Korea’s rice destocking fires 2018/19 corn, wheat demand increase: USDA

South Korea is set to increase corn and wheat imports through 2018/19 as the government’s efforts at destocking rice inventories bear fruit, the USDA reported via a GAIN report highlights Tuesday.

The country maintained substantial end stocks of rice, with the government allowing it to be pushed into animal feed in 2015/16 as a way to clear out older stocks.

By the 2018/19 marketing year, feed rice demand is likely to fall to 300,000 mt – less than half the 782,000 mt likely to be used in the 2017/18 marketing year, and the lowest volume to go into feed since the inaugural year.

Coupled with a broader decline in rice production in South Korea, the scene is set for “feed wheat consumption… to rebound in marketing year 2018/19 from a drop in 2017/18,” according to the report, while corn feed consumption is expected to increase steadily.

For wheat, the USDA forecasts South Korea’s domestic production in 2017/18 to weigh in just 32,000 mt, with demand stacking up at 4.36 million mt and milling wheat consumption standing at 2.4 million mt.

That could see imports increase to 4.6 million mt in 2018/19, an increase of 200,000 mt on the previous year, according to the USDA.

For corn, consumption is forecast at 10.4 million mt, up 4% from 2017/18 estimates, with 8 million mt coming from feed corn consumption, while a growth in compound feed consumption to 19.7 million mt brings an additional layer of feed corn demand as it is a major ingredient in compound feed.

Imports are expected to rise to 10.3 million mt, a rise of 400,000 mt on the current marketing year’s expectations.

In the 2017 calendar year, South Korea's biggest corn suppliers were the United States at 4 million mt, Argentina with 1.8 million mt and Brazil with 1.7 million mt.

For wheat, the United States supplied 1.6 million mt, Australia 1.1 million mt and Ukraine 700,000 mt, according to government data.