WASHINGTON, D.C., U.S. — South Korea’s soybean consumption in market year 2016-17 is forecast unchanged from the current marketing year at 1.42 million tonnes, while trade is also expected to remain stable at 1.3 million tonnes of which soybeans for crushing stay at 1 million tonnes, the U.S. Department of Agriculture’s (USDA) Foreign Agricultural Service said in a March 3 report. Imports of food grade soybeans in market year 2016-17 are forecast around 290,000 tonnes with the U.S. expected to retain 70% to 80% market share. Soybeans account for approximately 67% of Korea’s total oilseed production.

The Korean Rural Economic Institute (KREI) conducted a nationwide planting intention survey of 784 soybean farmers, Dec. 24-31, 2015. According to the survey results, market year 2016-17 soybean area is forecast to increase to 67,880 hectares, up 11,214 hectares (20%) from the previous year’s harvested area. This increase is due to domestic soybean prices that have been bullishly affected by lower production last year. Using the KREI survey results as a benchmark, the report is forecasting soybean production for market year 2016-17 to increase by 16% from the previous year, on a five-year average yield.

In market year 2015-16, soybean production decreased to 103,504 tonnes, down 35,736 tonnes (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.

In 2016, South Korean government purchases of 2015 soybean crop were approximately 11,200 tonnes, reaching about 56% of purchasing target, as farmers opted to sell their beans through both the government purchase channel and commercial markets because of recent bullish commercial trends in the soybean wholesale market since fall 2015. The bullish commercial market prices caused by smaller production than previous years induced farmers to sell their soybeans more to the commercial markets than the governmental purchase program, the report said.

Soybeans account for the majority of oilseed consumption. Consumption in market year 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. 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.

Soybeans account for more than 90% of total oilseed imports, of which approximately 80% are used for crushing in the latest marketing year. Due to constant demand for imported soybeans, market year 2016-17 soybean imports are forecast to remain unchanged from the current marketing year estimate of 1.3 million tonnes. Market year 2015-16 soybean imports are expected to increase 4% from the previous year due to a statistical adjustment of food grade soybeans imports in market year 2014-15. In market year 2014-15, total soybean imports were 1.12 million tonnes on customs cleared basis, consisting of 1.005 million tonnes for crushing purpose and 115,281 tonnes for food processing purpose.