South Korea is a price sensitive market for feed grains, basing its buying decisions on the price competitiveness of alternative feeds. South Korea is also one of the world’s largest importers of corn, driven by a consistently robust demand for feed for its poultry and swine industries.
However, South Korea’s corn imports have declined after reaching a record high in 2013/14. U.S. market share also fell due to heavy competition from Black Sea and South American exporters.
Even with a CY 2017 tariff-rate quota (TRQ) that allows for 10 million tons of dutyfree feed corn imports, South Korea’s 2016/17 estimate is down this month due to higher usage of other feedstuffs.
This trend is largely attributed to stiff competition from competitively-priced feed quality wheat and the use of domestic rice. The government recently approved 500,000 tons of domestic rice stocks to be used for feed in 2017, about five times more than the previous year.
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A nearly fivefold growth in the import of distiller’s dried grains with solubles (DDGS) over the past 10 years have also factored into the recent decline. Although South Korea has increased its usage of other substitutes, corn still makes up the majority of feed consumption and 2017/18 imports are expected up over the previous year to 10.2 million tons.
Historically low corn prices are expected to drive demand in this price-sensitive market amid record global corn trade.