SOUTH KOREA- The total wheat production in Marketing Year (MY) 2023/24 in Korea is forecast to reach a 40-year high of 46,000 metric tons (MT), as the government seeks food self-sufficiency, according to the US Department of Agriculture’s Foreign Agricultural Service (FAS) report.

This production estimate is up 34% from the prior year, the highest since 1983, thanks to the initiatives put in place by the government. 

However, this falls short of the government’s ambition to achieve 60,000 MT. Initial forecasts in spring 2023 indicated a potential achievement of the production target, but adverse weather conditions during the growing season, including frost damage in April followed by heavy rainfall and wind in May, led to a downward revision in the final production estimate.

The Ministry of Agriculture, Food, and Rural Affairs (MAFRA) aimed to enhance Korea’s food self-sufficiency rate, particularly elevating wheat from 1% in MY 2021/22 to 10% by 2030 through a range of producer incentives and domestic demand promotions. 

The government’s long-term support for production is expected to lead to gradual but not rapid increases in the coming years, albeit constrained by the price difference between domestic and imported wheat, discouraging the use of domestic wheat by manufacturers.

Post Seoul forecasts total wheat consumption in MY 2023/24 to remain at 4.1 million metric tons (MMT). Although there’s a slight decrease in feed wheat consumption from the prior year, Food, Seed, and Industrial (FSI) consumption, particularly for milling wheat and imported wheat flour and pasta, stays steady at 2.4 to 2.5 MMT. 

The rising demand for Western-style fast-consumption snacks like bread and pastries, preferred over traditional Korean rice-based meals, contributes to the sustained wheat demand.

The most common wheat flour type in Korea falls within the 9 to 12% protein content range, suitable for various purposes, including noodles. 

All-purpose wheat constituted 75% of total wheat flour consumption in 2022, followed by hard wheat flour for bread and soft flour for cakes/snacks at 16 and 9%, respectively.

Post Seoul anticipates total MY 2023/24 wheat imports to reach 4.5 MMT (including flour and pasta imports on a wheat equivalent basis), slightly lower than the exceptionally high imports of the previous two years. 

The preference for sourcing milling wheat from the United States, Australia, and Canada is driven by their consistent value and quality, aligning with customer preferences.

For feed wheat, there has been a shift in suppliers. While Eastern Europe, particularly Ukraine and Russia, held an 85% share in MY 2021/22, political circumstances caused a decline to an 11% share in MY 2022/23. 

However, with potential alternative routes from Ukraine through neighboring countries, a gradual recovery in market share is expected.

In MY 2023/24, feed wheat imports are estimated to decrease slightly to 1.6 MMT, mainly due to the higher price relative to feed corn. 

These two products function as substitutes in the Korean compound feed market, with their market shares fluctuating based on price competitiveness.