South Korea Targets Soybean Self-Sufficiency at 43%
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South Korean Oilseeds and products market including Soybeans is mature with little annual change, reflecting stable consumer demand and stagnant domestic production. In marketing year (MY) 2023/24, however, the market will be impacted by the Government policy changes on both the production and consumption sides. FAS/Seoul forecasts that MY 2023/24 Korean Soybean production (for food use only) will rise due to the Government incentives intended to expand local Soybean production.
Total Soybean imports in MY 2023/24 are expected to remain flat, and Korea will remain dependent on imports for crushing. According to AgFlow data, South Korea imported 0.6 million tons of Soybeans from the United States in 2022, followed by Canada (66,000 tons), Brazil (60,000 tons), and Paraguay (40,000 tons).
In the oil meal market, total compound feed production is expected to remain flat, but the portion of Soybean meal will be reduced slightly due to protein content standard revisions. The Korean Government aims to continue increasing the biofuel blending mandate, with the industrial consumption of Soybean and palm oil gradually rising to offset decreases in food use.
Domestic Soybean production in MY 2023/24 (October 1-September 30) is forecasted to remain unchanged from the previous year at 0.13 MMT, based on a nationwide farm survey of Soybean planting intentions by the Korean Rural Economic Institute (KREI) in December 2022. In MY 2022/23, the Korean Government reported 0.13 MMT of Soybean production, up 17 percent from the previous year. This sharp increase was due to the Government incentives intended to expand local Soybean production.
Government incentives to increase soy acreage are closely tied to concerns over food self-sufficiency, including attempts to diversify acreage traditionally used for rice production. 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 Soybeans for food use rising from 23.7 percent in 2021 to 43.5 percent in 2027.
MAFRA continues to expand rice acreage reduction incentives, which should lead to moderate increases in acreage for alternate crops, including Soybeans, over the next few years. For more details on Korea’s crop production self-sufficiency incentives, refer to the MAFRA press release from December 2022. In MY 2021/22, Soybean production reached 0.11 MMT, recovering to normal levels following reduced production the previous year due to unfavorable weather conditions. Soybeans accounted for 64 percent of Korea’s total oilseeds production in MY 2021/22, followed by perilla (24 percent), peanuts (6 percent), and sesame seed (6 percent). Korea also produces a small amount of rapeseed, totaling below 200 MT annually.
Soybean Crushing in South Korea
Soybeans are the most heavily consumed oilseed in Korea. FAS/Seoul forecasts that total Soybean consumption in MY 2023/24 will stay around 1.4 MMT, slightly increased from the previous year. Of this total, 1.02 MMT will be used for crushing, and 0.34 MMT will be used for food use in products like tofu, soymilk, and soy sauce. There are only two Soybean crushers in Korea: CJ CheilJedang and Sajo Daerim Corporation, with a comparative crushing ratio of 65:35 percent.
FAS/Seoul forecasts that Soybean consumption for crushing will remain flat at 1.02 MMT in MY 2022/23 and again in MY 2023/24 due to stable market demand and stagnant local crushing capacity. Soybeans for crushing are all imported. The Agency also projects MY 2023/24 Soybean consumption for food to remain flat at 0.34 MMT due to stagnant local production and Tariff Rate Quota (TRQ) limitations on imports of food-grade Soybeans.
Other sources: USDA
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