South Korean rice production decline continues

Domestic rice production is continuing its slow decline in South Korea as the government incentivizes farmers to switch to planting alternate crops while also fostering a domestic wheat industry, according to a report from the Foreign Agricultural Service (FAS) of the US Department of Agriculture.

In marketing year 2024-25, South Korea’s milled rice production is forecast at 3.6 million tonnes, 1.2% below the 2023-24 estimate of 3.7 million tonnes, based on a nationwide survey by Statistics Korea (KOSTAT), the FAS said.

Rice planted area in 2024-25 is estimated down 1.5% to 698,000 hectares with a marginal increase in yield from favorable weather and uncertain damage from a late-season pest infestation. Total rice consumption in 2024-25 is projected to be 3.95 million tonnes, down from 4.18 million tonnes the previous year with ending stocks at 1.24 million tonnes.

“This third straight year of reduced rice production reflects the government’s policies to replace rice acreage with other crops as the main strategy to manage the country’s chronic oversupply of rice,” the FAS said.

As part of the South Korean government’s long-term plan to foster the domestic wheat industry, a new milling facility in Gumi, North Gyeongsang Province, was built this year with an investment of 4.9 billion Korean won ($3.7 million). The plant has a production capacity of 60 tonnes of wheat flour per day and is equipped with drying facilities and cold storage.

South Korea will continue to rely on imports for 98% of milling wheat, with domestic production falling well below government self-sufficiency targets at 36,000 tonnes in 2024-25. The government aims to increase domestic wheat production to 120,000 tonnes by 2025, with a target food wheat self-sufficiency rate of 5%, compared to the current 2%. Imports are seen reaching 4.6 million tonnes in 2024-25, down from just under 5 million tonnes year on year.

Total wheat consumption is forecast down by 9% to 4.2 million tonnes in 2024-25, driven by decreased demand for feed wheat. In 2024-25, feed wheat consumption is forecast at 1.7 million tonnes, 19% below 2023-24, as competitive corn prices drive substitution away from feed wheat.

“Steady demand for milling wheat, supported by the growing global popularity of Korean ramen noodles, will temper the impact on overall wheat consumption,” the FAS said.

Corn production in South Korea is an estimated 90,000 tonnes in 2024-25 and accounts for less than 1% of total consumption, which is seen at 11.6 million tonnes. Feed corn consumption will remain at about 80% of total usage, as unlike wheat, corn is consumed more in the feed industry, the FAS said.

Corn imports for 2024-25 and 2023-24 have been revised upward to 11.6 million and 11.5 million tonnes, respectively, from the previous report. Feed corn and feed wheat substitute for each other, and imports vary on the price gap between the two commodities.

With a competitive international price of feed corn compared to feed wheat, especially with more exportable supplies coming from the United States, the US market share of corn reached 20% in 2023-24, breaking out of a precipitous decline.

“Looking ahead to 2024-25, the United States can be expected to maintain, if not grow, its share back to pre-2020 levels, which were often 20% to 40%, depending on global prices,” the FAS said.

Tags: rice, crop forecast