The USDA’s Economic Research Service characterizes South Korea’s agriculture on its website. “Agriculture, in contrast to much of the rest of the economy, has little export focus and receives heavy protection from the government,” it said. “There is not enough cropland and pasture to support both direct human food use and animal feeding. Since the 1960s, South Korea has been a large net importer of agricultural products.
“South Korea is likely to import greater amounts of agricultural products in the future because of domestic market forces and market-access measures negotiated in bilateral and multilateral agreements. New free trade agreements with the European Union and the United States in 2011 and 2012 included lower bilateral tariffs on South Korea’s agricultural imports.”
In its Grain Market Report, the International Grains Council (IGC) puts South Korea’s total grains imports at 14.4 million tonnes in 2015-16, up from 14.1 million the year before. The figure includes 4.6 million tonnes of wheat, up from 4 million, and 9.7 million tonnes of maize, down from 10.1 million tonnes the year before. South Korea is also set to import an unchanged 500,000 tonnes of rice.
The IGC puts South Korea’s imports of soybeans at 1.4 million tonnes in 2015-16, against 1.3 million in 2014-15. The country’s soymeal imports are put at 1.9 million tonnes, up from 1.8 million the year before.
According to the IGC, South Korea will import 60,000 tonnes of wheat flour in 2015-16, up from 59,000 the year before.
South Korea’s production is too small to be quoted in the IGC’s report. An annual report from the attaché, forecast 2015-16 wheat production at 24,900 tonnes, down 6% on decreased planting area.
“The upland direct payment program doesn’t increase wheat planting area because wheat requires a longer growing period compared to other winter crops such as barley and forage crops, hindering timely rice transplantation as a double crop after wheat cultivation,” the attaché explained. “The Korean government has made upland direct payment of 400,000 Korean Won ($380) per hectare to farmers who have grown winter crops in their paddy fields since 2014.”
The attaché foresaw wheat consumption in 2015-16 at 3.84 million tonnes, an increase of nearly 120,000 tonnes from the previous marketing year due to an increase in the available supply of competitively-priced feed wheat, with milling wheat consumption remaining stable. 2015-16 milling wheat consumption, including flour and pasta trade on a wheat basis, is forecast at 2.34 million tonnes, which the attaché called a slight increase from the current marketing year.
The attaché put 2015-16 wheat imports at 4 million tonnes, with 2.5 million for milling, which included flour and pasta imports on a flour equivalent basis and 1.5 million tonnes for feed. “The import estimate hinges to a large extent on the continued availability of feed wheat with milling wheat remaining steady,” the report said.
The website of the Korea Flour Millers Industry Association (KOFMIA) names eight large milling companies. They are Deahan Flour Mills, DongA Won Corporation, Daesan Flour Mills, Samyang Corporation, Korea Flour Mills (which owns DongA Won), CJ CheilJedang, Samhwa Flour Mills and Young Nam Flour Mills.
Maize production is small, with the 2015-16 crop put at 77,000 tonnes in the attaché’s annual report. In the 2015-16 marketing year, maize consumption is forecast around 10 million tonnes, down 100,000 from the previous year’s record. “Cattle farmers are expected to reduce their inventories due to a decreasing supply of calves until calendar year 2017,” the attaché said. “Feed corn consumption is projected to decrease to 7.9 million tonnes, down 100,000 tonnes from the estimated current marketing year level in large part due to an anticipated decrease in compound feed production for the cattle sector.
“Food, seed and industrial (FSI) corn consumption is expected to stay around 2.1 million tonnes to meet a constant demand for high fructose corn syrup (HFCS) and corn products from Korean food industries. Market year 2014-15 corn consumption remains unchanged at 10.1 million tonnes from the previous forecast, which is composed of 8 million tonnes for feed purpose and 2.1 million tonnes for FSI purpose. Greater demand for feed corn will offset the decrease of feed grade wheat, which is less competitive than corn in the global market.”
Maize compound feed production is forecast unchanged at around 18.8 million tonnes, “due to strong growth in swine inventory which offsets the reduction in cattle, while poultry numbers stay strong and steady,” according to the attaché. “Feed corn is expected to be the major ingredient used in compound feed, accounting for more than 40% of total ingredients.”
Food Corn processors continue using GM corn and non-biotech IP corn as well as traditional corn to produce corn starch, HFCS and corn flour, the attaché said.
“GM corn imported from the United States, South American countries and Ukraine has been used for starch and HFCS. Non-biotech IP corn imported from the United States and Brazil and traditional corn imported from Hungary, Serbia, Romania and South Africa have been used for corn starch, HFCS and corn flour,” it said.
“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,” the report said. “Many food processing companies have been reluctant to use ingredients sourced from biotech corn. Some food processing companies utilizing corn starch products have sourced ingredients imported from China since these items are reportedly derived from non-biotech corn.”
Forecasts for a rise in cattle numbers while the number of swine falls mean that total 2015-16 maize imports are predicted to rise by 200,000 tonnes on the year to 9.8 million, made up of 7.8 million for feed and 2 million for food processing. The U.S. is expected to account for about 41% of total South Korean maize exports.
According to the attaché, in 2015-16 soybean production decreased to 103,504 tonnes, down 35,736 tonnes, or 25%, from the previous year “due mainly to declining soybean acreage coupled with lower yield, caused by droughts in the middle part of the Korean peninsula.”
Soybeans account for the majority of oilseed consumption, the attaché said.
“Consumption in 2016-17 is forecast to remain unchanged from the current marketing year at 1.42 million tonnes amid stagnant domestic production, of which 1 million tonnes will go for crushing and 370,000 tonnes for food processing use in items like tofu, soymilk and soy sauce with others for feed, seed and waste remaining constant,” it said.
“All domestic production goes to food use. Future growth in overall soybean consumption is expected to be minimal. Consumption for crushing will be constant at the level of one million tonnes if CJ Corporation, a leading Korean soybean crusher, continues soybean crushing in their flexible crushing facilities, which are convertible by the comparison of crushing margins between rapeseed and soybeans. In Market year 2015-16, soybean consumption is expected to stay around 1.42 million tonnes due to less consumption of food soybeans caused by declining domestic soybean production, consisting of 1 million tonnes for crushing, 370,000 tonnes for food and 50,000 tonnes for others, respectively.”
South Korea imports GM grains, despite consumer misgivings about the technology.
“Korea is heavily dependent on imported food (except rice) and feed grains,” the attache explained in a report on biotech in the country. “Only a limited number of food products are made from biotech ingredients due to negative consumer sentiment towards biotechnology, whereas the bulk of livestock feed is made from biotech corn and soybean meal.
“Typically the United States is the top grain exporter to Korea but 2013 was an exception as supplies were very limited following the severe drought in the United States in 2012. The United States regained its status as the top supplier to Korea in 2014 and 2015.”
Population: 49,115,196 (July 2015 est.)
Religions: Christian 31.6% (Protestant 24%, Roman Catholic 7.6%), Buddhist 24.2%, other or unknown 0.9%, none 43.3% (2010 survey).
Location: Eastern Asia, southern half of the Korean Peninsula bordering the Sea of Japan and the Yellow Sea.
Government: Republic. Chief of state: President Park Geun-hye (since Feb. 25, 2013); head of government: Prime Minister Hwang Kyo-ahn (since June 18, 2015).
Economy: South Korea over the past four decades has demonstrated incredible economic growth and global integration to become a high-tech industrialized economy. In the 1960s, GDP per capita was comparable with levels in the poorer countries of Africa and Asia. In 2004, South Korea joined the trillion-dollar club of world economies. A system of close government and business ties, including directed credit and import restrictions, initially made this success possible. The government promoted the import of raw materials and technology at the expense of consumer goods, and encouraged savings and investment over consumption. The Asian financial crisis of 1997-98 exposed longstanding weaknesses in South Korea’s development model, including high debt/equity ratios and massive short-term foreign borrowing. GDP plunged by 7% in 1998, and then recovered by 9% in 1999-2000. South Korea adopted numerous economic reforms following the crisis, including greater openness to foreign investment and imports. South Korea’s export-focused economy was hit hard by the 2008 global economic downturn, but quickly rebounded, reaching over 6% growth in 2010. The U.S.-Korea Free Trade Agreement was ratified by both governments in 2011 and went into effect in March 2012. Between 2012 and 2015, the economy experienced slow growth – 2%-3% per year – due to sluggish domestic consumption and investment.
GDP per capita: $36,700 (2015 est.); inflation: 0.7% (2015 est.); unemployment: 3.5% (2015 est.).
Currency: South Korean won (KRW); 1,159 won equal 1 U.S. dollar (March 18, 2016).
Exports: $535.5 billion (2015 est.): semiconductors, petrochemicals, automobile/auto parts, ships, wireless communication equipment, flat display displays, steel, electronics, plastics, computers.
Imports: $430.8 billion (2015 est.): crude oil/petroleum products, semiconductors, natural gas, coal, steel, computers, wireless communication equipment, automobiles, fine chemical, textiles.
Major crops/agricultural products: Rice, root crops, barley, vegetables, fruit; cattle, pigs, chickens, milk, eggs; fish.
Agriculture: 2.3% of GDP and 5.7% of the labor force.
Internet: Code: .kr; 44.9 million users.