Romania Challenges Brazil in the South Korean Corn Market
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FAS/Seoul forecasts MY 2023/24 (October 1-September 30) Corn production to remain flat at 91,000 MT. Corn production is minimal in Korea and accounts for less than one percent of total consumption. The Korean government will release official 2022 crop production data in April 2023. MY 2022/23 Corn production estimates were revised to 91,500 MT to the past three-year average, slightly increased from MY 2021/22 of 88,000 MT due to higher yields.
Total Corn consumption in MY 2023/24 will reach 11.4 MMT, based on the assumption that feed Corn consumption will recover to 9.3 MMT, while FSI consumption will be slightly reduced to 2.1 MMT. In MY 2022/23, total Corn consumption is expected to reach 11.6 MMT, an increase of 0.2 MMT from the previous year. The rapid rise in Corn prices led to decreased Corn feedstock usage for compound feed, offset by increased wheat imports due to relatively lower prices. From October 2022, the price of wheat surpassed Corn, so Corn consumption is expected to recover to the past three-year average trend.
Compound feed production is expected to remain consistent at 21 MMT annually, with feed Corn maintaining a 45 percent market share of the total output. In MY 2022/23, Corn consumption for feed is expected to reach 9.4 MMT, a 0.5 MMT increase from MY 2021/22, when the price was high enough for buyers to replace some portion with wheat.
Korean consumers have a high level of focus on health issues and trends. A ‘zero-sugar’ trend popular with Korean consumers has gradually reduced the consumption of sweeteners (including starch syrup) while increasing demand for substitute sweeteners such as stevia and allulose, which are marketed as healthier with reduced calories and diabetes control benefits. Assuming this long-term consumer trend continues as a baseline, FAS/Seoul forecasts MY 2023/24 Corn consumption for FSI will be slightly reduced to 2.1 MMT, down from 2.2 MMT of MY 2022/23 and 2.3 MMT of MY 2021/22.
Local Corn processors use Genetically Engineered (GE) Corn, non-biotech Identity Preserved (IP) Corn, and conventional Corn to produce Corn starch, high fructose Corn syrup (HFCS), and Corn flour. GE Corn is used for starch production for industrial purposes such as paper sizing and glue. Non-GE IP Corn and conventional (non-GE) Corn are used for Corn starch and Corn flour. The perceived public concern over biotechnology continues to influence imported processing Corn decisions, especially for Corn used in products intended for human consumption (such as HFCS and Corn oil). Many food processing companies are reluctant to use ingredients derived from biotech Corn to avoid these perceived public concerns.
South Korean Corn Imports
According to AgFlow data, South Korea imported 1.4 million tons of Corn in Q1 2023. The leading suppliers were Brazil (0.48 million tons), Romania (0.47 million tons), the US (0.3 million tons), and Argentina (0.1 million tons). FAS/Seoul forecasts that total MY 2023/24 Corn imports will reach 11.7 MMT, gradually recovering to the past three-year average from MY 2021/22 when feed Corn was dramatically reduced because of high prices. From October 2022, the import price of feed Corn was lower than feed wheat, so 2022/23 total Corn imports are expected to increase to 12.1 MMT from 11.5 MMT in MY 2021/22.
After the Russian invasion of Ukraine, the import price of Corn rapidly increased, particularly for July to October 2022 deliveries. Since the share of imports from Eastern Europe and Ukraine had fluctuated with supply uncertainty in recent years, Korean importers have been able to reliably switch to alternative origins even after the situation in Ukraine worsened. During the first five months of the current marketing year, imports of processing Corn remained flat at 0.9 MMT, while imports of feed Corn increased by 0.3 MMT from the previous year.
Other sources: USDA
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