Supply/Demand Basics
- Coarse grains demand of 12 MMT/ year – 98.2% imported: 78% for feed,16% corn milling, 6% alcohol and others.
- #3 import market of U.S. corn in MY 2017/2018
- #2 import market of U.S. DDGS in MY 2017/2018.
- Very limited barley and sorghum imports despite KORUS FTA.
- Livestock industry and compound feed market growing marginally.
Country Overview
- Population / growth: 51.4 million / 0.44%
- Urban % / growth: 81.5% / 0.3%
- GDP / growth: $2 trillion / 3.1%
- GDP per capita: $29,743
- Asia’s 4th and world’s 11th largest economy.
- Increasing possibility of food aid to North Korea and economic cooperation.
- Facing sluggish domestic demand, increased household debt, low youth unemployment, falling birth rates and aging population.
Trade and Market Share Issues
- Sophisticated price buyer; U.S. share is very volatile depending on commodity prices.
- Corn quality (Higher BCFM) has been a chronic issue that creates a slight premium on SAM origin.
- U.S. DDGS imports 5th consecutive new record, accounting 98% of the market.
- Reserved rice stock supply for animal feeds: 720 TMT (2018) → 440 TMT (2019).
- U.S. barley import has been very limited cause of weak price competitiveness and reduction of rice substitute consumption.
Policy Issues
- Implemented new MRLs for imported Grain for food use: PLS (Positive List System) from Jan. 1, 2019
- Strengthen pesticide residue test by the government for animal feeds.
- Biotech approval system is slow and unpredictable as ever: 30% of biotech review committee members are replaced biennially.
- GMO has become political issue: NGOs’ request to strengthen GMO labeling regulation.
- Currently, no fuel ethanol RFS, a possibility to adopt fuel ethanol RFS around 2022.
