December 15, 2003

Korea 2003 Grain, Feed Wheat Review

FAS/Seoul estimates MY 2003/04 Korean wheat imports at 3 million metric tons (MMT) reflecting Korea's sharp reductions in feed wheat imports.  During the first three months of MY 2003/04, feed wheat imports on a customs cleared basis amounted to 317,000 MT compared to 355,000 MT for the first three months of MY 2002/03.  Korean importers have reportedly contracted (so far) for only 217,000 tons for October 2003-January 2004 delivery which is roughly 150,000 MT less than contracts in place last year for the same period. 

Lower contract quantities for feed wheat reinforce reports from traders and feed millers that feed wheat availabilities from Korea's usual sources have tightened considerably.  Traders also report that feed wheat offering prices available to the Korean market are relatively unattractive compared to corn prices (although there is some question about availability of Chinese corn).  Accordingly, Korean feed wheat imports are expected to be limited to .75 MMT for MY 2003/04 compared to 1.67 MMT in MY 2002/03.  Feed wheat imports are expected to be supplemented by stocks resulting in usage of feed wheat for compound feed production of .80 MMT.  Feed wheat use in MY 2002/03 amounted to 1.628 MMT according to Korean government and industry reports.

MY 2003/04 milling wheat imports (and consumption) are expected to be maintained at 2.25 MMT.  Imports of U. S. milling wheat are expected to reach 1.3 MMT in MY 2003/04.  Korean flour millers have indicated that Australian wheat will also be attractive for use in lowering protein levels of wheat flour for noodle and confectionary production. 

FAS/Seoul has also revised MY 2002/03 wheat import and consumption estimates based on official data. 

Source: USDA