South Korea: Food Wheat Consumption Is Growing Constantly
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FAS/Seoul forecasts Wheat production to reach 60,000 metric tons (MT) in MY 2023/24 (July 1-June 30), substantially increased from the previous year. Planting area for the 2023 crop is an estimated 12,000 hectares (ha), driven by producer incentives from the Korean government intended to increase domestic Wheat production. The MY 2022/23 Wheat production estimate is revised to 32,110 MT due to increased planting area. The Government’s official production data will be released around June 2023. In MY 2021/22, Wheat production reached 26,324 MT, up 54 percent from the previous year following recovery from unfavorable weather conditions in the previous year.
In December 2022, the Ministry of Agriculture, Food and Rural Affairs (MAFRA) released a long-term target to increase Korea’s food self-sufficiency rate from 44.4 percent in 2021 to 55.5 percent in 2027, with the target rate of Wheat for food use rising from 1.1 percent in 2021 to 7.9 percent in 2027. This plan includes Government aid for production, sales, and technical support to achieve a 5 percent (equivalent to 120,000 MT of production) self-sufficiency rate for Wheat by 2025. To help overcome a preference for imported Wheat among millers, the Government plans to incentivize milling companies to expand domestic Wheat consumption, including promoting ‘Korean Wheat Day’ to support school and group meals using domestic Wheat.
According to the FAS forecasts, total Wheat consumption in MY 2023/24 will reach 4.1 million metric tons (MMT), based on the assumption that feed Wheat consumption will be down to 1.7 MMT from its peak in MY 2021/22, while Food, Seed, and Industrial (FSI) consumption remains steady at 2.4 MMT. Feed Wheat consumption temporarily spiked in 2021/22 due to high feed corn prices. In January 2022, MAFRA announced the ‘Fostering Rice for Flour Industry’ initiative to overcome problems with stockpiled rice (accumulated through Government rice purchasing programs) and increase the grain self-sufficiency rate by reducing the usage of imported Wheat for milling. MAFRA aims to grow rice for flour production to 200,000 MT in 2027 from only 119 MT in 2021. The long-term target of 200,000 MT is based on replacing 10 percent of milling Wheat consumption.
Wheat consumption per capita is continuously increasing yearly, contrary to the decrease in rice consumption per capita. FAS/Seoul expects this trend towards Wheat will accelerate further over the next few years due to a growing preference for Western-style snacks and treats that can be consumed quickly on the go, such as bread and pastries, rather than traditional Korean rice-based meals. Bakery and noodle products, followed by confectionery products, are leading the overall increase in food Wheat consumption. Wheat consumption in MY 2022/23 and MY 2021/22 is revised to 4.0 MMT and 4.6 MMT, respectively. There was a temporary increase in feed Wheat imports and consumption in MY 2021/22 (driven by relative prices), but no further growth is expected in the coming years.
South Korean Wheat Trade
According to AgFlow data, South Korea imported 0.6 million tons of Wheat from Australia in Jan-Mar 2023, followed by the United States (0.3 million tons) and Canada (49,000 tons). Total MY 2023/24 Wheat imports are forecast at 4.3 MMT (including flour and pasta imports on a Wheat equivalent basis), down from the MY 2022/23 and MY 2021/22 based on the assumption that feed Wheat imports will move towards the previous three-year average. In MY 2022/23, the total Wheat import estimate is revised to 4.4 MMT, reduced mainly due to the sharp decrease in feed Wheat imports.
In MY 2021/22, Korea imported 5.1 MMT of total Wheat, including 2.3 MMT of feed Wheat, the highest level since MY 2011/12, offsetting the decrease in feed corn imports. The feed Wheat import estimate depends to a large extent on the availability and price of feed Wheat compared with feed corn since these are substitute products in the Korean feed market.
Other sources: USDA
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