Grain and Feed Update

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

Posted on: 27 Nov 2011

MY 2011/12 wheat import estimate is unchanged at 4.2 million tons with 2.2 million tons for milling and 2.0 million tons for feed. Imports of U.S. wheat are expected to be 1.3 million tons due to lower than expected exports of U.S. feed grade wheat. Corn imports are revised upward from May estimate to 8.0 MMT (5.5 MMT from the United States) due to higher feed demand in the poultry and beef cattle sectors.

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: 11/2/2011 GAIN Report Number: KS1144 Korea - Republic of Grain and Feed Update Grain and Feed Update Approved By: M. Kathryn Ting Prepared By: Sunchul Choi//Gerald Smith Report Highlights: MY 2011/12 wheat import estimate is unchanged at 4.2 million tons with 2.2 million tons for milling and 2.0 million tons for feed. Imports of U.S. wheat are expected to be 1.3 million tons due to lower than expected exports of U.S. feed grade wheat. Corn imports are revised upward from May estimate to 8.0 MMT (5.5 MMT from the United States) due to higher feed demand in the poultry and beef cattle sectors. With continued reduction in planted area, rice production will be the lowest in three decades. 2011 imports under the Minimum Access Agreement reached 327,311 MT (93,719 MT from U.S.). Post: Commodities: Seoul Wheat Corn Rice, Milled Author Defined: WHEAT Production: MY 2011/12 wheat production is estimated at 44,000 tons because of increased harvested area. The government?s loan program to finance purchases also has helped increase the demand for domestic milling wheat. Additionally, the government also has provided drying and storing facilities to local wheat producers. Recently announced official wheat production for MY 2010/11 reached 39,116 tons, up approximately 13,000 tons due to a sharp increase of wheat acreage. Korean wheat farmers are expected to continue increasing planted area in the near future in response to greater demand from the local bakery and confectionary sectors. The greater demand for local food products made of locally grown wheat will provide support to the government?s ambitious target of reaching 200,000 tons of milling wheat by 2015. The government plan to end its purchasing program for locally grown barley by 2012 will also contribute to the increasing wheat harvested area. It is expected that most of the barley area will be converted to primarily producing wheat. However, production cost will be a critical factor in continuing expanding wheat acreage because local wheat prices have more than double the prices for imported wheat. 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) a/ preliminary b/ FAS/Seoul forecast; yield is based on government project and five year average. Consumption: In MY 2011/12, total wheat consumption is expected to reach 4.4 million tons, an increase of 200,000 tons from the initial forecast. Milling wheat consumption is expected to be 2.4 million tons, while feed wheat consumption will remain unchanged at 2.0 million tons in view of the greater worldwide availability and based on buying contracts of feed grade wheat to be delivered for the first six months. In MY 2010/11, total wheat consumption reached 4.3 million tons, up 300,000 tons from Post?s previous forecast due to a greater demand for both milling wheat and feed grade wheat. Korea: Post Estimates of Domestic Wheat Use (1,000 MT, July/June) Year 2007/08 2008/09 2009/10 2010/11 a/ Imported Milling Wheat 2,267 2,041 2,136 2,312 Flour Imports b/ 105 69 127 63 Flour Exports b/ 73 56 59 96 Local Wheat 8 10 26 39 FSI Consumption c/ 2,307 2,064 2,230 2,318 Feed Wheat 686 942 2,172 1,965 Total Consumption 2,993 3,006 4,402 4,283 Source: Korea Feed Association (KFA) and Korea Flour Millers Industry Association (KOFMIA) a/ FAS/Seoul estimate b/ Wheat basis c/ include wheat flour imports Wheat Trade: MY 2011/12 wheat imports are unchanged from Post?s initial forecast at 4.2 million tons, of which 2.2 million tons is for milling (including flour on a wheat equivalent basis) and 2.0 million tons for feed. According to trade and sales contract data of Canadian origin and optional origin, nearly 1.2 million tons have already been contracted with delivery for the first six months in MY2011/12. International traders expect Korea to import between 2.0 million and 2.5 million tons of feed wheat depending on exports from Korea?s traditional feed wheat exporters. Imports of U.S. wheat in MY 2011/12 are expected to be 1.3 million tons due to lower than expected exports of U.S. feed grade wheat. MY 2010/11 wheat imports reached 4.6 million tons, composed of 2.5 million tons of milling wheat and 2.1 million tons of feed grade wheat because of bullish international prices and a strong local currency. Wheat flour millers secured more stocks because of bullish wheat market trends. Korea?s imports from the United States accounted for 54 percent of total milling wheat, followed by Australia at 39 percent and Canada at 6 percent. Meanwhile, imports from Canada accounted for 48 percent of total feed wheat imports, followed by Australia at 15 percent, Ukraine at 10 percent and Romania at 7 percent. Korea: Wheat Imports (1,000 MT, Customs Cleared Basis) Marketing Year (July/June) Feed Wheat Milling Wheat Flour Imports Total 1/ 04/05 1,089 2,385 29 3,503 05/06 1,536 2,220 41 3,797 06/07 976 2,298 69 3,343 07/08 565 2,317 105 2,987 08/09 1,151 2,058 69 3,278 09/10 2,164 2,071 127 4,362 10/11 a/ 2,075 2,520 63 4,658 Source: Korea Customs Service 1/ Wheat basis a/ FAS Seoul forecast based on the buying contracts to date. b/ based on the first eight months imports Korea: MY 20011/12 Monthly Wheat Imports by Origin (1,000 MT, based on Customs Clearance) Country U. S. Australia Canada China Other Total Milling Wheat 2011 July 22 104 32 0 0 157 August 105 64 31 0 0 200 September 46 74 2 0 0 122 Total(Jul-Sep) 2011 173 242 65 0 0 480 Total(Jul-Sep) 2010 279 240 37 0 2 558 Feed Wheat 2011 July 0 53 150 0 0 203 August 0 57 160 0 1 218 September 0 81 82 0 0 163 Total(Jul-Sep) 2011 0 190 392 0 1 584 Total(Jul-Sep) 2010 229 0 143 0 29 401 Total Wheat 2011 July 22 157 182 0 0 361 August 105 121 191 0 1 419 September 46 155 84 0 0 285 Total(Jul-Sep) 2011 173 433 458 0 1 1,065 Total(Jul-Sep) 2010 508 240 181 0 31 960 Source: Korea Customs Service Korea: MY 2011/12 Feed Wheat Contracts by Estimated Time of Arrival (ETA) (Unit: 1,000 MT, as of Sept, 2011) ETA Quantity Price (US$ 1//MT) Jul. 2011 165 307 Aug. 165 304 Sep. 220 293 Oct. 165 286 Nov 275 270 Dec 165 274 Total 1,155 Source: Local Grain Traders 1/ CNF on Weighted Average Flour Trade: MY 2011/12 flour imports are forecast at 73,000 tons (100,000 tons wheat equivalent), as food processors continue searching for the most competitively priced flour. MY2010/11 flour imports declined to 46,150 tons (63,133 tons wheat equivalent) because the government?s intervention stabilized domestic price of wheat flour despite bullish trend in the international wheat market. MY 2010/11 flour exports sharply increased to 72,084 tons (96,112 tons wheat equivalent), up 63 percent from last year. As domestic flour prices stabilized, flour millers exported more wheat flour primarily to Japan. However, flour millers are expected to cut-back on exports as international wheat prices are expected to stay high in MY 2011/12. 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: 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 72,084 Wheat Basis 93,369 82,563 72,987 55,719 58,979 96,112 Source: Korea Customs Service (KCS) Wheat PSD Production, Supply and Demand Data Statistics: Wheat Korea, Republic 2009/2010 2010/2011 2011/2012 of Market Year Begin: Jul Market Year Begin: Jul Market Year Begin: May 2009 2010 2011 USDA New USDA New USDA New Official Post Official Post Official P ost Area Harvested 5 5 13 13 15 13 (1000 HA) Beginning Stocks 1,137 1,137 1,078 1,064 1,451 1,380 (1000 MT) Production 26 26 37 37 50 44 (1000 MT) MY Imports 4,470 4,362 4,761 4,658 4,700 4,200 (1000 MT) TY Imports 4,470 4,362 4,761 4,658 4,700 4,200 (1000 MT) TY Imp. from U.S. 1,231 1,116 1,518 1,672 0 1,300 (1000 MT) Total Supply 5,633 5,525 5,876 5,759 6,201 5,624 (1000 MT) MY Exports 105 59 125 96 100 50 (1000 MT) TY Exports 105 59 125 96 100 50 (1000 MT) Feed and Residual 2,200 2,172 2,100 1,965 2,300 2,000 (1000 MT) FSI Consumption 2,250 2,230 2,200 2,318 2,200 2,400 (1000 MT) Total Consumption 4,450 4,402 4,300 4,283 4,500 4,400 (1000 MT) Ending Stocks 1,078 1,064 1,451 1,380 1,601 1,174 (1000 MT) Total Distribution 5,633 5,525 5,876 5,759 6,201 5,624 (1000 MT) Yield 5. 5.2 3. 2.8462 3. 3.3846 (MT/HA) Wheat Import Trade Matrix 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: exclude the import of wheat flour 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 Na October 146 Na 195 Na November 165 Na 190 Na December 180 Na 198 Na January 173 Na 222 Na February 134 Na 160 Na 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 CORN Production: Corn production is negligible, accounting for less than one percent of total consumption. Planted area for MY 2011/12 is around 15,828 hectares, while production is estimated at 78,000 MT based on the preceding five-year average yield. The Korean Statistical Information Service (KOSIS) released recently its data on harvested area. The government will subsequently release the 2011 official production figures in April 2012. 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), National Statistical Office (NSO) a/ FAS/Seoul forecast based on five-year average yield Consumption: MY 2011/12 corn consumption is forecast to be 8.1 million MT, up 0.3 million MT from Post?s May forecast due to an anticipated greater demand for feed corn from the beef cattle and poultry sectors., which has helped to offset the impact of the FMD-related depopulation in the hog sector. The estimated Dec 2011 layer and broiler inventory will be up 1.3 percent from a year earlier, and the dairy and beef cattle inventory up 1.6 percent. Food, seed, and industrial (FSI) corn consumption is forecast to remain around 2.1 million MT unchanged from Post?s initial forecast due to stable demand for processed corn products. Compound feed production is estimated at around 17 million metric tons in MY 2011/12, achieving similar levels to MY 2010/11. Feed corn is the main ingredient used in compound feed accounting for 35 to 40 percent of total ingredients. This percentage is projected to remain relatively constant in the long-run because of local livestock producers? preferences for compound feed. On the same note, compound feed is composed of 35 percent of feed wheat. Rising feed wheat use has caused total corn utilization in compound feed to stay around 6 million metric tons in recent years. Major corn processors continue using non-biotech IP corn imported from Serbia, Hungary, Brazil and South Africa for food. On the other hand, GM corn imported from the United States is primarily used for industrial purpose. Many food processing companies have been reluctant to use ingredients sourced from biotech corn. Some companies using starch and corn syrup since these items are reportedly derived from non-biotech corn. MY 2010/11corn consumption is now estimated at 8.2 million MT, down about 2 percent from the previous year due mainly to the sharp decrease in swine numbers caused by FMD. Feed demand for the swine sector was down nearly 13 percent. The FSI corn consumption increased to 2.1 million MT, up 7 percent from the previous year due to a greater demand for high fructose corn syrup (HFCS) replacing sugar demand in the soft drink industry during the current marketing year. 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 c/ 6,074 2,060 89 8,223 2011/12 c/ 6,000 2,000 100 8,100 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 2010/11a/ MY 2011/12a/ Sub. Total Grains and Grain Substitutes 10,274 10,954 10,674 10,500 - Wheat 1,416 2,149 2,100 2,000 - Corn 6,368 6,362 6,074 6,000 - Other Grains and Grain Substitute b/ 2,490 2,443 2,500 2,500 Others c/ 6,060 6,301 6,326 6,500 Grand Total 16,334 17,255 17,000 17,000 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 4,500 Cattle 5,550 5,915 6,117 6,200 Others b/ 1,009 1,233 1,367 1,400 Total 16,279 17,177 16,966 17,000 Source: MIFAFF a/ Preliminary b/ FAS/ Seoul forecast c/ include ducks, pet food, rabbit, horse, sheep, deer, quail etc. Trade: MY 2011/12 corn import forecast is revised to 8.0 million MT, up 300,000 tons from Post?s May forecast due to increasing feed corn imports reaching 6.0 million MT. The increase in feed corn imports is due mainly to a greater demand from the beef cattle and poultry sectors. Additionally, the greater demand from the beef cattle and poultry sectors has also stemmed the negative impact of the November 2010 FMD outbreak on feed corn imports. MY 2011/12 U.S. corn imports are expected to stay around 5.5 million tons, remaining unchanged from the previous forecast. A reduction in U.S. corn production will lead to increased imports from the Black Sea region. As of September 2011, importers have contracted 2.0 million ton of corn for October 2011 to April 2012 deliveries. Most of the contracted purchases for feed corn to date are optional origin at seller?s option among the United States, South America or South Africa with a price range of $312-363 per metric ton CNF while corn processors have contracted for No. 2 GM/non-GM yellow corn from the United States or South America at seller?s option and conventional corn from Eastern Europe, EU or South Africa at seller?s option with a price range of $330-365 per metric ton CNF. Corn imports for MY 2010/11 increased to 8.1 million MT, up 0.1 million tons from Post?s previous estimate due to Korean buyers? securing more stocks in a bullish corn market and higher than expected feed demand. Feed corn import increased to 6.1 million tons, up 0.1 million tons from the previous forecast while processing corn import remains at 2.0 million tons unchanged from the previous forecast. The new Grain Trading Company, a consortium formed between the state-run Korea Agro-Fisheries Trade Corporation (aT), Samsung C&T Corporation, STX Corporation and Hanjin Shipping has made contracts for corn and soybeans with the aT and Nonghyup Feed (NOFI) respectively. 20,000 metric tons of U.S. soybeans and 50,000 metric tons of U.S. corn are reportedly expected to be delivered during the second half of this year. The consortium has a tentative plan to deliver about 300,000 metric tons of corn and soybeans next year. The initial objective of the aT strategy is to directly secure at least 20 percent or 2.5 million MT of the nation?s total annual imports of grains and oilseeds, including 1.5 million MT of corn by 2015. 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 a/ 6,060 2,047 8,107 5,183 1,133 6,316 78 Source: Korea Customs Service a/ FAS/Seoul estimate based on corn imports for the first eleven months Korea: Corn Contracts by Estimated Time of Arrival (ETA) (Unit: 1,000 MT, as of September 2011) ETA U.S. EU India Others 1/ Total Oct. 2011 110 0 0 500 610 Nov. 55 0 0 540 595 Dec. 165 0 0 215 380 Jan. 2012 66 0 30 235 331 Feb. 0 0 0 55 55 Mar. 0 0 0 55 55 April 0 0 0 55 55 Total 396 0 30 1,655 2,081 Source: Local Grain Traders 1/ optional origins at seller?s option out of USA, SOAM, EU or South Africa Corn PSD Corn Korea, Republic 2009/2010 2010/2011 2011/2012 of Market Year Begin: Oct Market Year Begin: Market Year Begin: 2009 Oct 2010 O ct 2011 USDA New USDA New USDA New Official Post Official Post Official P ost Area Harvested 15 15 16 16 16 16 (1000 HA) Beginning Stocks 1,466 1,466 1,610 1,609 1,583 1,566 (1000 MT) Production 77 77 73 74 78 78 (1000 MT) MY Imports 8,461 8,460 8,200 8,107 7,700 8,000 (1000 MT) TY Imports 8,461 8,460 8,200 8,107 7,700 8,000 (1000 MT) TY Imp. from U.S. 6,795 7,504 0 6,316 0 5,500 (1000 MT) Total Supply 10,004 10,003 9,883 9,790 9,361 9,644 (1000 MT) MY Exports 0 0 0 0 0 0 (1000 MT) TY Exports 0 0 0 0 0 0 (1000 MT) Feed and Residual 6,362 6,362 6,200 6,074 5,700 6,000 (1000 MT) FSI Consumption 2,032 2,032 2,100 2,150 2,100 2,100 (1000 MT) Total Consumption 8,394 8,394 8,300 8,224 7,800 8,100 (1000 MT) Ending Stocks 1,610 1,609 1,583 1,566 1,561 1,544 (1000 MT) Total Distribution 10,004 10,003 9,883 9,790 9,361 9,644 (1000 MT) Yield 5. 5.1333 5. 4.625 5. 4.875 (MT/HA) Corn Import Trade Matrix 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: Animal Inventory (1,000 Head, 1,000 Birds) Animal Year March June September December Beef Cattle 2007 2,043 2,179 2,220 2,201 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 3,057d/ 2,994d/ Dairy Cattle 2007 461 456 455 453 2008 451 445 445 446 2009 448 439 438 445 2010 449 432 429 430 2011 396 403 403d/ 405d/ Swin a/e 2007 9,345 9,462 9,659 9,606 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 7,550 d/ 7,700 d/ L b/ayer 2006 53,520 55,200 55,388 57,238 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 61,030 60,720 62,270d/ 61,570d/ B c/roiler 2006 63,935 84,279 57,713 55,375 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 69,930 110,120/ 72,960d/ 76,000d/ 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/ KREI forecast RICE PRODUCTION The Korean Statistical Information Service (KOSIS) recently released its 2011 rice production estimates at 4.22 million metric tons (MMT) based on a nationwide survey of 6,684 rice standard fields conducted from September 15 to 21, 2011. The estimate places Korean rice production for 2011 at the lowest since 1980 and down 1.8 percent from last year. The survey results show total harvested acreage at 853,823 HA, which is a 4.3 percent decline from the previous year. However, anticipated higher yields due to favorable weather conditions since late August partially offset rice reduction caused by acreage decline. Due to the current favorable weather conditions and these survey results, Post estimate regarding the 2011 rice production remains unchanged at 4.3 million metric tons (MMT), which is the same as the initial forecast. KOSIS will release its final production estimate shortly after the rice harvest is completed in mid-November. Rice Reduction Plan In the face of falling consumption of rice and consecutive bumper crops in 2008 and 2009, the government is encouraging rice farmers, to cultivate alternative crops under a 3 years rice reduction program running from 2011 through 2013. The Korean government has revised relevant regulations supporting the area direct payment of 700,000 won ($608) on average per hectare to eligible farmers who cultivate alternative crops in their paddy fields. The government also provides support of 3 million won ($2,600) per hectare for farmers cultivating alternative crops in their rice paddy fields in addition to the area direct payment. However, the deficiency direct payment is not payable to farmers participating in this program. In CY 2011, total rice paddy land converted to alternative crops reached 40,000 hectares. Yield Korea experienced severe cold weather spells during the early planting season followed by heavy rains during the growing season in the middle of August. However, favorable weather conditions since late August up to the initial crop survey have resulted in higher yields, up by 2.4 percent from last year. Direct government payments which encourage rice farmers to cultivate high yield varieties also helped maintain yield levels in spite of unfavorable weather conditions prior to the rice- filling stage. 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 c/ 854 494 4,216 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). c/ based on rice production survey conducted by KOSIS during September 15-21, 2011. The government subsidizes domestic rice production through two types of direct payments - an area payment, which is based on eligible paddy land that was registered from 1998 to 2000, and a price support payment. Total support payments were nearly 1.37 trillion Korean Won (US$1.19billion) last year. Additional information on these support payments is available in the May 2011 Grain and Feed Annual Report (KS1121) Korea: Direct Payment Program for Rice Income Compensation Year Area Payment (A) Deficiency Payment (B) Total Area Payment Total Production Payment Total (Billion (1,000 (Won/HA) (Billion (1,000 MT) (Won/Kg) (Billion Won) HA 1/ 2/) Won) 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 883 700,000 618.1 na na na na 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. Government Rice Purchase Program under the Public Rice Stockholding Program (PRSP) The government also purchases rice for price stabilization purposes. Under the Public Rice Stockholding Program (PRSP) for food security ( also known as the Public Storage System for Emergencies (PSSE)), the Korean government will purchase domestic paddy rice during the harvest season (October-December) at the average market price and sellit during the non- harvest periods at the prevailing domestic market price. . Between October and December 2011, the Korean government plans to purchase 340,000 MT (milled basis) of paddy rice representing 8 percent of the 2011 rice crop estimate. 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 4,216 340a/ 8.1 Source: Ministry of Food, Agriculture, Forestry & Fisheries (MIFAFF) a/ Plan Government and NACF?s Loan Programs The Korean government plans to provide loans for rice milling worth 1.2 trillion Korean Won (US$1.09 billion) with a special loan rate between 0 and 2 percent per annum this year. The National Agricultural Cooperative Federation (NACF), the national farmers group, also continues providing loans to rice farmers/millers worth 1.4 trillion Korean Won (US$1.27 billion). The main goal of loan program is to encourage rice millers to purchase more rice from farmers minimizing harvest pressures in the rice market. Rice farmers are expected to sell approximately 2 million metric tons during the harvest season including 340,000 MT of government direct purchasing under the PRSP program and 1.6 million metric tons of rice under the loan programs. Most of the rice purchases under the loan programs provided by the Korean government and the NACF will be released into the rice retail market through NACF?s Rice Processing Complexes (RPCs) and independent RPCs throughout the 2011/12 rice marketing year. Korean rice farmers are expecting the purchasing measures to help prop up prices during the rice harvest season. 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 4,216 1,400b/ 33 Source: Ministry of Food, Agriculture, Forestry & Fisheries (MIFAFF) a/ exclude independent RPC purchases b/ plan CONSUMPTION MY 2011/12 consumption is forecast to decrease to 4.5 million tons, down 13 percent from the 2010/2011 marketing year. 85 percent of the 2010 production is estimated to be consumed as table rice. Per capita table rice consumption is declining 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. The Korean government forecasts a fall in per capita table rice consumption to a record low of 70.4 Kg in MY 2011/12. In MY 2011/12, Korea?s food processing industry is forecast to use about 550,000 tons of rice (milled). Nearly 73 percent of processing rice is projected to be used for food processing and 27 percent being used for liquor processing. The future use of rice by the food processing is expected to grow gradually in the long-run as the government continues its efforts to globalize Korean cuisine, which includes rice cakes and other rice based snacks. The country?s rice surplus has also pressed the government to support the rice processing industry through government research and development (R &D) programs to develop rice based recipes. Additional support is being provided to rice processors to help set up processing facilities. The government has set an annual budget for R&D at one billion Korean won and floated 60 billion Korean won for a facility funding program in CY 2011. Furthermore, the government also continues its ?R-10 Korea? campaign, which encourages consumers to switch from wheat to rice-based products. In MY 2010/11, rice consumption increased to 5.2 million tons, up 10 percent from the previous because the Korean government auctioned off about 646,000 metric tons of government-held stocks to the domestic rice market from March through early September 2011. The purpose of the government selling off surplus was to stabilize a bullish domestic rice market. However, the sell off of stocks led experts to question the government?s 2010 rice production figures indicating that actual 2010 rice production should be far lower than 4.3 million tons. The difference is reflected in the Loss Account in the Rice Utilization Pattern table shown below. Domestic Rice Processing Industry Expected to Grow: The Korea Rice Foodstuffs Association (KFRA) is the main client for imported processing rice, most of which is used for rice cakes, noodles and rice flour. The Korea Alcohol & Liquor Industry Association (KALIA) also uses both domestic and imported rice for liquor production. The Korean government regularly sells domestic rice that is too old for human consumption and food processing purposes to KALIA. The government selling price for old domestic rice for liquor processing is Korean won 229/kg (US$0.21) which is equivalent to the average arrival price of imported Tapioca chips, a major raw material for liquor processing. In CY 2011, MIFAFF sold imported rice to KFRA members at 705 Korean Won/kg (US$ 0.64) for short grain rice, 685 (US$0.62) for medium grain rice, and 613.50 (US$0.56) for long grain rice (on a milled basis) respectively. The above referenced prices are about 65to 80 percent of the purchase prices of imported rice. The price of imported rice is set each year and is benchmarked against the price of wheat flour (970 w/kg=US$0.88), which is considered a close substitute. In contrast, the prices of domestic processing rice is determined by the crop year; 355 Korean Won/Kg (US$0.32) for 2006 crop, 920 (US$0.84) for 2007 crop, 1,473 (US$1.34) for 2008 crop, 1,657 (US$1.51) for 2009 crop and 1,841 (US$1.67) for 2010 crop, respectively. The differential pricing has made imported processing rice an attractive option to food processors, especially over the last couple years in light of record high wheat flour prices. (Applicable foreign exchange rate at Korean won 1,100/US$ on average for CY 2011) 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 3,642 3,563 Processing 366 554 671 550 (for food) (278) (347) (318) (400) (for liquor) ( 88) (207) (353) (150) Seed 40 39 37 36 Other and Loss 702 438 815 358 Total Demand 4,791 4,701 5,165 4,507 Per Capita Table Rice Consumption (Kg) 74.0 72.8 71.8 70.4 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 132 180 220 300 KALIA 88 207 353 150 Oth c/ers 189 167 98 100 Total 366 554 671 550 Source: Ministry of Food, Agriculture, Forestry & Fisheries (MIFAFF) a/ MIFAFF preliminary b/ FAS/Seoul 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 2011a/ 110,000 110,000 220,000 2012a/ na na 300,000 Source: Korea Rice Foodstuffs Association (KRFA) a/ KRFA?s forecast Korea: 2010 Rice Supply for Processing Purposes to KRFA Members (Metric Ton, Milled) Item Quantity Ratio (%) Cake/Noodle 78,586 44 Confectionary 7,911 4 Flour 31,117 17 Alcohol 44,906 25 Sticky Sweet 9,704 5 Traditional Food 1,554 1 Others 5,930 3 Total 179,708 100 Source: Korea Rice Foodstuffs Association (KRFA) STOCKS MY 2011/12 ending stocks are forecast to stay around 1.1 million tons, up 15 percent from the estimated level of the current marketing year, due mainly to a higher ?other than loss? category returning to a normal level at 358,000 metric tons. MY 2010/11 ending stocks are estimated at 964,000 metric tons, down 36 percent from the previous year because the government had released approximately 646,000 metric tons of government-held stocks to the domestic rice market. The market was bullish from March to early September 2011. Ending stocks of imported rice are expected to stay above the previous levels in the coming marketing year because additional amount of old domestic rice is expected to be used for liquor processing. 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 702 694 996 1,508 964 1,104 Government Stock 596 608 805 818 840 1,000 -Domestic Rice 456 510 698 636 680e/ 800 -Imported Rice 140 98 107 182 160 200 NACF d/ 0 0 151 616 0 0 Civil Stock 106 86 40 74 124 104 Source: FAS/Seoul Estimate based on MIFAFF data. a/ MIFAFF Preliminary b/ FAS/Seoul Preliminary c/ FAS/Seoul forecast d/ NACF purchase under the government loan program. e/ composed of 30,000 metric tons of 2010 crop,370,000 metric tons of 2009 crop and 280,000 metric tons of 2008 crop TRADE Korea imports rice as part of its Minimum Market Access (MMA) rice agreement. Under the agreement import volumes will continue to grow according to the predefined MMA schedule until the end of 2014 after which imports will be subject to a tariff equivalent (TE). Imports: Under the MMA, the United States, China, Thailand and Australia were each allocated fixed country specific quotas (CSQs). There are also several global quota allocations, which are generally limited to different brown rice, short, medium, and long varieties. While the intent of the MMA agreement was that these import commitments would be completed within the corresponding calendar year, the MMA tendering process has historically started in the second half of the year with deliveries scheduled through the third quarter of the coming year. The 2011 MMA tendering process is currently underway with deliveries scheduled up until October 2012 for some portion of Chinese table rice because of sluggish auctions. However, U.S. table rice is scheduled to be delivered from December 2011 through June 2012 in light of improving market demand. MY 2011/12 rice imports are forecast at 350,000 metric tons, which roughly equals Korea?s import commitment for calendar year 2011. The import estimate for U.S. rice for MY 2011/12 is 100,000 metric tons. This estimate could climb slightly higher depending on the redistribution of the Australian CSQ under the global quota. Australia has not filled its CSQ for the fifth straight year due to limited exportable supplies and is likely to notify Korea of its inability to export rice under the 2011 MMA. 2011 MMA Tendering Process As of October 25, aT the state trading arm of the Korean government has purchased 256,736 metric tons (milled), about 74 percent of the entire the 2011 MMA import commitments with the remainder still being processed. The United States was awarded 96,901 metric tons (milled) comprised of 76,031 metric tons (68,428 metric tons on milled basis) of brown medium grain rice at US$763-822 per metric ton CIP in container or bulk, 27,473 metric tons of milled medium grain rice for table purpose at US$ 751-866 per metric ton CIF in container and 1,000 metric tons of sweet rice for processing purpose at US$965.73 per metric ton CIF. This amount is 194 percent of the United States? baseline of 50,076 metric tons for its CSQ. Post expects the United States to sell up to 100,000 metric tons of medium grain (milled) to Korea under the 2011 MMA considering that the Australian CSQ is expected to be converted to the global quota. See tender results in Appendix for additional details. Korea: Value of U.S. Rice Sales to Korea, 2011 MMA (as of October 26, 2011) Contracts Milled rice(MT) Brown rice(MT) Arrival unit price Amount ($/MT) ($) 1 11,111 a/ 807.00 8,966,577 2 / 21,810 a 782.00 17,055,420 3 1,000 a/b/ 965.73 965,730 4 20,114 822.00 16,533,708 5 a/ 17,996 749.30 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 total 28,473 76,031 83,636,890 Source: Korea Agro-Fishery Corporation (aT), totaling 96,901MT on milled basis. a/ under the Global Quota b/ Sweet rice for processing purpose Korea: MMA Rice Allocations (MT, milled rice) Calendar Year Total Global Quota (MFN) 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 29,963 c/ 2007 266,270 70,072d/ 196,198 50,076 116,159 29,963 c/ 2008 286,617 90,419e/ 196,198 50 c/,076 116,159 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 347,658 151,460 h/ 196,198 50,076 116,159 29,963 c/ Source: Ministry of Food, Agriculture, Forestry & Fisheries (MIFAFF) and 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 under bad crop situation. 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 46,825MT; China 44,911MT; Thailand 20694 MT; and Vietnam 15,000MT; and Myanmar 15,000MT. Australia CSQ allocation that will be converted to MFN is still open yet. Korea: CSQ Table Rice Allocation (MT, Milled rice) Year USA China Thailand Australia Total 2005 5,504 12,767 3,293 993 22,557 % 24.4 56.6 14.6 4.4 100 2006 10,414 21,500 1,000 1,515 34,429 % 30.3 62.4 2.9 4.4 100 2007 14,193 29,626 2,000 2,109a/ 47,928 % 29.6 61.8 4.2 4.4 100 2008 18,989 39,292 2,000 2,774b/ 63,055 % 30.1 62.3 3.2 4.4 100 2009 23,760 49,462 3,078 c/ 3,510 b/ 79,810 % 29.8 62.0 3.8 4.4 100 2010 26,219 65,556 2,100 c/ 4,318a/ 98,193 % 26.7 66.8 2.1 4.4 100 2011 plan 27,473 67,135 5,100 c/ 4,589 104,297 % 26.3 64.4 4.9 4.4 100 Source: MIFAFF a/ USA won the Australian CSQ allocation converted to MFN due to Australia?s inability to fulfill quota due to drought conditions. b/ China won the Australian CSQ allocation converted to MFN due to Australia?s inability to fulfill quota due to drought conditions. c/ included 90MT of Jasmin rice Korea: Processing Rice Allocation Based on CSQ (MT, Milled rice) Year USA China Thailand Australia Total 2005 44,572 103,392 26,670 8,037 182,671 % 24.4 56.6 14.6 4.4 100 2006 39,662 94,659 28,963 7,515 170,799 % 23.2 55.4 17 4.4 100 2007 35,883 86,533 27,963 6,921a/ 157,300 % 22.8 55.0 17.8 4.4 100 2008 31,087 76,867 27,963 6,256a/b/ 142,173 % 21.9 54.1 19.6 4.4 100 2009 26,316 66,697 26,885 5,520c/ 125,418 % 21.0 53.2 21.4 4.4 100 2010 23,857 50,603 27,863 4,712c/ 107,035 % 22.3 47.3 26.0 4.4 100 2011plan 22,603 49,024 24,863 4,441 100,931 % 22.4 48.6 24.6 4.4 100 Source: MIFAFF a/ Thailand won the Australian CSQ allocation converted to MFN due Australia?s inability to fulfill quota due to drought conditions. b/ broken rice c/ Pakistan won the Australian CSQ allocation converted to MFN due to Australia?s inability to fulfill quota due to drought conditions. Korea: Global Quota Allocation per Rice Variety (MT, Milled rice) Year Medium Grain Short Grain Long Grain Optional Variety Total Unbroken Broken Sweet 2005 6,104 11,192 3,052 na na na 20,347 % 30 55 15 na na na 100 2006 13,022 21,568 6,104 na na na 40,694 % 32 53 15 na na na 100 2007 19,534 32,351 9,156 na na a 61,041 % 32.0 53 15 na na na 100 2008 19,534 32,352 9,156 / 20,347 a na na 81,389 % 24.0 39.8 11.2 25.0 na na 100 2009 31,270 40,119 9,000 na 20,347 b/ 1,000 c/ 101,736 % 30.7 39.4 8.9 na 20.0 1.0 100 2010 33,325 42,411 15,347 5,000 d/ 25,000 b/ 1,000 c/ 122,083 % 27.3 34.7 12.6 4.1 20.5 0.8 100 2011 35,825 44,911 c/ 20,694 10,000 d/ 30,000 b/ 1,000 142,430 plan % 25.2 31.5 14.5 7 21.1 0.7 100 Source: MIFAFF 1/ MIFAFF introduced an optional variety allocation in the 2008 MMA in order to minimize outlays due to rising international grain prices. a/ Optional Variety among medium, short and long grain b/ Broken rice with an optional variety c/ Sweet rice with an optional variety d/ Optional Variety between medium and short grain Auctions: aT manages the purchase and sale of imported rice through a public auction system. In contrast, MIFAFF sells processing rice to end-users throughout the year. The 2011 MMA shipments started arriving in late 2011 and will continue till the end of October 2012. Approximately 104,297 MT of table rice will be delivered over this period. In early April 2011, aT kicked off table rice auctions for Thai rice and Chinese rice. The auctions for U.S. rice started at the end April due to late arrivals. The progress of early auctions was slow. However, a bullish domestic rice market caused by lower supply of local rice in tandem with falling selling floor prices have helped sell imported table The aT dropped its selling floor prices three times from 1,350 won ($1.23) per Kg to 800 won ($0.73) for U.S. #1 medium grain rice, while Chinese #1 short grain price declined four times from 1,320 won ($1.20) per Kg to 650 won ($0.59). The price for Thai #1 long grain was also reduced to 480 won ($0.44) per Kg from 950 won ($0.86) three times. The aT is expected to sell the total amount of U.S. imported table rice by late November 2011 considering ongoing U.S. #3 rice selling auctions. Korea: Status of Rice Auction for Table Rice under 2010 CSQ (Unit: metric tons, milled basis, as of October 26, 2011) C USDA Rate of ommodity Gr d Off Balance ade Total Table Rice C ctioneSQ Au Auctioned Off (%) U. #1 27,915 27,890 25 99.9 S. Medium Grain #3 2,622 0 2,622 0 C #1 39,334 20,788 18,546 53 hinese Short Grain #3 26,222 0 26,222 0 Thai Long Grain #1 2,100 2,100 0 100 Total 98,193 50,778 47,415 52 Source: Korea Agro-Fishery Trade Corporation (aT) Korea: Status of Rice Auction for Table Rice under 2009 CSQ (Unit: metric tons, milled basis, as of March 24, 2011) C A Rate of omm USDodity Gr ioned Off Balance ade Total Table Rice CSQ Auct Auctioned Off (%) U. 5 429 a/ 98 S. Medium #1 21,384 20,95 Grain #3 2,376 2,373 3 100 C #1 29,682 18,833 b/ 10,849 63 hinese Short Grain #3 19,780 639 19 b/,141 3 Chinese Medium Grain #1 3,510 197 3 b/,313 6 Thai Long Grain #1 3,078 1,578 1,500 b/ 51 Total 79,810 44,575 35,235 56 Source: Korea Agro-Fishery Trade Corporation (aT) a/ Of them, 418 MT was damaged quantities. b/ diverted to the alcohol processing purpose at Korean won 285 per Kg (US$0.25) from late April through early August 2011. 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 2006 April-September (2005 MMA) 1,138 991 1,274 1,133 555 1,861 1,812 2007 March-August (2006 MMA) 1,363 1,211 1,357 1,303 953 1,961 1,916 2008 February-August 1,542 1,510 1,487 1,558 1,132 2,034 1,983 (2007 MMA) 2009 February-May 1,125 2010 (2008 MMA) 1,160 994 (1,100) na 1,329 1,913 1,845 2010 February-March 2011 914 (2009 MMA) 970 881 (850) 893 672 1,692 1,635 2011 April-October (2010 MMA) 909 a/ 735 a/ 518 1,959 1,886 Source: Korea Agro-Fishery Trade Corporation (aT) a/ Plans to start auctioning off soon after completion of selling auctions for #1 grade rice. Exports: Korea exports negligible amount of rice. For the first nine months in CY 2011, Korea exported 2,850 MT of milled rice to 32 countries worldwide. Australia imported 1,141 MT or 40 percent of total Korean rice exports while the United State imported 138 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$1,000) 2005 18 89 5 5 2006 9 40 0.2 1 2007 507 1,322 333 876 2008 356 829 115 285 2009 4,183 7,300 443 777 2010 3,765 6,394 272 587 2011(Jan.-Sep.) 2,850 4,455 138 210 Tariffication: The Korean government has reportedly decided not to pursue rice tariffication discussions for this year as had been proposed by a government-sponsored rice sub-committee. Rice PSD Rice, Milled Korea, R 2009/2010 2010/2011 2011/2012 epublic of Market Year Begin: Nov Market Year Begin: Nov Market Year Begin: Nov 2009 2010 2011 USDA New USDA New USDA New O fficial Post Official Post Official Post Area Harvested 924 924 892 892 855 854 (1000 HA) Beginning Stocks 996 996 1,453 1,508 1,278 964 (1000 MT) Milled Production 4,916 4,916 4,295 4,295 4,240 4,300 (1000 MT) Rough Production 6,502 6,502 5,804 5,804 5,730 5,811 (1000 MT) Milling Rate (.9999) 7,561 7,561 7,400 7,400 7,400 7,400 (1000 MT) MY Imports 310 306 330 330 350 350 (1000 MT) TY Imports 320 320 330 330 350 350 (1000 MT) TY Imp. from U.S. 94 95 0 95 0 100 (1000 MT) Total Supply 6,222 6,218 6,078 6,133 5,868 5,614 (1000 MT) MY Exports 4 9 3 4 3 3 (1000 MT) TY Exports 4 9 3 4 3 30 (1000 MT) Consumption and Residual 4,765 4,701 4,797 5,165 4,800 4,507 (1000 MT) Ending Stocks 1,453 1,508 1,278 964 1,065 1,104 (1000 MT) Total Distribution 6,222 6,218 6,078 6,133 5,868 5,614 (1000 MT) Yield (Rough) 7. 7.0368 7. 6.5067 7. 6.8044 (MT/HA) Appendix Korea: 2011 MMA Rice Tender Schedule and Results (Milled Rice, Metric Ton, as of 10/26/2011) No. Bidding Specs Quantity, Delivery Origin Milling Quota Date (contracted date) milled (disport) (Awarded Price: US$/MT) Type Type (brown) 1 6/21/11 SG #3 or MG #3 10,000 By 10/31/11 807.00CIP from SM/ADM Brown Global Optional (11,111) Busan in container or USA (6/27/11) Gunsan in bulk 19,629 By 10/31/11 782.00CIP from SM/ADM MG #3 (21,810) Busan in container or USA Masan in bulk (6/27/11) LG #3 4,500 By 9/30/10 579.79CIP from LG/Chaiyaporn (6/27/11) (5,000) Busan in container or Thailand Masan in bulk LG #3 12,210 By 9/30/10 589.68CIP from LG/Chaiyaporn CSQ (6/27/11) (13,567) Gunsan in bulk Thailand 4,441 By 9/31/11 Australia MG #3 (4,934) Busan in container or Masan in bulk 2 6/28/11 Broken Rice 5,000 By 9/30/2011 490.00 CIP from Fine Marine/ Milled Global US #4 Brewer?s Ulsan in bulk Vinafood1 Milled Rice Vietnam (7/4/11) LG#3 7,194 By 10/31/10 Ch558.23 CIP from LG/ Brown Global (7/4/11) (7,993) Busan in container or Chaiyaporn Masan in bulk Thailand LG#3 9,000 By 10/31/10 567.00 CIP from Fine Marine/ (7/4/11) (10,000) Mokpo in bulk Asian Golden Rice Thailand SG #3 or MG #3 1000 By 11/31/2011 965.73 CIF from Shin- Milled Glutinous Busan or Inchon Song/American Commodity Milled Rice Company Optional USA (7/4/11) 3 7/14/11 Broken Rice 10,000 By 11/31/2011 504.78 CIP from Fine Marine/ Milled Global US #4 Brewer?s Inchon Vinafood1 Milled Rice Vietnam (7/20/11) SG #3 (7/20/11) 17,911 By 12/31/2011 872.00 CIP from Brown (19,901) Gunsan (9,901) and Daewoo/COFCO Masan (10,000) China 4 8/11/11 SG #3 (8/19/11) 27,000 By 12/31/2011 875.50 CIP from Fine Marine Brown Global (30,000) Donghae with 15,000 /COFCO in bulk China By 11/30/2011 Ulsan with 15,000 in bulk SG #3 18,000 By 11/30/2011 870.00 CIP from Shin-Song/Jilin CSQ (8/17/11) (20,000) Inchon Grain Corp. China MG#1/#3 4,598 By 12/31/2011 Australia Milled Busan 5 8/18/11 MG#3 18,103 By 12/31/2011 822.00CIP from SM/ADM Brown CSQ (8/25/11) (20,114) Gunsan USA SG #3 13,024 By 12/31/2011 879.00 CIP from (8/25/11) (14,471) Inchon Daewoo/COFCO China Broken Rice 15,000 By 12/31/2011 515.00 CIP from Shin- Milled Global US #4 Brewer?s Inchon Song/xxxxx Milled Rice Myanmar (8/25/11) SG #3 13,500 By 12/31/2011 879.00 CIP from Brown CSQ (8/25/11) (15,000) Mokpo Daewoo/COFCO China LG#3 12,653 By 11/30/2011 669.47 CIP from Fine Marine/ (8/25/11) (14,059) Donghae Asian Golden Rice Thailand LG#1 2,010 By 3/31/2012 Thailand Milled Busan LG#3 3,000 By 10/31/2012 674.46 CIF from (8/25/11) Busan Hyolim/Chimeng Thailand Aroma 90 By 3/31/2012 1,207.67 CIF from LG#1 Busan Hyolim/Chimeng (8/25/11) Thailand 6 8/31/11 MG#3 16,196 By 12/31/2011 749.30 CIP from Brown Global (9/5/11) (17,996) Gwangyang D&B/Sun Foods USA MG#1 14,726 By 2/29/2011 866. 00 CIF from SM/ADM Milled CSQ (9/5/11) Busan USA SG#3 4,500 By 12/30/2011 875.00 CIP from Fine Marine Brown 3rd bid (5,000) Inchon or Pyengtaek /COFCO (9/5/11) China 4,500 By 12/30/2011 763.00CIP from SM/ADM MG#3 (5,000) Inchon or Busan USA 3rd bid (9/5/11) 7 10/18/11 MG#1 10,000 By 6/30/2012 799.99 CIF from Shin- Milled CSQ (10/25/11) Busan Song/American Commodity Company USA MG#3 2,747 By 6/30/2012 751.16 CIF from GS Global/Sun (10/25/11) Busan Valley USA Source: Korea Agro-Fishery Trade Corporation (aT) Note: Milling rate for milled rice is applicable at 90 percent of brown rice, and vice versa. LG denotes long grain, SG short grain and MG medium grain, respectively. CIP: Carriage and insurance Paid to?Commodity + Ocean Freight + Insurance (about 0.33% of CNF) + Unloading Charge (about US$20/MT) + Customs Clearance Fee (about one million Korean Won) CFR: Cost and Freight? Commodity + Ocean Freight CIF: Cost, Freight and Insurance U.S. Table Rice Delivery Schedule Based on Tender Invitations Quantity (MT), milled basis Due Date of Customs Clearance 6,000 By December 2011 4,000 By January 2012 4,726 By February 2012 4,000 By April 2012 4,000 By May 2012 2,000 By June 2012 2,747 (#3) By June 2012 27,473 Total Korea: Farm Gate Price Index of Non-Glutinous Rice (2005=100) Year and Months Price Index 2001 108.8 2002 106.0 2003 110.4 2004 110.8 2005 100.0 2006 95.8 2007 98.7 2008 104.0 2009 98.3 2010 88.5 Quarterly 2009 2010 First 105.4 91.2 Second 103.5 87.3 Third 97.6 85.3 Fourth 92.9 89.4 Source: Statistics Korea (KOSTAT) Korea: Monthly Wholesale Price of Milled Rice (High Quality) Month\Year CY 2009 CY 2010 CY 2011 Won/Kg US$/Kg Won/Kg US$/Kg Won/Kg US$/Kg January 2,060 1.53 1,710 1.50 1,764 1.58 February 2,051 1.43 1,710 1.48 1,794 1.60 March 2,048 1.40 1,693 1.49 1,873 1.67 April 2,040 1.53 1,677 1.50 1,938 1.79 May 2,018 1.61 1,639 1.41 1,950 1.08 June 1,951 1.55 1,630 1.34 1,950 1.81 July 1,917 1.52 1,630 1.35 1,950 1.84 August 1,867 1.51 1,619 1.37 1,950 1.82 September 1,830 1.51 1,605 1.38 1,950 1.74 October 1,756 1.50 1,605 1.43 2,022 1.74 November 1,711 1.47 1,710 1.52 Na Na December 1,710 1.47 1,740 1.52 Na Na Average 1,913 1.50 1,665 1.44 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 2009 CY 2010 CY 2011 Won/Kg US$/Kg Won/Kg US$/Kg Won/Kg US$/Kg January 2,302 1.71 2,101 1.84 2,064 1.84 February 2,299 1.61 2,090 1.81 2,098 1.87 March 2,298 1.58 2,080 1.83 2,138 1.91 April 2,287 1.72 2,102 1.88 2,217 2.04 May 2,281 1.82 2,086 1.80 2,235 2.06 June 2,255 1.79 2,057 1.70 2,254 2.09 July 2,221 1.76 2,052 1.70 2,234 2.11 August 2,204 1.78 2,054 1.74 2,203 2.05 September 2,201 1.81 2,031 1.74 2,201 1.97 October 2,188 1.87 2,039 1.82 2,243 1.93 November 2,139 1.84 2,017 1.79 Na Na December 2,110 1.81 2,020 1.76 Na Na Average 2,093 1.64 2,061 1.78 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 c/,076 116,159 29,963 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 29,963 c/ 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 347,658 142,430 205,228 50,076 116,159 29,963 9,030 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 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 Year MMA U.S.A. China Thailand Australia Vietnam Pakistan India Quota 1995 51,307 0 0 0 0 0 0 51,307 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 Total 2,813,068 606,674 1,640,682 419,835 29,298 9,000 10,232 51,307 Source: FAS/Seoul a/ Thai suppliers delivered only 8,470 MT of the total contracted amount Korea: Foreign Exchange Rate (Korean Won against US$) Month 2010 2011 January 1,139 1,119 February 1,155 1,119 March 1,136 1,120 April 1,116 1,085 May 1,161 1,083 June 1,212 1,080 July 1,205 1,058 August 1,179 1,073 September 1,164 1,120 October 1,123 1,163a/ November 1,128 na December 1,146 na Average 1,156 1,099 Source: Global Financial Service a/ an average for October 1-24, 2011
Posted: 27 November 2011

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