South Korea’s agriculture attaché issued its Oilseeds and Products Annual report in early March. In the report, the Post noted that projected 2019/2020 soybean imports from the U.S. are poised to grow in market share despite forecasts for total imports to remain unchanged from 2017/18 at 1.27 million tonnes. Steady imports are expected to meet unchanged demand at 1.35 million tonnes in the 2018/19 marketing year. Of the total demand, 1 million tonnes is expected to be crushed, 500,000 tonnes are to be consumed as food products such as tofu, soy milk and soy sauce, while the remaining 50,000 tonnes are expected to be consumed as domestic feed and waste. The chart that follows shows official U.S. Department of Agriculture (USDA) soybean import and demand estimates for South Korea. The data suggests that demand has remained mostly steady since 2001.
According to the Post, Brazil accounted for 50% of all soybean imports into South Korea in 2017/18 followed by the U.S. at 45%. The U.S. portion of total imports grew by 3% from the 2016/17 and is projected to remain on an upward trajectory thanks in large part to the U.S. – Korea Free Trade Agreement (KORUS FTA) that was signed June 30, 2007 and went into effect on March 15, 2012. Under the agreement, Korea purchased 25,000 tonnes of identity-preserved soybeans intended for food use from the U.S. in 2015 duty-free. The established volumes for zero-duty tariff rate quotas has since grown by 3% annually going into perpetuity. Based on this math, Korea is expected to import just shy of 29,000 tonnes of U.S. soybeans in the 2019 calendar year. The 2019 allocation was established last year so that Korean buyers could forward contracts their needs directly with U.S. farmers. The Korean government has established similar agreements with Canada and Australia. The success of the KORUS FTA is a good example of how, despite mostly static market demand, bi-lateral trade agreements can support stronger trade relationships between buyers and U.S. soybean suppliers.