to the fact that the two crushing operations in Korea have continued to crush soybeans rather than other oilseeds, due to continued competitive prices for soybeans. Soybean meal consumption is also expected to remain steady in both MY 2016/17 and MY 2017/18. While Korea has been affected by animal diseases in MY2016/17, including Foot-and-Mouth Disease (FMD) and Highly Pathogenic Avian Influenza (HPAI), feed consumption is expected to be minimally impacted: swine production increased, offsetting losses in the poultry sector.

Commodities:

Oilseed, Soybean

Production:

Soybeans accounted for approximately 58 percent of Korea’s total oilseed production in MY 2015/16, followed by perilla (29 percent), sesame (seven percent) and peanut. Korea also produces a small amount of rapeseed. However, the Korean government has not released rapeseed production numbers since CY 2010.

The Korean Rural Economic Institute (KREI) conducted a nationwide survey on December 19-23, 2016 asking the planting intentions of soybean farmers.MY 2017/18 soybean area is forecast to increase to 66,822 hectares, up 1,843 hectares (2.8 percent) from KREI estimates of harvested area in the previous year. This increase is due to domestic rice area reduction programs that encourage rice farmers to cultivate soybeans in their paddy land. Using the KREI survey results as a benchmark, Post is forecasting that soybean production for MY 2017/18 will increase by 54 percent from KOSTAT official data in the previous year, or nine percent from KREI’s previous year estimate, on a five-year average yield. Yields are expected to rebound from last year’s low yield, which had been caused by drought.

In MY 2016/17, KOSTAT announced that soybean production decreased to 75,448 metric tons (MT), down 28,056 MT (27 percent) from the previous year. This decrease was due mainly to declining soybean acreage coupled with lower yields, caused by droughts in the growing period in tandem with heavy rains for the harvest season.

In CY2017, government purchases of the 2016 soybean crop were approximately 2,058 MT reaching only about eight percent of the purchasing target of 25,000 MT. The government had difficultly competing for soybean purchases as farmers opted to sell their beans through the commercial markets rather than through the government purchase program. Bullish prices in the commercial soybean wholesale market (caused by smaller production numbers) have strongly contributed to this trend.

Soybeans account for the majority of oilseed consumption. Total domestic consumption in MY 2017/18 is forecast to stay around 1.39 million MT (MMT), remaining unchanged from the current marketing year’s estimate, amid stagnant domestic production and flat consumer demand. Of this total, 1.0 MMT will be used for crush, 350,000 MT will be used for domestic food use in products like tofu, soymilk and soy sauce, and the remaining 40,000 MT will be consumed as domestic feed and waste. All domestic production goes to food use. Future growth in overall soybean consumption is expected to be minimal. Consumption for crushing will be constant at the level of 1.0 MMT if CJ Corporation, a leading Korean soybean crusher, continues soybean crushing in their flexible crushing facilities, which are converted depending on the comparison of crushing margins between rapeseed and soybeans. In MY 2016/17, soybean consumption is expected to stay around 1.39 MMT, due to lower consumption of soybeans as food caused by declining domestic soybean production and higher prices. This total consists of 1.04 MMT for crushing, 300,000 MT for food and 35,000 MT for feed and waste.

In MY 2015/16, because of a greater crushing margin, Korean crushers increased soybean crushing to 1,040,580 MT, up two percent from the previous year. The bearish trend in international soybean prices led to the increase of locally processed soybean for soybean meal for feed. Total soybean consumption decreased to 1.38 MMT, down 56,000 MT or four percent from the previous year due to lower production of domestic soybeans and steady consumer demand.

Trade

Soybeans accounted for more than 82 percent of total oilseed imports, of which approximately 80 percent were used for crushing in the latest marketing year. Due to constant demand for imported soybeans, MY 2017/18 soybean imports are forecast to remain unchanged from the current marketing year estimate of 1.3 MMT. MY 2016/17 soybean imports are expected to increase four percent from the previous year due to an anticipated greater demand for crushing purposes as bearish import prices have been supportive of the crushing margin.

In MY 2015/16, total soybean imports were 1.37 MMT on customs cleared basis, consisting of 1.0 MMT used for crushing and 374,000 MT used for food processing. In CY 2015, Korea Customs Service (KCS) investigated importers of food grade soybeans who were suspected of price manipulation. This resulted in some soybeans that had been imported prior to October 2015 being entered into the import records in December 2015, on the basis of customs clearance. FAS/Seoul adjusted the imports of food-grade soybeans to 248,664 MT from 373,508 MT on the customs clearance basis in order to balance actual supply and demand, reflecting the adjusted numbers of imports into PS&D.

Crushing

Imports of crushing soybeans in MY 2017/18 are forecast to remain unchanged from the current marketing year’s estimate of 1.0 MMT based on crushers’ continued preference for processing soybeans rather than rapeseed.

Imports during the first three months of MY 2016/2017 (Oct-Dec) reached slightly less than 280,000 MT, with an additional 495,000 MT contracted for delivery during Jan - Jun 2017. Though soybean imports for crushing during the first quarter of MY 2016/17 were up 18 percent when compared to the same period of MY 2015/16, crushers are expected to import a level similar to the previous year to meet increased demand for locally processed soybean meal for animal feed.

The CY 2017 autonomous crushing soybean quota (a voluntary quantity above the World Trade Organization (WTO) quota) is 1.5 MMT with an adjustable in-quota tariff, which was cut from three percent to zero.Under the KORUS FTA, the duty on U.S. soybeans for crushing fell to zero immediately as of March 15, 2012. In MY 2015/16, the majority of crushing beans came from Brazil (57%), followed by the United States (29%) and Paraguay (14%).

Food Use

The Korea Agro-Fishery and Food Trade Corporation (aT), the government’s state trading arm, controls the bulk of marketing of non-GMO food-grade soybeans for food processing under its autonomous WTO Tariff Rate Quota (TRQ). aT distributes soybeans to end-users and charges a mark-up for margins that support domestic crop production in addition to some costs of handling and cleaning, which involves removing any foreign material and broken soybeans upon arrival.

Under its CY 2018 anticipated WTO TRQ-based procurement plan, aT purchased 170,000 MT of soybeans on basis trading contracts at the end of CY 2016, with delivery planned during the first half of CY 2018. Accordingly, in MY 2017/18 imports of food-grade soybeans are forecast to be 300,000 MT, under autonomous WTO TRQ and FTA TRQs, with the majority coming from the United States followed by China, Canada, Brazil and Australia. The United States is expected to retain 70 percent – 80 percent of the import market for food-use soybeans. The gains under the KORUS FTA have further strengthened the U.S. position. U.S. food-grade soybeans are primarily used in products like tofu, soybean paste/sauce and soymilk, while China mainly supplies soybeans for sprouting.

Despite the fact that the government hasn’t announced its CY 2017 autonomous WTO TRQ yet, the volume of WTO TRQ is estimated in the range between 230,000 and 250,000 MT. aT expects the government to release the TRQ in early March 2017, anticipating 83 percent for food processing, 12 percent for sprouting and five percent for import license for end-users who can contract with soybean suppliers directly. In late CY 2015, purchased 170,000 MT on basis trading contracts from the United States for delivery during the first half of CY 2017. The remainder will likely be purchased off the spot market sometime in CY 2017, with delivery during the second half the year. Korea is expected to import a total of about 47,968 MT under FTA TRQs from the United States (27,318 MT), China (10,000 MT), Australia (650 MT) and Canada (10,000 MT), that is, those countries who have FTA TRQ agreements with Korea. Therefore, total imports of food-grade soybeans will be around 300,000 MT in CY 2017.

In CY 2016, Korea imported 283,962 MT of food-grade soybeans, consisting of 247,207 MT of yellow soybeans and 36,775 MT of soybeans for sprouting, under a combination of the autonomous WTO TRQ and FTA TRQs. Under the autonomous WTO TRQ, the state trading company imported 236,975 MT and end-users with import licenses imported 12,540 MT, respectively. Under FTA TRQs, Korea imported 43,875 MT, consisting of 26,510 MT from the United States, 588 MT from Australia, 4,774 MT from Canada and 9,300 MT from China, respectively. In CY 2016, aT distributed about 167,269 MT of imported food-quality soybeans (excluding soy by-products and sprouts) at an average price of 1,020 Korean Won/KG (or 880 USD/MT, using the applicable exchange rate of 1,158 Korean Won per USD on average in 2016). This price was raised to 1,100 Korean Won/KG (or 949 USD/MT) as of October 17, 2016, after Korean soybean farmers groups and NGOs complained that the government selling price of imported soybeans was much cheaper than the price of domestically grown soybeans. During this period, the average price of imported soybeans for food processing was 570 USD/MT (CIF). Based on these figures, made an estimated margin of 54 million USD by selling imported food-grade soybeans to end-users.

Tariffs

The government is expected to announce the 2017 autonomous WTO TRQ in early March 2017, which will be composed of 83 percent for food processing, 12 percent for sprouting and 5 percent for import licenses for end-users. The portion for import licenses will effectively allow end-users or importers to bypass aT and buy from direct sources. The applicable in-quota tariff rate is 5 percent, while the out-of-quota tariff rate is a prohibitive 487 percent, or 956 Korean won (or 0.83 USD) per kg, whichever is greater. Under the KORUS-FTA, Korea has established a zero-duty TRQ for 10,000 MT of food-grade identity-preserved (IP) soybeans in the first year of the agreement in CY 2012, increasing to 20,000 MT in year two and 25,000 MT in year three. For years four and beyond, the TRQ grows three percent annually in perpetuity.

As 2017 represents year six of the agreement, the quota for this year is 27,319 MT. The TRQ is administered by association of food-grade soybean processors, which gives U.S. suppliers direct market access to these processing companies. The TRQ fill rate under the KORUS FTA has reached almost 100 percent in CY 2016, an improvement from 35 percent in CY 2012. In CY 2016, Korean soybean processors successfully imported 26,510 MT, nearly 100 percent of the 26,523 MT of the KORUS FTA TRQ by securing IP food-grade soybeans through farming contracts in advance.

When the Korea-Canada FTA went into effect on January 1, 2015, Korea established a duty-free quota for 5,000 MT of food-grade identity-preserved soybeans in the first year, increasing by 2,500 MT annually up to 15,000 MT in 2019 (the first five years), and then continuing to increase by 400 MT annually up to 17,000 MT in 2024 (the 10th year). For years eleven and beyond, the in-quota quantity will be fixed at 17,000 MT annually. In CY 2017, Korea is expected to import 10,000 MT of Canadian IP soybeans under the FTA TRQ. In CY 2016, Korean soybean processors imported 7,477 MT from Canada, 99.7 percent of the 7,500 MT FTA TRQ.

Korea set up a duty-free quota for 500 MT of Australian food-grade IP soybeans in 2014 for the first year when the Korea-Australia FTA took effect on December 12, 2014. An annual increment of 50 MT becomes 550 MT in 2015 (the second year), reaching 1,000 MT in 2024 (the eleventh year). The in-quota quantity shall remain fixed at 1,000 MT for years 12 and beyond. In CY 2017, Korea is expected to import 650 MT of Australian IP soybeans under the FTA TRQ. In CY 2016, Korean soybean processors imported 588 MT from Australia, 98 percent of the 600 MT FTA TRQ.

Korea established a duty-free quota for 10,000 MT of Chinese food-grade IP soybeans under the Korea-China FTA, effective on December 20, 2015. This quota consists of 7,000 MT for IP soybeans for food processing and 3,000 MT for soybeans for sprouting, in perpetuity. In CY 2016, Korea imported 9,300 MT soybeans from China, 93 percent of the 10,000 MT FTA TRQ.

Oilseed, Soybean 2015/2016

Oilseed, Soybean

2015/2016

Oct 2015

2016/2017

Oct 2016

2017/2018

Market Begin Year

Area Planted

70

57

70

49

0

67

Area Harvested

57

57

68

49

0

67

Beginning Stocks

66

66

94

38

0

28

Production

104

104

120

75

0

120

MY Imports

1374

1249

1375

1300

0

1300

MY Imp. from U.S.

630

491

650

600

0

600

MY Imp. from EU

0

0

Total Supply

1544

1419

1589

1413

0

1448

MY Exports

0

0

0

0

0

0

MY Exp. to EU

0

0

0

0

0

0

Crush

1000

1041

1000

1050

0

1000

Food Use Dom. Cons.

400

300

410

300

0

350

Feed Waste Dom. Cons.

50

40

50

35

0

40

Total Dom. Cons.

1450

1381

1460

1385

0

1390

Ending Stocks

94

38

129

28

0

58

Total Distribution

1544

1419

1589

1413

0

1448

Korea: Oilseed Imports

2015/2016

2016/2017

2016|2018

Volume

Value

Volume

Value

Volume

Value

Soybean

1,270,962

824,725

1,245,730

629,456

1,249,325

563,445

Peanuts

551

788

437

676

757

1,266

Copra

798

947

1,289

1,567

203

239

Linseed

1,319

1,388

1,7

1,404

8,531

7,533

Rapeseed

37

123

2,626

465

2,071

1,263

Sunflower

3,566

6,465

3,695

6,515

3,547

5,608

Seed

157,388

60,227

173,236

64,121

153,219

48,092

Cotton Seed

24

29

2

2

5

4

Castor Bean

78,68

199,608

81,457

162,634

74,406

109,487

Sesame Seed

1,572

1,493

1,772

1,85

2,594

2,09

Mustard Seed

486

358

200

203

393

235

Safflower

25,027

46,785

26,726

52,388

25,294

39,091

Seed

3,198

4,302

3,781

5,837

6,72

34,009

Perilla Seed

1,543,608

1,147,238

1,542,651a

927,118a

1,527,065

812,362a

Commodities:

Meal, Soybean

Meal, Rapeseed

Production:

Almost all of the vegetable meal produced in Korea is made from imported soybeans. Soybean meal production in MY 2015/16 increased to 824,200 MT (79.2 percent applicable extraction rate basis), up 2.3 percent from the previous year, to meet a greater demand for feed.

There are only two soybean crushers in Korea, CJ Corporation and Sajo O&F Co Ltd, with a crushing ratio of 65:35 percent. In MY 2016/17, CJ Corp’s crushing capacity remained unchanged at 2,100 MT per day. Sajo O&F’s crushing capacity also remained unchanged from the previous year, at 1,100 MT per day.

MY 2017/18 demand for crushing soybeans will remain flat at 1.0 MMT as long as crushing margins remain steady. Soybean demand for crushing is steady, equivalent to the country’s 1.0 MMT crushing capacity. Soybean meal production for MY 2017/18 is forecast to hold steady at 792,000 MT, with an extraction rate of 79.2 percent and crude protein content on a 44 percent basis. MY 2016/17 soybean meal production is estimated at 831,000 MT, a slightly higher level compared to the previous year based on better soybean crushing margins under bearish soybean prices.

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 a 47-percent protein content by blending U.S. and Brazilian soybeans. In CY 2016, production of de-hulled Hi-pro soybean meal with 47-percent protein remained stable at 23 percent of total soybean meal production to meet a constant demand for hi-pro soybean meal from feed millers who maintain formulas with high protein levels.

The breakdown of production by company and product follows. In CY 2016, CJ produced 47-percent protein de-hulled meal and 45-percent protein meal in a ratio of 34:66, slightly decreasing the production of 47-percent protein meal from the previous 36:64 ratio. However, Sajo produced 46-percent and 45-percent protein meal at a ratio of 62:38, increasing the production of 46-percent protein meal, in view of the previous 47:53 ratio. This change was made because some feed millers preferred using more 46-percent protein meal to produce compound feed for poultry and swine in recognition of the feed value of hi-pro meals. The USSEC/Seoul office continues to enlighten Korean feed millers about the meaningful value of hi-pro meals.

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 2015/16, soybean meal consumption reached 2.75 MMT, the second most widely used ingredient in compound feed production after corn, accounting for about 13 percent of the total compound feed production, up one percentage point, as rapeseed meal and palm kernel meal declined. (Landed-cost prices of soybean meal declined vis-à-vis other meals during the period.

MY 2016/17 soybean meal consumption is predicted to stay at 2.75 MMT, as swine and beef cattle sectors continue to maintain high animal inventories for the marketing year. Animal operations have kept increasing animal numbers in swine, which partly offset the losses in the poultry sector, which was affected by the severe outbreak of Highly Pathogenic Avian Influenza (HPAI). However, ongoing outbreaks of Foot-and-Mouth Disease (FMD) in dairy farms may potentially adjust the level of compound feed production later in the year. MY 2017/18 soybean meal consumption is forecast to stay around 2.7 MMT, a similar level to the current marketing year, as local swine and beef cattle inventories are expected to maintain constant levels as MY 2016/17.

Rapeseed meal consumption for feed in MY 2017/18 is forecast to stay around 280,000 MT. MY 2016/17 consumption is expected to increase 15 percent to 230,000 MT from the previous year, as animal inventories are affected by ongoing current bullish trend of beef and pork prices. In MY 2015/16, feed millers consumed 200,000 MT, down by more than half of the previous year’s consumption, due to substitution of lower-priced soybean meal and DDGS.

Trade

Soybean meal imports during MY 2017/18 are forecast at 2.0 MMT, unchanged from the current marketing year as Korean livestock inventories remain stagnant. Despite a decrease of 13 percent in soybean meal imports for the first three months over the same period of MY 2015/16, MY 2016/17 soybean meal imports are expected to stay around 2.0 MMT, a slight decrease over the same period in the previous marketing year. In MY 2015/16, soybean meal imports were recorded at 2.1 MMT, up 21 percent from the previous year due to a greater decline in price than other protein materials such as rapeseed meal and copra meal.

Rapeseed meal imports during MY 2017/18 are forecast at 300,000 MT, up 20 percent from the current marketing year to meet normal demand for feed production. In MY 2016/17, rapeseed meal imports are expected to increase slightly due to constant demand from the feed sector. Korean feed millers imported 223,484 MT of rapeseed meal in MY 2015/16, down 55 percent from the previous marketing year due to a lack of supply availability from India, along with international soybean meal market continuing on a bearish trend since CY 2015. India has been the major supplier of rapeseed meal to Korea, followed by China and Canada, and it will remain the top supplier for the foreseeable future.

Palm kernel meal and copra meal imports are forecast to remain major protein resources for animal feed in both MY 2016 and MY 2017. DDGS imports are also forecast to be strong to meet a greater demand for vegetable protein from feed sectors in Korea; and U.S. supplies may be strong if Chinese antidumping measures against U.S. DDGS continue in CY 2017. As of January 10, 2017, China’s Ministry of Commerce (MOFCOM) issued a final determination in the anti-dumping and countervailing investigations against U.S. DDGS. MOFCOM has assigned producers of U.S. DDGS antidumping rates ranging from 42.2- 53.7 percent and countervailing duties (CVD) ranging from 11.2-12 percent, which will be likely to slow trade of DDGS to that market.

The CY 2017 autonomous soybean meal WTO TRQ is set at 2.451 MMT with a zero percent in-quota import duty, unchanged from the previous year. The CY 2017 WTO TRQ for DDGS is set at unlimited volume, with a zero percent in-quota import duty for countries under FTAs. In order to help the livestock industry, the Korean government has maintained an autonomous zero-duty TRQ for other vegetable protein meals such as cottonseed meal and cottonseed hulls. TRQ volumes for copra meal and palm kernel meal were eliminated due to implementing zero duty 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 2016/17 are forecast to remain unchanged from the current marketing year’s estimate of 100,000 MT. The major markets for Korean soybean meal are Japan, followed by Vietnam and Malaysia, where there are overseas feed mills established by Korean crushers.

PS&D

Meal, Soybean

2015/2016

2016/2017

2017/2018

Market Begin Year

Oct 2015

Oct 2016

Oct 2017

Korea, Republic of

USDA Official

New Post

USDA Official

New Post

USDA Official

New Post

Crush

1000

1041

1000

1050

0

1000

Extr. Rate, 999.9999

0.79

0.7915

0.79

0.7914

0

0.792

Beginning Stocks

189

189

254

271

0

232

Production

790

824

790

831

0

792

MY Imports

2118

2104

1950

2000

0

2000

MY Imp. from U.S.

200

8

200

50

0

50

MY Imp. from EU

0

0

0

0

0

0

Total Supply

3097

3117

2994

3102

0

3024

MY Exports

76

76

100

100

0

100

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.

2742

2750

2700

2750

0

2700

Total Dom. Cons.

2767

2770

2725

2770

0

2720

Ending Stocks

254

271

169

232

0

204

Total Distribution

3097

3117

2994

3102

0

3024

Meal, Rapeseed

2015/2016

2016/2017

2017/2018

Market Begin Year

Oct 2015

Oct 2016

Oct 2017

Korea, Republic of

USDA Official

New Post

USDA Official

New Post

USDA Official

New Post

Crush

3

3

2

3

0

3

Extr. Rate, 999.9999

0.6667

0.6667

0.5

0.6667

0

0.6667

Beginning Stocks

30

30

25

36

0

38

Production

2

2

1

2

0

2

MY Imports

220

224

280

250

0

300

MY Imp. from U.S.

0

0

0

0

0

0

MY Imp. from EU

0

0

0

0

0

0

Total Supply

252

256

306

288

0

340

MY Exports

0

0

0

0

0

0

MY Exp. to EU

0

0

0

0

0

0

Industrial Dom. Cons.

46

20

50

20

0

20

Food Use Dom. Cons.

0

0

0

0

0

0

Feed Waste Dom. Cons.

181

200

235

230

0

280

Total Dom. Cons.

227

220

285

250

0

300

Ending Stocks

25

36

21

38

0

40

Total Distribution

252

256

306

288

0

340

Commodities:

Oil, Soybean

Oil, Palm

Production:

CJ Corporation, a leading Korean soybean crusher, returned to soybean crushing from canola seed crushing in the second half of 2013. Due to the greater margins from soybean processing, MY 2015/16 soybean oil production reached 199,500 MT, up two percent over the previous marketing year. Current MY 2016/17 soybean oil production is expected to remain stable at 200,000 MT, a level similar to the previous marketing year, unless crushing margins between soybeans and rapeseed are overturned. MY 2017/18 soybean oil production is forecast to decrease from the current marketing year due to a saturated domestic market.

Consumption:

Soybean oil and palm oil accounted for 74 percent of the country’s total oil supply in MY 2015/16. The majority of soybean oil is consumed in the Hotel and Restaurant Industries (HRI) sector and at home, but recently dwindled away in the biodiesel sector. Food processors and restaurants rely heavily on imported soybean oil, while locally processed soybean oil is generally for homez 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 2017/18 is forecast at 450,000 MT, unchanged from the current marketing year’s estimate because of tapering demand for bio-diesel production, as it is less cost effective than palm oil. Meanwhile, palm oil consumption during this period is forecast at 500,000 MT, up two percent from the current marketing year because of increasing demand from the bio-diesel sector while palm oil consumption in the HRI sector remains stable.

Trade

The biodiesel sector has been the main driver behind rising edible oil imports since MY 2007/08. However, MY 2017/18 soybean oil imports are forecast at 250,000 MT, unchanged from the current marketing year’s estimate, due to lowered demand for biodiesel caused by comparatively cheaper palm oil. In MY 2016/17, soybean oil imports are stagnant at 250,000 MT, remaining unchanged 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 2017/18, palm oil imports are forecast to increase to 500,000 MT, mainly due to rising demand from the biodiesel industry due to government policies. The Korean government has implemented revised regulations to raise the mandatory inclusion rate from two percent to 2.5 percent since the second half of 2016. Palm oil imports for biodiesel are expected to reach 280,000 MT, up four percent from the current marketing year estimate, as it is 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 2016/17, palm oil imports are expected to increase to 490,000 MT to meet increased demand for palm oil used in biodiesel.

Palm oil has been imported duty free under the 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. Therefore U.S. refined soybean oil has been imported duty free since CY 2016. Korea also eliminated the import duty on palm oil immediately under the KORUS FTA.

Production, Supply and Demand Data Statistics

Oil, Soybean2015/20162016/20172017/2018
Market Begin YearOct 2015Oct 2016Oct 2017
Korea, Republic ofUSDA OfficialNew PostUSDA OfficialNew PostUSDA OfficialNew Post
Crush100010411000105001000
Extr. Rate, 999.9999
0.1780.19210.1790.190500.19
Beginning Stocks
49492555050
Production1782001792000190
MY Imports2502502802500250
MY Imp. from U.S.
0
59050050
MY Imp. from EU000000
Total Supply
477
4994845050490
MY Exports
4
44505
MY Exp. to EU
0
00000
Industrial Dom. Cons.40204020020
Food Use Dom. Cons.4084204254300430
Feed Waste Dom. Cons.
0
00000
Total Dom. Cons.4484404654500450
Ending Stocks25551550035
Total Distribution4774994845050490

Oil, Palm

2015/2016

2016/2017

2017/2018

Market Begin Year

Oct 2015

Oct 2016

Oct 2017

Korea, Republic of

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

44

44

54

44

0

44

Production

0

0

0

0

0

0

MY Imports

480

480

470

490

0

500

MY Imp. from U.S.

0

0

0

0

0

0

MY Imp. from EU

0

0

0

0

0

0

Total Supply

524

524

524

534

0

544

MY Exports

0

0

0

0

0

0

MY Exp. to EU

0

0

0

0

0

0

Industrial Dom. Cons.

235

260

235

270

0

280

Food Use Dom. Cons.

235

220

235

220

0

220

Feed Waste Dom. Cons.

0

0

0

0

0

0

Total Dom. Cons.

470

480

470

490

0

500

Ending Stocks

54

44

54

44

0

44

Total Distribution

524

524

524

534

0

544