Antitrust probe intensifies pressure on South Korea’s milling market

South Korea’s grain market is facing increased government oversight and structural imbalances, including a high dependence on imports. Additional pressure is coming from an antitrust investigation in the flour milling sector, which could lead to significant changes in pricing and supply chains.

The Korea Fair Trade Commission is investigating a possible cartel involving seven leading flour producers that account for around 88% of the industrial segment. If violations are confirmed, companies could face substantial fines and be forced to roll back prices to previous levels, a move that is already pushing producers to cut prices.

Against this backdrop, domestic grain production remains limited. Wheat output in the 2025/26 season is estimated at just 38,000 tons, well below the country’s self-sufficiency target. The key constraints include low competitiveness of local grain and weak incentives for farmers due to fixed procurement prices.

Imports continue to play a dominant role in meeting demand. Wheat imports are estimated at around 4.4 million tons, with the United States, Canada, and Australia as the main suppliers. Corn imports are even larger, exceeding 11 million tons and covering nearly all domestic demand, particularly in the feed sector.

Meanwhile, the rice sector is undergoing structural transformation, with the government reducing rice cultivation areas and promoting alternative crops. Despite this, rice production remains significant at around 3.5 million tons, although consumption is gradually declining due to changing dietary patterns.

In the oilseeds segment, challenges persist. Domestic soybean production is limited, while processors prefer imported beans due to better price and quality. At the same time, the government is scaling back tariff quotas, which may reduce soybean imports and further constrain processing activity.

Overall, South Korea’s grain and oilseed markets are characterized by high reliance on external supplies, sensitivity to global price trends, and increasing regulatory pressure. Market participants note that future developments will depend on the balance between government policy, import dynamics, and the ability of domestic production to adapt to changing conditions.