January 22, 2007

 

South Korea soybean demand may fall 5 percent in 2007
 

 

South Korea's demand for soybean in 2007 might fall around 5 percent due to a weaker appetite for soy oil and stiff competition from cheaper imported oil products, traders and industry experts said.

 

Last year, the country imported around 900,000 tonnes of soybean.

 

This year, soybean imports could fall by 40,000-50,000 tonnes, said a Seoul-based trader.

 

South Korea imports almost all of its soybean needs from the US and Brazil. Imported soybeans are crushed to produce soyoil, which is used in cooking, and soymeal, an animal feed.

 

South Korean soybean processors would have to struggle to compete with imported oil products and the fast-changing tastes of consumers, said another trader.

 

Considering a fall in demand, local soybean processors have reduced the output of their crushing lines.

 

SamyangOil, a unit of South Korea's biggest food processing company, C J Corporation, suspended operations at its soybean crushing plant last year.

 

Soybean processors also have been hit by an increase in cheaper imported oil products.

 

The crushers' market share in domestic soybean oil market has fallen to 39 percent last year from around 45 percent a year earlier, according to the country's commerce ministry.

 

Last year, South Korea launched an anti-dumping investigation into soybean oil imports from Argentina, from which the country imports 90 percent of its soyoil.

 

Local soybean crushing companies including CJ, SamyangOil and Shindongbang Corp argued the dumping was hurting domestic firms.

 

But some traders expect the country's soybean imports next year could rise if government decides to impose anti-dumping duties on Argentine soy oil in November.