The US Loses a Rice Market Share in South Korea
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South Korea’s MY 2022/23 Rice production estimate is increased by 0.04 MMT from the previous report to 3.76 MMT (milled basis). The Ministry of Agriculture, Food and Rural Affairs (MAFRA) aim to reduce planted Rice acreage in MY 2023/24 to 690,000 ha, down 5.1 percent from the current MY 2022/23 estimate. This ‘Rice acreage reduction incentive’ program is intended to reduce over-production (relative to the Government targets) and support domestic pRices. MAFRA implemented the latest version of this policy in February – May 2022, but with limited impact. Given the continuously aging population in agricultural production areas, lower mechanization rates (compared to Rice) for alternative crops like wheat and soybeans, and the prevalence of specialized Rice production equipment, it will be difficult to significantly increase the production of alternative crops to replace Rice production.
In December 2022, MAFRA released preliminary Rice consumption data for MY 2020/21 in the MAFRA statistical yearbook. MY 2020/21 Rice consumption was 4.14 MMT, up 1.8 percent from the previous year, due to the significant increase in the loss/other categories. Total consumption estimates in MY 2021/22 are 6.1 percent lower than the last year, as table Rice consumption continues to decline. The MY 2022/23 per capita consumption forecast is 54.9 kg, dropping from 56.9 kg in MY 2020/21 and 55.8 kg in MY 2021/22.
The forecast for processing consumption is up 1.6 percent for MY 2022/23, partially offsetting the decrease in total Rice consumption. Processing Rice for food production is the main driving factor, fueled primarily by the cooked Rice category. Due to the changing composition of household types in Korea, there is an increasing demand for processing Rice used in ready-to-eat products, mainly from single-person and dual-income households with a preference for convenient home-style meals.
South Korea Rice Trade
The MY 2022/23 Rice imports forecast is revised to 0.41 MMT, down 9.3 percent from the previous forecast, due to unfilled volume from the 2022 U.S. Rice CSQ (Country Specific Quota). The MY 2021/22 Rice import estimate is reduced slightly from the previous report to 0.45 MMT. Under WTO commitments, Korea imports 0.41 MMT (milled base) of Rice annually on a Most Favored Nation (MFN) basis at the current duty level of 5 percent under the TRQ regime implemented in 2015. At the end of 2019, Korea allocated 0.39 MMT of CSQ within the TRQ for five trading partners (the United States, China, Vietnam, Thailand, and Australia) following negotiations to resolve a WTO dispute on Rice tariffication. The remaining 0.02 MMT is allocated on an MFN basis and available to the five countries with CSQs. Tariffs outside the quota remain prohibitively high at 513 percent.
On December 29, 2022, the Korea Agro-Fisheries and Food Trade Corporation (aT) completed the tendering process for 2022 Rice TRQ contracts. The Korea Agro-Fisheries & Food Trade Corporation continues to sell imported table Rice to consumer distribution channels weekly through a public auction system (www.atbid.co.kr). Under the 2022 TRQ, Korea contracted 76.5 percent of its 2022 WTO TRQ commitments (0.31 MMT out of 0.41 MMT, milled basis). Due to the severe drought in California, U.S. supplies were limited for the main variety exported to Korea, medium-grain japonica-type Rice. Primarily due to that tight supply, the United States sold 0.04 MMT of Rice to Korea out of the 0.13 MMT U.S. CSQ (27.4 percent of the CSQ) in 2022 under the TRQ regime. In MY2021/2022, China led its import market with 0.2 million tons of Rice, followed by the United States (0.1 million tons) and Vietnam (80,000 tons). The US Rice export decreased from 157,000 tons to 97,000 tons in MY2018/2019 – 2021/2022.
Other sources: USDA
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