Grain and Feed Annual 2012

An Expert's View about Agriculture and Animal Husbandry in South Korea

Posted on: 27 Apr 2012

MY 2012/13 wheat imports are projected at 4.6 million tons, down roughly 15 percent from the current marketing year.

THIS REPORT CONTAINS ASSESSMENTS OF COMMODITY AND TRADE ISSUES MADE BY USDA STAFF AND NOT NECESSARILY STATEMENTS OF OFFICIAL U.S. GOVERNMENT POLICY Required Report - public distribution Date: 4/17/2012 GAIN Report Number: KS1230 Korea - Republic of Grain and Feed Annual 2012 Annual Approved By: M. Kathryn Ting Prepared By: Sunchul Choi//Gerald H. Smith Report Highlights: MY 2012/13 wheat imports are projected at 4.6 million tons, down roughly 15 percent from the current marketing year, of which 2.4 million tons are for milling (including wheat and pasta on a wheat equivalent basis) and 2.2 million tons for feed. 2012/13 corn consumption is forecast to stay around 8.1 million MT, up 0.4 million metric tons for the current marketing year estimate due to an anticipated increase in demand for feed corn as Korea?s swine industry continues to recover to pre- FMD levels. As of March 15, under the KORUS FTA, U.S. wheat and feed corn imports are entering at zero duty. Conversely, the duty-free quota for corn for processing will grow each year with tariffs being completely phased out by 2019. MY 2012/13 rice production is forecast to stay around 4.2 million tons ? down 0.5 percent from 4.224 MMT in 2011/12 - due to lower planting intentions. Commodities: Wheat Production: MY 2012/13 wheat production is forecast to stay around 45,000 tons because of the sluggish demand for domestically grown milling wheat and unsold ending stocks. The government is encouraging wheat production by providing loan assistance to finance purchases of domestic milling wheat. Also, the government is providing assistance to local wheat producers for sufficient drying and storing facilities. However, weak end-user demand has led to increasing stocks. Korea: Wheat Production Harvested Area Yield Production Crop Year (Hectare) (MT/HA) (MT) 2006 1,738 3.34 5,810 2007 1,928 3.81 7,624 2008 2,549 4.06 10,359 2009 5,067 5.15 26,087 2010a/ 12,548 3.12 39,116 2011b/ 13,044 3.40 44,000 Source: Ministry of Food, Agriculture, Forestry & Fisheries (MIFAFF), Statistics Korea (KOSTAT) a/ preliminary b/ FAS/Seoul forecast; yield is based on government project and five year average. Consumption: MY 2012/13 wheat consumption is forecast at 4.9 million tons, a decrease of nearly 200,000 tons from the current marketing year due to the anticipated decrease in the available limited supplies of competitively priced feed wheat. MY 2012/13 milling wheat consumption including flour and pasta imports on a wheat basis is forecast at 2.4 million tons, remaining unchanged from the current marketing year. In MY 2011/12, total wheat consumption is expected to reach 5.1 million tons, an increase of 700,000 tons from the previous forecast due to greater demand for feed grain. Feed millers are substituting corn with competitively price feed grade wheat. Milling wheat consumption is expected to be 2.4 million tons, remaining unchanged from the previous forecast. CY 2011 per capita flour consumption increased to 33.4 kilograms, reaching per capita consumption levels not seen since prior to 2008. Since then, Korea?s wheat flour consumption has been hit by strong global wheat prices. Nearly 44.0 percent of flour consumption is used for local noodle manufacturing, followed by 14.5 percent for baking products and 8.2 percent for confectionary products. The remainder is used by the following - restaurants (8.1 percent), households (6.9 percent), pet food (5.1 percent), Exports (3.8 percent), soy sauce (4.6 percent), brewery (1.1 percent), extruded traditional chewy cakes (0.7 percent), industrial use (0.8 percent) and others (2.2 percent). Some flour is also exported, mostly to Japan. Korea: Post Estimates of Domestic Wheat Use (1,000 MT, July/June) Year 2008/09 2009/10 2010/11 2011/12 a/ Imported Milling Wheat 2,041 2,136 2,312 2,250 Flou b/r Imports 69 127 63 50 Flour Expo b/rts 56 59 64 60 P b/asta Imports 105 119 123 123 Local Wheat 10 26 39 44 FSI Consumption c/ 2,169 2,349 2,473 2,407 Feed Wheat 942 2,172 1,965 2,700 Total Consumption 3,111 4,521 4,438 5,107 Source: Korea Feed Association (KFA), Korea Flour Millers Industry Association (KOFMIA) and Korea Customs Service (KCS) a/ FAS/Seoul forecast based on the first eight months data of the current marketing year. b/ Wheat basis c/ include wheat flour and pasta imports but exclude flour export Korea: Wheat Flour Utilization (1,000 MT) Calendar Year 2006 2007 2008 2009 2010 2011 Total Consumption 1/ 1,772 1,740 1,618 1,615 1,610 1,634 Per Capita (Kg/Ye 2/ar) 33.9 33.7 31.3 31.4 32.9 33.4 Source: Korea Flour Mills Industrial Association (KOFMIA) 1/ based on flour millers? sales including exports, imports and animal feed purposes, but wheat flour production basis excluding animal feed and exports since 2010. 2/ excludes animal feed and exports from total consumption, including imports of wheat flour. Trade: MY 2012/13 wheat imports are projected at 4.6 million tons, of which 2.4 million tons are for milling (including flour and pasta imports on a wheat equivalent basis) and 2.2 million tons for feed. The import estimate hinges to a large extent on the continued availability of feed wheat. International traders expect Korea to import between 2.0 million and 2.5 million tons of feed wheat depending on the 2012 crop situation in Ukraine, Russia and Eastern European countries - the traditional feed wheat exporters to Korea. MY 2011/12 wheat imports are expected to reach 5.4 million tons given that imports for feed wheat were higher than expected during the first eight months of the marketing year. Competitive international prices for feed wheat are driving imports. Korea?s feed wheat market is dominated by three exporters including intermittent exports from Ukraine. Australia is a major supplier of feed wheat, followed by Canada and the United States. Since June 2010, the U.S. feed wheat exports to Korea have been trending higher. Imports of U.S. wheat in MY 2011/12 are expected to reach around 1.5 million tons, which include 200,000 tons of U.S. feed grade wheat. U.S. feed grade wheat is mainly composed of soft wheat or white wheat containing lower than normal protein contents. Tariff In late December 2011, the Ministry of Strategy and Finance (MOSF) released its adjusted tariffs and tariff rate quotas (TRQ) for CY 2012. Please refer to KS 1205 for more details. A TRQ covering milling wheat was set at 1.56 million metric tons at a zero percent duty, down from the base rate of 1.8 percent, for the first half of CY 2012. The out-of-quota duty remained fixed at 1.8 percent. Of note, the feed wheat TRQ and its corresponding duty were eliminated in 2007. On March 15, 2012, the KORUS FTA was implemented. Consequently, the duty on U.S. wheat immediately fell to zero. In CY 2012, the flour import tariff rate that was reduced to zero to curb inflation in 2011 returned to the local base rate at 4.2 percent. Under the KORUS FTA, ta riffs for wheat flour (H.S. 1101.00.1000) will gradually be eliminated over a 5 year phase out period while tariffs for meslin flour (H.S. 1101.00.2000) fell to zero. Korea: Wheat Import Tariff Rates for CY 2012 (Percent) Commodity Applied Tariff Rate Bound Tariff Rate 2011 2012 2011 2012 Durum Wheat, Seed 1001.11.0000 3 3 9.0 9.0 Durum Wheat, Other 1001.19.0000 3 3 9.0 9.0 Seed, Meslins 1001.91.1000 3 3 9.0 9.0 Seed, Other 1001.91.9000 1.8 1.8 1.8 1.8 Feeding, Meslins 1001.99.1010 3 3 9.0 9.0 Feeding, Other 1001.99.1090 0 0 1.8 1.8 Milling, Meslins 1001.99.2010 3 3 9.0 9.0 Milling 1/, Other 1001.99.2090 1.8(0) 1.8(0) 1.8 1.8 Others, Meslins 1001.99.9010 3 3 9.0 9.0 Others, Oth 1/er 1001.99.9090 1.8(0) 1.8(0) 1.8 1.8 Source: Korea Customs Service (KCS) 1/ The number in parenthesis is the in-quota tariff rate assessed on 1.56 million tons of wheat imported for milling purposes for the first half of CY 2012. Flour Trade: MY2011/12 flour imports are expected to decline to 30,000 tons (less than 50,000 tons wheat equivalent) because the SPC Group, Korea?s biggest bakery company started milling its own flour. Consequently, MY 2012/13 flour imports are forecast to level off around 50,000 tons (wheat equivalent) because small-sized restaurants and noodle manufactures continue being loyal users of cheaper priced flour. The statistics of pasta imports have been reflected into PSD table since MY 2010. Since MY 2008, annual flour exports have converged at around 60,000 tons (wheat equivalent), this level is expected to be maintained for the foreseeable future. Korea: Wheat Imports (1,000 MT, Customs Cleared Basis) Marketing Year Feed Wheat Milling Wheat Flour Imports Pasta Import Total (July/June) 1/ 1/ 04/05 1,089 2,385 29 99 3,602 05/06 1,536 2,220 41 101 3,898 06/07 976 2,298 69 108 3,451 07/08 565 2,317 105 117 3,104 08/09 1,151 2,058 69 105 3,383 09/10 2,164 2,071 127 119 4,481 10/11 2,075 2,520 63 123 4,781 11/12 a/ 3,000 2,200 50 123 5,373 Source: Korea Customs Service 1/ Wheat basis a/ FAS Seoul forecast based on the buying contracts to date and the first seven months imports Korea: MY 2011/12 Feed Wheat Contracts by Estimated Time of Arrival (ETA) (Unit: 1,000 MT, as of March, 2012) ETA Quantity Price (US$/MT 1/) Jul. 2011 165 307 Aug. 165 304 Sep. 220 293 Oct. 165 286 Nov 275 270 Dec 220 274 Jan. 2012 165 263 Feb. 220 259 Mar 220 268 Apr. 220 271 May 445 284 Jun. 275 294 Total 2,755 Source: Local Grain Traders 1/ CNF on Weighted Average Korea: Wheat Flour Imports (Metric Ton, July/June) Country MY2005 MY2006 MY2007 MY2008 MY2009 MY2010 U.S.A. 315 594 771 425 873 531 Canada 16,416 28,595 35,662 11,206 34,213 13,540 Australia 1,250 2,510 1,721 1,979 1,252 528 China 8,510 12,037 27,045 815 1,328 583 Turkey 2,488 4,671 1,981 6,685 24,568 11,130 Indonesia 360 942 4,709 4,462 7,647 9,956 Hungary 0 0 0 5,601 8,893 110 Others 424 1,211 5,103 18,951 14,112 9,772 Total 29,763 50,560 76,994 50,124 92,886 46,150 Wheat Basis 39,684 67,413 105,328 68,570 127,068 63,133 Source: Korea Customs Service (KCS) Korea: Pasta Imports (Metric Ton, July/June) Country MY2005 MY2006 MY2007 MY2008 MY2009 MY2010 U.S.A. 266 329 327 449 326 424 China 56,430 60,805 63,188 57,473 64,123 62,024 Italy 11,254 11,503 13,910 11,080 13,525 16,368 Thailand 1,106 1,412 1,988 2,201 2,584 3,142 Indonesia 2,970 2,758 3,292 1,812 2,102 2,530 Turkey 274 266 749 1,630 2,388 2,507 Others 1,372 1,885 1,822 2,038 2,242 2,960 Total 73,672 78,958 85,276 76,683 87,290 89,955 Wheat Basis 100,783 108,015 116,658 104,902 119,413 123,058 Source: Korea Customs Service (KCS) Korea: Wheat Flour Exports (Metric Ton, July/June) Country MY2005 MY2006 MY2007 MY2008 MY2009 MY2010 Total 70,027 61,922 54,740 41,789 44,234 48,056 Wheat Basis 93,369 82,563 72,987 55,719 58,979 64,075 Source: Korea Customs Service (KCS) Production, Supply and Demand Data Statistics: Wheat PS&D Wheat Korea, Republic 2010/2011 2011/2012 2012/2013 of Market Year Begin: Jul Market Year Begin: Jul Market Year Begin: Jul 2010 2011 2012 USDA New USDA New USDA New Official Post Official Post Official Post Area Harvested 13 13 13 13 13 Beginning Stocks 1,118 1,118 1,510 1,434 1,768 Production 39 37 44 44 45 MY Imports 4,761 4,781 5,000 5,450 4,600 TY Imports 4,761 4,781 5,000 5,450 4,600 TY Imp. from U.S. 1,518 1,672 0 1,500 1,450 Total Supply 5,918 5,936 6,554 6,928 6,413 MY Exports 125 64 100 60 60 TY Exports 125 64 100 60 60 Feed and Residual 1,965 1,965 2,500 2,700 2,500 FSI Consumption 2,318 2,473 2,400 2,400 2,400 Total Consumption 4,283 4,438 4,900 5,100 4,900 Ending Stocks 1,510 1,434 1,554 1,768 1,453 Total Distribution 5,918 5,936 6,554 6,928 6,413 1000 HA, 1000 MT, MT/HA WHEAT -- STATISTICAL TABLES Korea: Import Trade Matrix of Wheat Import Trade Matrix Country Korea, Republic of Commodity Wheat Time Period July/June Units: 1,000MT Imports for: 2009 2010 U.S. 1116 U.S. 1673 Others Others Australia 853 Australia 1041 Ukraine 1469 Canada 1154 Canada 569 Ukraine 214 EU 161 Romania 155 Total for Others 2891 2725 Others not Listed 228 197 Grand Total 4235 4595 Note: Matrix does not include wheat flour and pasta imports Korea: Monthly Wheat Imports (1,000 MT) Month Feed Wheat Milling Wheat MY 2010/11 MY 2011/12 MY 2010/11 MY 2011/12 July 163 203 221 158 August 111 219 113 200 September 127 163 225 123 October 241 167 241 226 November 186 261 181 218 December 265 211 86 90 January 91 284 356 231 February 144 226 160 196 Sub Total 1,328 1,732 1,583 1,443 March 152 Na 155 Na April 136 Na 212 Na May 218 Na 286 Na June 240 Na 283 Na Total 2,075 Na 2,519 Na Source: Korea Customs Service Korea: MY 2011/12 Monthly Wheat Imports by Origin (1,000 MT, based on Customs Clearance) Country U. S. Australia Canada Ukraine Other Total Milling Wheat 2011 July 22 104 32 0 0 158 August 105 64 31 0 0 200 September 46 74 2 0 0 122 October 126 86 14 0 0 226 November 116 82 21 0 0 219 December 52 37 2 0 0 91 2012 January 132 89 11 0 0 232 February 86 87 22 0 0 195 Total 685 622 135 0 0 1,443 Feed Wheat 2011 July 0 53 150 0 0 203 August 0 57 160 0 1 218 September 0 81 82 0 0 163 October 0 148 18 0 0 166 November 0 216 45 0 0 261 December 0 201 7 0 4 212 2012 January 116 164 0 0 4 284 February 57 166 0 0 2 225 Total 173 1,086 462 0 11 1,732 Total Wheat 2011 July 22 157 182 0 0 361 August 105 121 191 0 1 418 September 46 155 84 0 0 285 October 126 234 33 0 0 393 November 116 298 65 0 0 479 December 52 237 9 0 4 302 2012 January 248 252 11 0 4 515 February 143 253 22 0 2 420 Total 859 1,708 597 0 11 3,175 Source: Korea Customs Service Korea: Monthly Wheat Use (1,000 MT) Month Feed Wheat Milling Wheat a/ MY 2010/11 MY 2011/12 MY 2010/11 MY 2011/12 July 199 189 183 169 August 141 202 186 186 September 120 203 183 171 October 146 218 195 183 November 165 228 190 185 December 180 252 198 189 January 173 246 222 178 February 134 240 160 162 Sub Total 1,258 1,778 1,517 1,423 March 164 Na 212 Na April 162 Na 197 Na May 186 Na 160 Na June 194 Na 161 Na Total 1,965 Na 2,246 Na Source: KFA and KOFMIA a/ Milling wheat use data includes wheat flour exports, but excludes the portion used in soy-sauce production Korea: Milling Wheat Imports by Variety (Arrival Basis, Calendar Year) CY 2010 CY 2011 Origin Variety (1,000 MT) % (1,000 MT) % United States No. 1 WW/SW 373.3 17.5 466.8 22.2 No. 1 WW/SW 9.5 max. 78.3 3.7 18.2 0.9 No. 1 WW/SW 8.5 max. 37.2 1.7 64.4 3.1 No. 1 White Club 0 0 0 0 No. 1 Hard White 0 0 0 0 No. 1 HRW 11.5 min. 250.3 11.7 255.8 12.2 No. 1 DNS 14.0 min. 319.6 15.0 255.0 12.1 No. 1 DNS 13.5 min. 12.7 0.6 18.3 0.9 No. 2 SRW 5.9 0.3 6.8 0.3 Sub Total 1,077.3 50.5 1,085.3 51.7 Australia ASW a/ 775.6 36.4 714.1 34.0 AH b/ 101.0 4.7 107.2 5.1 ANW c/ 21.0 1.0 0.8 0 APW d/ 8.2 0.4 65.9 3.1 Sub Total 905.8 42.5 888.0 42.3 Canada No. 2 CWRS 13 e/.5 min. 140.1 6.6 123.7 5.9 Russia RMW 7.2 0.3 0 0 Others Organic Wheat 1.0f 0 2.0 0.1 Grand Total 2,131.4 100.0 2,099.0 100 Source: Korea Flour Mills Industrial Association (KOFMIA) a/ Australian Standard White Wheat b/ Australian Hard Wheat c/ Australian Noodle Wheat d/ Australian Premium Wheat Commodities: Corn Production: Corn production is negligible and accounts for less than one percent of total consumption. Planted area for MY 2012/13 is expected to remain steady at around 16,000 hectares, while production is forecast at 78,000 MT based on the preceding five- year average yield. 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 2011a/ 15,828 4.93 78,000 Source: Ministry for Food, Agriculture, Forestry & Fisheries (MIFAFF), Statistics Korea (KOSTAT) a/ FAS/Seoul forecast based on five-year average yield Consumption: MY 2012/13 corn consumption is forecast to stay around 8.1 million MT, up 0.4 million MT from the current marketing year estimate, due to an anticipated increase in demand for feed corn as Korea?s swine industry is expecting inventory to recover to the level prior to 2010/11FMD outbreak . Feed corn consumption is projected to increase to 6.0 million MT, up 0.4 million MT from the estimated current marketing year level in large part due to anticipated increase in compound feed production for the swine 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) from the soft drink industry. MY 2011/12 corn consumption is expected to decline to 7.7 million MT, down 0.6 million MT from the previous year due mainly to increasing consumption of competitively priced feed wheat. The decreased amount of corn is mainly offset by the increase of feed grade wheat. Processing corn is expected to stay around 2 million tons and the FSI corn consumption will be at 2.1 million MT, remaining unchanged from the previous year. Compound feed production is expected to continue increasing to 17.2 million tons in MY 2011/12 and reaching 17.5 million tons in MY 2012/13 following the recovery of swine inventories. Feed corn has been the main ingredient used in compound feed, accounting for 35 to 40 percent of total ingredients. This ratio is projected to remain relatively constant for the foreseeable future based on the preferences of local livestock producers. However, because rising feed wheat use has impacted total corn demand, feed corn use ratio in MY 2011/12 is expected to fall to 33 percent of total compound feed production. Compound Feed Production for Swine Industry In Korea, the swine industry is the most important feed grain user. In MY 2010/11, compound feed production for the swine industry was 4.74 million, down 13.3 percent from the previous marketing year. The decrease was attributed to the substantial inventory losses in early 2011 due to the foot and mouth disease (FMD) outbreak. At the end of CY 2011, the nation?s swine inventory recorded 8,171 thousand head, down 17 percent over the same period of the previous year. In CY 2011, the national average inventory per farm was 1,287 heads, representing an average annual growth of 9.6 percent during the recent five years. About 14 percent of the total swine was raised by farms with 10,000 or more heads in inventory, 14 percent by farms with 5,000 to 9,999 swine, 59 percent by farms with 1,000 ? 4,999 swine, and 13 percent by farms with 999 or less swine. About 20 percent of the nation?s total swine inventory is kept by 21 integrated operations. The integrators play an increasingly important role in the development of the industry and in the improvement of overall productivity by expanding operations and centralizing business management. In 2012, the nation?s swine inventory levels will increase modestly over 2011. However, over the longer-term, it is unlikely that the total hog inventories will reach pre-crisis levels. Corn processors continue using non-biotech IP corn imported from the United States and traditional corn imported from other countries such as Hungary, Serbia, Ukraine, Romania and South Africa. 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 companies using starch have sourced ingredients imported from China since these items are reportedly derived from non- biotech corn. Korea: Total Corn Utilization (Oct./Sept., 1,000 MT) Marketing Feed Processing Food Total Year a/ b/ 2007/08 7,046 1,494 98 8,638 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 c/ 5,600 2,000 100 7,700 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 2008/09 MY 2009/10 MY 2010/11 MY 2011/12a/ Sub. Total Grains and Grain Substitutes 10,274 10,954 10,935 11,050 - Wheat 1,416 2,149 2,100 2,700 - Corn 6,368 6,362 6,073 5,600 - Other Grains and Grain Substitute b/ 2,490 2,443 2,762 2,750 Others c/ 6,060 6,301 6,052 6,100 Grand Total 16,334 17,255 16,987 17,150 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 2008/09 MY 2009/10 MY 2010/11a/ MY 2011/12 b/ Poultry 4,413 4,564 4,744 4,900 Swine 5,307 5,465 4,738 4,750 Cattle 5,550 5,915 6,116 6,100 Others b/ 1,009 1,233 1,367 1,400 Total 16,279 17,177 16,965 17,150 Source: MIFAFF a/ Preliminary b/ FAS/ Seoul forecast c/ include ducks, pet food, rabbit, horse, sheep, deer, quail etc. Trade: MY 2012/13 total corn imports are projected to increase to 8.0 million MT, up 500,000 tons from the current marketing year estimate, consisting of 6 million MT of feed corn to meet a greater demand for swine sector and 2 million MT of processing corn to meet relatively stable demand for food processing . MY 2012/13 U.S. corn imports are forecast to stay around 5.5 million MT or about 70 percent of total Korean corn imports. However, U.S. imports could reach as much as 6.0 million MT depending on the corn supply situation of other major exporters including the availability of traditional corn from Eastern Europe. Corn imports for MY 2011/12 are expected to decrease to 7.5 million MT, down 0.6 million tons from the previous year due to a lower demand for feed corn, spurred by the increased use of feed wheat. MY 2011/12 U.S. corn imports are estimated at staying around 5.5 million tons based on the records of U.S. corn imports for the first five months. At the end of March 2012, importers have contracted for 5.8 million MT of corn delivering from October 2011 to September 2012. Most of the contracted purchases to date are for U.S. corn and/or optional origin at seller?s option among the United States, South America, South Africa or Europe with a price range of $283-363 per metric ton CNF for feed corn. Meanwhile corn processors have contracted for U.S. No. 2 non-GM yellow corn and Eastern European conventional corn with a price range of $284-364 per metric ton CNF for the same period. In MY 2010/11, the United States accounted for 78 percent of total corn imports in Korea, representing 86 percent of total feed corn imports and 55 percent of total food processing corn imports, respectively. 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 % 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 Source: Korea Customs Service Korea: Corn Contracts by Estimated Time of Arrival (ETA) (Unit: 1,000 MT, as of March 2012) ETA U.S. EU SOAM Others 1/ Total Oct. 2011 110 0 0 500 610 Nov. 55 0 0 540 595 Dec. 165 0 0 234 399 Jan. 2012 242 0 0 265 507 Feb. 176 0 0 220 396 Mar. 243 0 55 415 713 April 382 0 171 110 663 May 184 0 0 55 239 June 294 165 119 230 808 July 161 0 0 182 343 Aug. 0 0 65 134 199 Sep. 0 0 60 250 310 Total 2,012 165 470 3,135 5,782 Source: Local Grain Traders 1/ optional origins at seller?s option out of USA, SOAM, Europe or South Africa In late December 2011, the Ministry of Strategy and Finance (MOSF) released its adjusted tariffs and tariff rate quotas (TRQ) for CY 2012. These autonomous TRQs cover a variety of agricultural products, including feed and processing corn. The TRQs for these commodities were expanded with feed corn set at 9 million MT for CY 2012 and processing corn at 1.41 million MT for the first half of CY 2012, respectively, with a zero percent duty. Please refer to KS 1205 for more details. The out-of-quota duty for both feed and processing corn remained fixed at 328 percent. Of the annual TRQ for feed corn, 9 million MT has been allocated to feed millers who are members of the Korean Feed Association (KFA) and Nonghyup Feed Inc. (NOFI). The Korea Corn Processing Industry Association (KOCPIA) is expected to manage the 2 million MT of processing corn TRQ. Starting March 15, 2012, the duty on U.S. feed corn immediately fell to zero under the KORUS FTA. If imports of U.S. corn claim the KORUS preferential duty, these imports should 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 2012 Commodity In-Quota Out-of-Quota Bound Tariff Rate Current Market Access Temporary Quota Rate In- Out-of- Quota Quota Quota Volume % Volume % % % % Feed Corn 1.8 9,020,000 MT 0 328 1.8 328 1005 a/.90.1000 6,102,100 MT Processing 3 1,410,000 MT 0 328 3 328 C o b/rn 1005.90.9000 Source: Korea Customs Service (KCS) a/ include 20,000 MT for mushrooms cultivation for January 1 ? December 31, 2012 b/ for January 1- June 30, 2012 include 10,000 MT of white corn for popping Production, Supply and Demand Data Statistics: Corn PS&D Corn Korea, Republic of 2010/2011 2011/2012 2012/2013 Market Year Begin: Oct 2010 Market Year Begin: Oct 2011 Market Year Begin: Oct 2012 USDA Official New Post USDA Official New Post USDA Official New Post Area Harvested 16 16 16 16 16 Beginning Stocks 1,622 1,622 1,580 1,589 1,467 Production 74 74 78 78 78 MY Imports 8,107 8,107 8,000 7,500 8,000 TY Imports 8,107 8,107 8,000 7,500 8,000 TY Imp. from U.S. 6,065 6,316 0 5,500 5,500 Total Supply 9,803 9,803 9,658 9,167 9,545 MY Exports 0 0 0 0 0 TY Exports 0 0 0 0 0 Feed and Residual 6,074 6,074 6,000 5,600 6,000 FSI Consumption 2,149 2,140 2,100 2,100 2,100 Total Consumption 8,223 8,214 8,100 7,700 8,100 Ending Stocks 1,580 1,589 1,558 1,467 1,445 Total Distribution 9,803 9,803 9,658 9,167 9,545 1000 HA, 1000 MT, MT/HA CORN -- STATISTICAL TABLES Korea: Import Trade Matrix of Corn Import Trade Matrix Country Korea, Republic of Commodity Corn Time Period Oct/Sept Units: 1,000MT Imports for: 2009 2010 U.S. 7504 U.S. 6316 Others Others Hungary 289 South Africa 893 Argentina 243 Serbia 445 Brazil 201 Hungary 205 Serbia 103 Brazil 180 Total for Others 836 1723 Others not Listed 120 68 Grand Total 8460 8107 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 % 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 Source: FAS Seoul Korea: Monthly Corn Import (1,000 MT) Month Feed Corn Processing Corn MY 2010/11 MY 2011/12 MY 2010/11 MY 2011/12 October 589 344 133 164 November 350 497 202 126 December 649 354 74 155 January 577 587 281 214 February 480 503 137 112 Subtotal 2,645 2,285 827 770 March 435 Na 155 Na April 579 Na 161 Na May 458 Na 248 Na June 485 Na 178 Na July 423 Na 119 Na August 652 Na 180 Na September 383 Na 179 Na Total 6,060 Na 2,047 Na Source: Korea Customs Service Korea: MY 2011/12 Monthly Corn Imports by Origin (1,000 MT, based on Customs Clearance) Country U. S. South Africa Brazil Serbia Others1/ Total Feed Corn 2011 Oct. 238 106 0 0 0 344 Nov. 476 21 0 0 0 497 Dec. 353 0 0 0 1 354 2012 Jan. 527 1 7 0 52 587 Feb. 392 0 11 0 100 503 Subtotal 1,987 128 18 0 153 2,285 Processing Corn 2011 Oct. 99 0 14 31 20 164 Nov. 82 0 0 16 28 126 Dec. 65 29 21 24 16 155 2012 Jan. 37 0 0 66 111 214 Feb. 11 0 0 19 82 112 Subtotal 294 29 35 155 257 770 Total 2011 Oct. 337 106 14 30 21 508 Nov. 558 21 0 16 28 623 Dec. 419 29 21 24 16 509 2012 Jan. 564 1 7 66 162 800 Feb. 403 0 11 19 182 615 Grand Total 2,281 157 53 155 409 3,055 Source: Korea Customs Service 1/ mainly non-GM corn originated from Ukraine (119,464 MT), Hungary (89,045 MT), Australia (25,910 MT), Paraguay (42,054 MT), India (54,937 MT), Romania (51,466 MT) and China (22,560 MT) Korea: Total Corn Utilization (Oct./Sept., 1,000 MT) Marketing Feed Processing Food Total Year a/ b/ 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 1,940 92 8,394 2010/11 6,074 2,051 89 8,214 2011/12 c/ 5,600 2,000 100 7,700 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: 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 Source: Korea Corn Processing Industry Association (KOCPIA) Korea: Monthly Corn Use (1,000 MT) Month Feed Corn Processing Corn MY 2010/11 MY 2011/12 MY 2010/11 MY 2011/12 October 573 464 182 171 November 583 461 173 164 December 612 490 173 161 January 550 465 177 156 February 421 448 151 154 Subtotal 2,739 2,329 856 806 March 499 Na 185 Na April 464 Na 169 Na May 503 Na 184 Na June 491 Na 174 Na July 445 Na 167 Na August 476 Na 168 Na September 459 Na 148 Na Total 6,074 Na 2,052 Na Source: Korea Feed Association (KFA), Korea Corn Processing Industry Association (KOCPIA) Korea: Animal Inventory (1,000 Head, 1,000 Birds) Animal Year March June September December Beef Cattle 2008 2,241 2,448 2,470 2,430 2009 2,481 2,599 2,645 2,635 2010 2,706 2,889 2,949 2,915 2011 2,881 3,053 3,044 2,950 2012 2,906e/ 3,043e/ na 2,850d/ Dairy Cattle 2008 451 445 445 446 2009 448 439 438 445 2010 449 432 429 430 2011 396 403 404 404 2012 405-407e/ 407-409e/ na 403d/ Swine a/ 2008 8,981 9,153 9,284 9,087 2009 9,177 9,044 9,381 9,585 2010 9,768 9,728 9,901 9,881 2011 7,036 7,330 7,783 8,171 2012 8,450-8,550e/ 8,900-9,000e/ 9,500-9,600e/ 8,634 d/ Layer b/ 2007 56,525 56,542 55,117 56,093 2008 57,850 59,720 58,200 59,170 2009 60,240 61,140 61,998 62,967 2010 62,524 61,586 60,095 61,700 2011 61,025 60,723 61,212 62,425 2012 63,340e/ 62,940e/ na na Broiler c/ 2007 63,350 87,359 59,946 56,227 2008 67,010 77,850 55,560 54,480 2009 68,690 99,983 68,123 67,194 2010 72,692 101,690 71,271 74,050 2011 69,932 110,122 71,038 76,435 2012 70,970 na na na Source: Korea Rural Economic Institute, MIFAFF a/ includes 864,000 heads of statistical difference between FAS/Seoul and Korean government. b/ Excluding breeders. c/ Excluding multi-use broilers. d/ FAS/Seoul forecast e/ KREI forecast Korea: Feed Ingredients Use for MY2009-MY2010 (1,000 MT) INGREDIENT MY2009/2010 MY2010/2011 TOTAL DOM 1/ % TOTAL DOM 1/ % GRAINS: CORN 6,362 0 36.9 6,073 1 35.8 SORGHUM 0 0 0 0 0 0 WHEAT 2,150 0 12.5 2,100 1 12.4 BARLEY 24 4 0.1 26 3 0.2 RYE 0 0 0 1 1 0 OATS 2 0 0.0 2 0 0.0 GSP/BROKEN GRAIN 47 47 0.3 67 67 0.4 TAPIOCA 289 0 1.7 224 0 1.3 LUPIN SEED 208 38 1.2 121 15 0.7 OTHERS 123 119 0.7 174 167 1.0 SUB TOTAL 9,205 208 53.3 8,788 255 51.7 GRAIN BY-PRODUCTS: WHEAT BRAN 653 390 3.8 662 421 3.9 RICE BRAN 175 175 1.0 237 237 1.4 BARLEY BRAN 1 1 0 0 0 0 CORN BRAN 0 0 0 0 0 0 GLUTEN FEED 639 411 3.7 931 493 5.5 OTHERS 282 217 1.6 317 210 1.9 SUB TOTAL 1,750 1,194 10.1 2,147 1,361 12.6 ANIMAL PROTEIN: FISH MEAL 23 16 0.1 21 17 0.1 MEAT & BONE MEAL 18 18 0.1 18 18 0.1 OTHERS 87 87 0.5 100 97 0.6 SUB TOTAL 128 121 0.7 139 132 0.8 VEGETABLE PROTEIN: SOYBEAN MEAL 2,176 576 12.6 2,059 545 12.1 RAPESEED MEAL 306 0 1.8 285 3 1.7 SESAMESEED MEAL 15 15 0.1 17 17 0.1 PERILLA SEED MEAL 5 5 0.0 4 4 0.0 CORN GLUTEN MEAL 86 79 0.5 86 78 0.5 DDGS 474 136 2.7 535 144 3.1 COTTONSEED MEAL 5 0 0.0 5 0 0.0 PARM KERNEL MEAL 596 0 3.5 636 11 3.7 COPRA MEAL 523 1 3.5 366 18 2.2 OTHERS 228 85 1.3 210 183 1.2 SUB TOTAL 4,414 897 25.6 4,203 1,003 24.7 ADDITIVES/MINERALS: CALCIUM PHOSPHATE 82 65 0.5 72 57 0.4 LIMESTONE 435 435 2.5 452 452 2.7 SALT 64 62 0.4 62 61 0.4 OTHER 224 224 1.3 235 232 1.4 SUB TOTAL 805 786 4.7 821 802 4.8 OTHER INGREDIENTS: TALLOW 365 331 2.1 320 293 1.9 MOLASSES 401 344 2.3 390 330 2.3 UREA 1 1 0.0 0 0 0.0 OTHER 187 176 1.1 179 166 1.1 SUB TOTAL 954 852 5.5 889 789 5.2 GRAND TOTAL 17,256 4,058 100.0 16,987 4,342 100.0 Source: Korea Feed Association (KFA) 1/ Domestic Products Commodities: Rice, Milled Production: MY 2012/13 rice production is forecast to stay around 4.2 million tons ? down 0.5 percent from 4.224 MMT in 2011/12 - due to lower planting intentions. According to a recent Korea Rural Economic Institute (KREI) survey of 1,536 rice farmers from December 23 through 27, 2011, area planted is expected to decline to 847,000 HA, down about 0.8 percent from last year. However, high yield varieties will offset low planting intentions. Information about the 2011 rice crop is available in KS 1147 (Rice Production Update) Yield Rice farmers prefer planting high yield varieties to maximize returns. Consequently, increased yields are expected to offset the effects of declining paddy land. The KREI forecasts rice average yields ranging from 482Kg/10a to 532Kg/10a depending on weather conditions. KREI forecasts for the 2012 crop and Ministry of Food, Agriculture, Forestry and Fisheries (MIFAFF) historical data are shown in the following tables. Korea: 2012 Rice Production Forecast 2011 Rice Production 2012 Rice Production Forecast Area (1,000 HA) 854 847 Yield (Kg/10a) 495 482-532 Production (1,000MT) 4,224 4,083-4,506 Source: Korea Rural Economic Institute (KREI) Korea: Rice Area, Yield and Production Crop Area Yield Production Year (1,00HA) (KG/10A) (Milled, 1,000 MT) 2002 a/ 1,053 471 4,927 2003 b/ 1,016 441 4,451 2004 1,001 504 5,000 2005 980 490 4,768 2006 955 489 4,680 2007 950 464 4,408 2008 936 518 4,843 2009 925 532 4,916 2010 892 482 4,295 2011 854 495 4,224 Source: Ministry of Food, Agriculture, Forestry & Fisheries (MIFAFF) a/ Heavy rains during the summer and the effects of typhoon Rusa (Aug 31 ? Sep 1) b/ Cool and rainy days during the growing season and the effects of typhoon Maemi (Sep 9 - 12). Production Policy: Rice farmers receive two types of income support payments under the Rice Income Compensation Act (RICA), an area payment and a deficiency payment. In CY 2011, combined support payments totaled 617 billion won ($557 million). An explanation of how these payments are calculated follows. Area Payment: This payment is made on a ?per hectare? basis and is calculated using the average area of rice production during the base period 1998-2000. The 2011 area payment was 701,169 won ($634) on average per hectare. Paddy area covered under this support program declined to 883,000 hectare, down 0.2 percent from the previous year. Deficiency Payment: The deficiency payment is 85 percent of the difference between the national-average market price during the 2011 harvest season (Oct-Jan) and the 2011 target price, less the area payment. In 2011, the deficiency payment amounted to zero since the average harvest price of 2,079 won ($1.88) per kilogram (milled) was so close to the target price of 2,126 won ($1.92) per kilogram (milled). The area payment of 701,169 won per hectare is converted to a kilogram equivalent (144 won/Kg) by dividing it by the 1999-2003 Olympic average yields*. Due to strong farm gate prices during the harvest season, farmers received no deficiency payments in 2011. The deficiency payment calculation is shown as below. [(Target Price W/kg - Average Harvest Price W/kg) x .85] - Area Payment per HA /Avg. National Yield per HA [W 2,126 ? W 2,079] x .85] ? W 703,163/4,880 MT = minus W 104 per kilogram Note: *Olympic average yields: an average during a 5-year period, dropping the highest and lowest values. Government Rice Purchase Program under the Public Rice Stockholding Program (PRSP): The government purchases rice to ensure food security and price stability. Under the Public Rice Stockholding Program (PRSP), the Korean government procures domestic paddy rice during the harvest season (October-December) at the average market price and later sells it during the non-harvest periods at the prevailing domestic market price. Between October and December 2011, the Korean government purchased 261,000 MT (milled basis) of paddy rice, or 6 percent of the 2011 rice production, under PRSP. However, government procurements failed to reach the initial target of 340,000 MT because farmers were reluctant to participate in the program. Rice Reduction Plan: The Korean government revised its acreage reduction program for trimming rice production from 40,000 HA down to 5,000 HA. In recent months, decreasing rice stocks have caused considerable domestic market instability. Korea: Direct Payment Program for Rice Income Compensation Year Area Payment (A) Deficiency Payment (B) Total Area Paymen (Billion t Total Production Payment Total (1 00 Won) ,0 (Won/HA) (Billion (1,000 MT) (Won/Kg) (Billion HA)1/ Won) 2/ Won) (A)+(B) 2005 1,007 600,000 604.2 4,586 196.4 900.6 1,504.8 2006 1,024 700,000 716.8 4,637 94.2 437.1 1,153.9 2007 1,018 700,000 712.6 4,553 61.3 279.3 991.9 2008 1,014 700,000 709.8 4,499 none 0 709.8 2009 894 703,696 629.1 3,977 150.4 598.2 1,227.3 2010 885 703,163 622.3 3,850 194.9 750.4 1,372.7 2011 883 701,169 617.4 na none 0 617.4 Source: FAS/Seoul estimate based on MIFAFF data 1/ Those eligible for payment include farmers, farming union corporations, agricultural corporations, or anyone producing rice on a minimum of 0.1 HA of farmland between Jan 1, 1998 and Dec 31, 2000. 2/ based on the Olympic average rice yield is 4,880 Kg per hectare for 1999-2003 and actual cultivated area registered under the program. Korea: Government Rice Purchases under PRSP Crop Year Production(1,000 MT) Purchase(1,000 MT) % 2005 4,768 719 15.1 2006 4,680 504 10.8 2007 4,408 417 9.5 2008 4,843 400 8.3 2009 4,916 370 7.5 2010 4,295 340 7.9 2011 4,224 261 6.2 Source: Ministry of Food, Agriculture, Forestry & Fisheries (MIFAFF) a/ Plan Korea: NACF Rice Purchases a/ Crop Year Production(1,000 MT) Purchase(1,000 MT) % 2005 4,768 1,071 22 2006 4,680 1,306 28 2007 4,408 1,227 28 2008 4,843 1,617 33 2009 4,916 1,950 40 2010 4,295 1,380 32 2011 4,224 1,293 31 Source: Ministry of Food, Agriculture, Forestry & Fisheries (MIFAFF) a/ exclude independent RPC purchases Consumption: MY 2012/13 consumption is forecast at 4.8 million tons, the same as the current marketing year. Imported rice constitutes about 8 percent of total consumption. Korean consumers prefer short grain table rice and 84 percent of domestic production (all short grain) is consumed as table rice. Per capita table rice consumption continues to decline as eating habits change due to rising incomes and the growing popularity of Western foods. Annual per capita table rice consumption reached its peak at 136.4 Kg in 1970 and has gradually declined. FAS/Seoul estimates per capita table rice consumption at 68.5 Kg in MY 2012/13 based on declining consumption trends for table rice. Although processing accounts for only about 13.5 percent of total rice supply, consumption of rice for processing has grown rapidly in the past few years, In MY 2012/13, Korea?s food processing industry is forecast to use about 650,000 tons of rice (milled), of which half will be imported. Nearly 60 percent of processing rice is used for food processing and about 40 percent is used for liquor processing according to the latest official statistics. Consumption of processing rice is expected to continue to grow in the coming years as the government continues its efforts to globalize Korean cuisine, which includes rice cakes and other rice based snacks. Korea: Rice Utilization Pattern (1,000 MT, milled) Rice Year (Nov.- Oct.) MY 2008/09 MY 2009/10 a/ MY 2010/11 b/ MY 2011/12 c/ Table Rice 3,683 3,670 3,612 3,560 Processing 366 554 644 650 (for food) (278) (347) (400) (400) (for liquor) ( 88) (207) (244) (250) Seed 40 39 37 38 Other and Loss 702 435 882 729 Total Demand 4,791 4,698 5,175 4,977 Per Capita Table Rice Consumption (Kg) 74.0 72.8 71.2 69.8 Source: Ministry of Food, Agriculture, Forestry & Fisheries (MIFAFF) a/ Revised b/ Preliminary c/ Forecast Korea: Processing Rice Consumption Pattern (1,000 MT, milled) Purpose MY 2008/09 MY 2009/10 MY 2010/11a/ MY 2011/12b/ KRFA 132 180 234 280 KALIA 88 207 244 250 Others c/ 189 167 166 120 Total 366 554 644 650 Source: Ministry of Food, Agriculture, Forestry & Fisheries (MIFAFF) a/ MIFAFF preliminary b/ MIFAFF forecast c/ traditional foods or beverage made of local rice. Note: Korea Rice Foodstuffs Association (KRFA), Korea Alcohol & Liquor Industry Association (KALIA) Korea: Rice Supply for Processing Purposes to KRFA Members (Metric Ton, Milled) Calendar Year Local Rice Imported Rice Total 1996 130,632 3,000 133,632 1997 30,171 57,957 88,128 1998 933 77,259 78,192 1999 0 74,214 74,214 2000 0 67,112 67,112 2001 0 66,850 66,850 2002 79 73,884 73,963 2003 306 84,851 85,157 2004 249 91,624 91,873 2005 215 96,020 96,235 2006 67 97,250 97,317 2007 210 101,064 101,274 2008 572 109,552 110,124 2009 806 131,344 132,150 2010 24,887 154,821 179,708 2011 125,910 108,215 234,125 2012a/ na na 280,000 Source: Korea Rice Foodstuffs Association (KRFA) a/ KRFA?s forecast Korea: 2011 Rice Supply for Processing Purposes to KRFA Members (Metric Ton, Milled) Item Quantity Ratio (%) Cake/Noodle 90,620 39 Confectionary 12,260 5 Flour 45,798 20 Alcohol 54,888 23 Seasoning/Sweetness 23,851 10 Others 6,708 3 Total 234,125 100 Source: Korea Rice Foodstuffs Association (KRFA) Trade: Korea imports rice as part of its WTO Minimum Market Access (MMA) agreement. Import volumes will continue to grow according to the predefined MMA schedule until the end of 2014. The government?s decision to import earlier under the 2012 MMA is to help stabilize domestic rice prices. Imports: MY 2012/13 rice imports are forecast at about 400,000 tons (milled). Under the 2013 MMA, Korea is scheduled to purchase 388,353 tons (milled) of rice, which will likely occur in the first half of 2013. Of the total committed purchase amount, approximately 120,000 MT (milled), or 29 percent of the 2013 MMA, will be U.S. medium grain rice, under Country Specific Quota (CSQ) and Most Favored Nation (MFN) quota allocations. MY 2011/12 rice imports are expected to reach 600,000 tons (milled) under both the 2011 MMA and the 2012 MMA commitments. As of February 2012, the Korean government started purchasing 368,006 MT under 2012 MMA. Prior to these purchases, the government successfully acquired 347,658 MT under the 2011 MMA in early December 2011. 2012 MMA Rice Purchasing Plan: In late January 2012, the Korean government released its 2012MMA rice purchasing plan. Under the MMA plan, Korea will purchase 368,006 MT of rice, comprising of 162,778 MT under the global quota (GQ) and several country specific quotas (CSQ) totaling 205,228 MT. The United States is expected to receive around 100,000 MT, or 27 percent of the total MMA taking into account the U.S. CSQ and the medium grain allocation. Please refer to 2012 MMA Rice Purchasing Plan for more details. 2011 MMA Purchases Completed: In early December 2011, the Korea Agro-Fisheries and Food Trade Corporation (aT) completed the tendering process for the 2011 MMA commitments for rice. Korea purchased a total of 347,658 metric tons (MT) of rice from the United States, China, Thailand, Vietnam and Myanmar. The U.S. share was 29.2 percent, with contracts totaling 101,490 MT (milled) worth $87 million. The bulk of the U.S. contracts, roughly 76,031 MT, were for brown rice (equivalent to 68,428 MT on milled basis) with delivery period from October through December 2011 and the remaining 33,062 MT were for milled rice with delivery dates from January through June 2012, respectively. More details on the tender results are available in KS 1209 (2011 MMA Rice Tender Results). Korea: Rice Contracts by Country, 2011 MMA (Unit: MT, Milled Basis) Country Global Quota CSQ Total (%) Processing Table Processing Table USA 46,825 4,589 22,603 27,473 101,490(29) China 44,911 0 49,024 67,135 161,070(46) Thailand 20,694 0 24,863 5,100 50,657(15) Vietnam 19,441 0 0 0 19,441(6) Myanmar 15,000 0 0 0 15,000(4) S.Total 146,871 4,589 96,490 99,708 347,658 G. Total 151,460 196,198 347,658 Source: Korea Agro-Fisheries and Food Trade Corporation (aT) Korea: U.S. Rice Sales to Korea, 2011 MMA Contracts Milled rice(MT) Brown rice(MT) Arrival unit price Amount ($/MT) ($) 1 11,111a/ 807.00 8,966,577 2 21,810a/ 782.00 17,055,420 3 1,000a/b/ 965.73 965,730 4 20,114 822.00 16,533,708 5 17,996 a/ 749.30 13,484,403 6 14,726 866.00 12,752,716 7 5,000 763.00 3,815,000 8 10,000 799.99 7,999,900 9 2,747 751.16 2,063,437 10 4,589a/c/ 766.00 3,515,174 total 33,062 76,031 87,152,064 Source: Korea Agro-Fisheries and Food Trade Corporation (aT), totaling 101,490MT in milled basis or 29.2 percent of total MMA. a/ under the Global Quota b/ Sweet rice for processing purpose c/ converted from Australian CSQ Auctions: The aT, the government?s state trading arm, manages the purchasing and selling of imported table rice. The aT sells table rice shipments through a public auction system. On the other hand, the Ministry of Food, Agriculture, Forestry, and Fisheries (MIFAFF) sells processing rice to end-users such as food processors and alcoholic beverage producers throughout the year. The 2011 MMA shipments started arriving in late 2011 and will continue till the June 2012. Approximately 104,297 MT of table rice will be delivered over this period. The aT kicked off table rice auctions for U.S. rice in December 2011, Thai rice in February 2012 and Chinese rice March 2012, respectively, under 2011 MMA. The auctions for U. S. rice under 2011 MMA are expected to be completed shortly considering favorable market response for U.S. table rice in the first half of 2012. In the second half, U.S. table rice imported under 2012 MMA will continue to be marketed through aT?s selling auctions. However, currently the progress of auctions for other origins as oppose to U.S. rice has been a little slower. Korea: Status of Rice Auction for Table Rice under 2010 CSQ (Unit: metric tons, milled basis, as of January 18, 2012) C USDA Rate of ommodity Gr oned Off Balance ade Total Table Rice CSQ Aucti Auctioned Off (%) U. 27,915 27,890 25 100 S. Medium Gr #1ain #3 2,622 2,622 0 100 C ,495 1,839 95 hinese Short Gr #1 39,334 37ain #3 26,222 22,390 3,832 85 Thai Long Grain #1 2,100 2,100 0 100 Total 98,193 92,497 5,696 94 Source: Korea Agro-Fisheries and Food Trade Corporation (aT) Korea: Status of Rice Auction for Table Rice under 2011 CSQ (Unit: metric tons, milled basis, as of April 9, 2012) C of omm USDA odity Gr ctioned O Rate ff Balance ade Total Table Rice CSQ Au Auctioned Off (%) U. 0 S. Medium #1 29,315 17,632 11,683 6 Grain #3 2,747 0 2,747 0 C #1 40,281 3,603 36,678 9 hinese Short Grain #3 26,854 409 26,445 2 #1 2,100 90a/ 2,010 4 Thai Long Grain #3 3,000 428 2,572 14 Total 104,297 22,162 82,135 21 Source: Korea Agro-Fisheries and Food Trade Corporation (aT) a/ #1 Long Grain Aroma Rice sold at Korean won 1,510/kg on average. Korea: Auctioned-Off Prices of Imported Table Rice Comparing with Local Rice (Unit: Korean Won per Kg on Average) U.S. Medium Chinese Short Grain Thai Long Korean Short Grain Grain (Medium Grain) Grain Wholesale Auctioning-off Period High Medium #1 #3 #1 #3 #1 Quality Quality April-September 2006 (2005 MMA) 1,138 991 1,274 1,133 555 1,861 1,812 March-August 2007 (2006 MMA) 1,363 1,211 1,357 1,303 953 1,961 1,916 February-August 2008 (2007 MMA) 1,542 1,510 1,487 1,558 1,132 2,034 1,983 February2009 -May 2010 1,125 (2008 MMA) 1,160 994 (1,100) na 1,329 1,913 1,845 February 2010-March 2011 914 (2009 MMA) 970 881 (850) 893 672 1,692 1,635 April 2011-January 2012 (2010 MMA) 913 1,074 c/ 707 612 518 1,959 1,886 December 2011-April 2012 (2011MMA b/) 1,109 na 994 966 809d/ 2,081 2,033 Source: Korea Agro-Fisheries and Food Trade Corporation (aT) a/ Plans to start auctioning off soon after completion of selling auctions for #1 grade rice. b/ ongoing c/ Auctioned-off during October-December 2011 d/ #3 Exports: Korea has exported negligible amount of rice to other countries. In CY 2011, Korea exported 3,782 MT of milled rice with Australia importing 1,440 MT or 38 percent of total rice exports followed by 36 other countries. The U.S. imported 161 MT of Korean rice for the period. Korea: Rice Export (Milled) Calendar Year To the World To the United States Quantity (MT) Value (US$1,000) Quantity (MT) Value (US$1,000) 2005 18 89 5 5 2006 9 40 0.2 1 2007 507 1,322 333 876 2008 356 829 115 285 2009 4,183 7,300 443 777 2010 3,765 6,394 272 587 2011 3,782 6,277 161 244 Source: Korea Customs Service Stocks: MY 2012/13 ending stocks (at the end of October 2012) are forecast to decrease to about 0.7 million tons, 14 percent of total consumption, as domestic rice consumption for processing purpose will continue increasing due to a government supported program. MY 2011/12 stocks (at the end of October 2012) are forecast at 0.9 million tons, equivalent to roughly 18 percent of domestic consumption. Ending stocks of imported rice continue to increase as the government has encouraged the use of old domestic rice in food processing. Consequently, imported rice stocks for MY 2011/12 are expected to reach 450,000 metric tons as of the end of October 2012. Korea: Status of Rice Stocks (Milled rice, 1,000 MT, as of end October) Rice Year (Nov.-Oct.) 2006/07 2007/08 2008/09 2009/10a/ 2010/11b/ 2011/12c/ Total 702 683 990 1,505 1,026 870 Government Stock 596 608 805 821 984 811 -Domestic Rice 456 510 698 639 696 362 -Imported Rice 140 98 107 182 288 449 NACF d/ 0 0 151 616 0 0 Civil Stock 106 75 34 68 42 59 Source: FAS/Seoul Estimate based on MIFAFF data ? starting 2007/08 there has been difference between Post & FAS estimates a/ MIFAFF Preliminary b/ FAS/Seoul Preliminary c/ FAS/Seoul forecast d/ NACF purchase under the government loan program. Production, Supply and Demand Data Statistics: Rice PS&D Rice, Milled Korea, Republ 2010/2011 2011/2012 2012/2013 ic of Market Year Begin: Nov Market Year Begin: Nov Market Year Begin: Nov 2010 2011 2012 USDA New USDA New USDA New Official Post Official Post Official Post Area Harvested 892 892 854 854 847 Beginning Stocks 1,453 1,453 1,281 974 818 Milled Production 4,295 4,295 4,224 4,224 4,200 Rough Production 5,810 5,810 5,616 5,616 5,666 Milling Rate (.9999) 7,392 7,392 7,522 7,522 7,413 MY Imports 436 405 365 600 400 TY Imports 512 532 365 600 400 TY Imp. from U.S. 150 143 0 150 120 Total Supply 6,184 6,153 5,870 5,798 5,418 MY Exports 3 4 3 3 3 TY Exports 3 4 3 3 3 Consumption and Residual 4,900 5,175 4,800 4,977 4,800 Ending Stocks 1,281 974 1,067 818 615 Total Distribution 6,184 6,153 5,870 5,798 5,418 1000 HA, 1000 MT, MT/HA RICE -- STATISTICAL TABLES Korea: Import Trade Matrix of Rice Import Trade Matrix Country Korea, Republic of Commodity Rice, Milled Time Period Jan/Dec Units: 1,000MT Imports for: 2010 2011 U.S. 95 U.S. 143 Others Others China 160 China 244 Thailand 59 Thailand 107 Pakistan 6 Pakistan 8 Myanmar 15 Vietnam 15 Total for Others 225 389 Others not Listed 0 0 Grand Total 320 532 Korea: Farm Gate Price Index of Non-Glutinous Rice (2005=100) Year and Months Price Index 2001 104.6 2002 103.6 2003 107.0 2004 109.3 2005 100.0 2006 93.8 2007 98.8 2008 104.4 2009 98.1 2010 84.9 2011 99.1 Quarterly 2010 2011 2012 First 87.4 92.5 107.9 Second 83.8 99.7 na Third 82.4 100.0 na Fourth 85.8 104.1 na Source: Statistics Korea (KOSTAT) Korea: Monthly Wholesale Price of Milled Rice (High Quality) Month\Year CY 2010 CY 2011 CY 2012 Won/Kg US$/Kg Won/Kg US$/Kg Won/Kg US$/Kg January 1,710 1.50 1,764 1.58 2,090 1.83 February 1,710 1.48 1,794 1.60 2,099 1.87 March 1,693 1.49 1,873 1.67 2,100 1.87 April 1,677 1.50 1,938 1.79 2,100 1.86 May 1,639 1.41 1,950 1.80 Na Na June 1,630 1.34 1,950 1.81 Na Na July 1,630 1.35 1,950 1.84 Na Na August 1,619 1.37 1,950 1.82 Na Na September 1,605 1.38 1,950 1.74 Na Na October 1,605 1.43 2,022 1.74 Na Na November 1,710 1.52 2,051 1.76 Na Na December 1,740 1.52 2,076 1.81 Na Na Average 1,665 1.44 1,939 1.75 Na Na Source: Korea Agricultural Marketing Information Service (KAMIS) Note: Monthly Average Exchange Rate is applied. Korea: Monthly Retail Price of Milled Rice (High Quality) Month\Year CY 2010 CY 2011 CY 2012 Won/Kg US$/Kg Won/Kg US$/Kg Won/Kg US$/Kg January 2,101 1.84 2,064 1.84 2,194 1.92 February 2,090 1.81 2,098 1.87 2,202 1.96 March 2,080 1.83 2,138 1.91 2,195 1.95 April 2,102 1.88 2,217 2.04 2,202 1.95 May 2,086 1.80 2,235 2.06 Na Na June 2,057 1.70 2,254 2.09 Na Na July 2,052 1.70 2,234 2.11 Na Na August 2,054 1.74 2,203 2.05 Na Na September 2,031 1.74 2,201 1.97 Na Na October 2,039 1.82 2,234 1.94 Na Na November 2,017 1.79 2,214 1.96 Na Na December 2,020 1.76 2,190 1.91 Na Na Average 2,061 1.78 2,190 1.98 Na Na Source: Korea Agricultural Marketing Information Service (KAMIS) Note: Monthly Average Exchange Rate is applied. Korea: Allocation of the MMA for 2005-2014 (MT, Milled rice) Calendar Year Total Global Quota Country Specific Quota (CSQs) Total USA China Thailand Australia 2005 225,575 20,347a/ 205,228 50,076 116,159 29,963 9,030 2006 245,922 49,724b/ 196,198 50,076 116,159 29 c/,963 2007 266,270 70,072d/ 196,198 50,076 116,159 29,963 c/ 2008 286,617 90,419e/ 196,198 50,076 116,159 c/ 29,963 2009 306,964 110,766f/ 196,198 50,076 116,159 29,963 c/ 2010 327,311 131,113g/ 196,198 50,076 116,159 29,963 c/ 2011 347,658 151,460h/ 196,198 50,076 116,159 c/ 29,963 2012 368,006 162,778 205,228 50,076 116,159 29,963 9,030 2013 388,353 183,125 205,228 50,076 116,159 29,963 9,030 2014 408,700 203,472 205,228 50,076 116,159 29,963 9,030 Source: MIFAFF and Korea Agro-Fishery Trade Corporation (aT) a/ Global quota allocations: United States 6,104 MT; China 11,191 MT; and Thailand 3,052 MT. b/ Global quota allocations: United States 13,025 MT; China 23,080 MT; and Thailand 13,619 MT. c/ Australia CSQ allocation converted to MFN due inability to fulfill quota. d/ Global quota allocations: United States 21,643MT; China 32,352MT; and Thailand 16,077 MT. e/ Global quota allocations: United States 19,534MT; China 35,126MT; and Thailand 35,759 MT. f/ Global quota allocations: United States 31,270MT; China 43,629MT; Thailand 30,347 MT; and Pakistan 5,520MT g/ Global quota allocations: United States 43,643MT; China 42,411MT; Thailand 40,347 MT; and Pakistan 4,712MT h/ Global quota allocations: United States 51,414MT; China 44,911MT; Thailand 20,694MT; Vietnam 19,441MT; and Myanmar 15,000MT Korea: Import Schedule of Table Rice (MT, Milled Rice) Calendar Year Total Table Purpose Rate of Table Rice (%) 2005 225,575 22,557 10 2006 245,922 34,429 14 2007 266,270 47,928 18 2008 286,617 63,055a/ 22 2009 306,964 79,810b/ 26 2010 327,311 98,193 30 2011 347,658 104,297 30 2012 368,006 110,401 30 2013 388,353 116,505 30 2014 408,700 122,610 30 Source: Ministry of Food, Agriculture, Forestry & Fisheries (MIFAFF) a/ Of them, 24,934MT of Chinese rice was diverted to the processing purpose in CY2010 b/ Of them, 33,303 MT of Chinese rice and 1,500 MT of Thai rice are diverted to the processing purpose in CY2011 Korea: Rice allocation per Country on the buying tender under MMA (Milled basis, MT) Calendar MMA U.S.A. China Thailand Australia Vietnam Pakistan Others Year Quota 1995 51,307 0 0 0 0 0 0 51,307b/ 1996 64,134 0 64,134 0 0 0 0 0 1997 76,961 0 58,961 18,000 0 0 0 0 1998 89,787 0 83,487 6,300 0 0 0 0 1999 102,614 0 80,114 13,500 0 9,000 0 0 2000 102,614 0 84,614 18,000 0 0 0 0 2001 128,268 27,000 63,000 18,000 20,268 0 0 0 2002 153,921 36,000 95,421 22,500 0 0 0 0 2003 179,575 49,500 103,075 27,000 0 0 0 0 2004 205,228 58,500 117,028 29,700 0 0 0 0 2005 225,575 56,179 127,351 33,015 9,030 0 0 0 2006 245,922 63,101 145,343 37,478 0 0 0 0 2007 266,270 71,719 148,511 46,040a/ 0 0 0 0 2008 286,617 69,610 151,285 65,722 0 0 0 0 2009 306,964 81,346 159,788 60,310 0 0 5,520 0 2010 327,311 93,719 158,570 70,310 0 0 4,712 0 2011 347,658 101,490 161,070 50,657 0 19,441 0 15,000c/ Total 3,160,726 708,164 1,801,752 516,532 29,298 28,441 10,232 66,307 Source: FAS/Seoul a/ Thai suppliers delivered only 8,470 MT of the total contracted amount b/ India c/ Myanmar Korea: Foreign Exchange Rate (Korean Won against US$) Month CY 2011 CY 2012 January 1,119 1,144 February 1,119 1,123 March 1,120 1,126 April 1,085 1,129a/ May 1,083 Na June 1,080 Na July 1,058 Na August 1,073 Na September 1,120 Na October 1,152 Na November 1,131 Na December 1,147 Na Average 1,107 Na Source: Global Financial Service a/ an average for April 1-9, 2012
Posted: 27 April 2012

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