Required Report - public distribution

**Date:** 11/3/2006

**GAIN Report Number:** KS6115

KS6115

**Korea, Republic of**

**Grain and Feed**

**Quarterly Grain Trade Report**

**2006**

**Approved by:**

![](media/image1.wmf)Lloyd S. Harbert

U.S. Embassy

**Prepared by:**

Sunchul Choi//Michael Francom

**Report Highlights:**

The feed wheat import forecast is lowered to 1 MMT, 35 percent lower
than last year, due to the expected decrease in feed wheat availability
from traditional suppliers. Meanwhile, feed corn imports are expected to
grow slightly as Korean livestock producers switch to less expensive
feed corn

Includes PSD Changes: Yes

Includes Trade Matrix: Yes

Quarterly Report

Seoul \[KS1\]

\[KS\]

Table of Contents

[**WHEAT 3**](#wheat)

[WHEAT \-- STATISTICAL TABLES 4](#wheat----statistical-tables)

[Wheat PSD 4](#wheat-psd)

[Korea: Import Trade Matrix of Wheat
5](#korea-import-trade-matrix-of-wheat)

[Korea: Wheat Imports 6](#korea-wheat-imports)

[Korea: Monthly Wheat Imports 6](#korea-monthly-wheat-imports)

[Korea: MY 2006/07 Monthly Wheat Imports By Origin
7](#korea-my-200607-monthly-wheat-imports-by-origin)

[Korea: Feed Wheat Contracts by Estimated Time of Arrival (ETA)
7](#korea-feed-wheat-contracts-by-estimated-time-of-arrival-eta)

[Korea: Post Estimates of Wheat Use
8](#korea-post-estimates-of-wheat-use)

[Korea: Monthly Wheat Use 8](#korea-monthly-wheat-use)

[CORN 9](#corn)

[CORN \-- STATISTICAL TABLES 10](#corn----statistical-tables)

[Corn PS&D 10](#corn-psd)

[Korea: Import Trade Matrix of Corn
11](#korea-import-trade-matrix-of-corn)

[Korea: Corn Imports 12](#korea-corn-imports)

[Korea: Corn Contracts per Estimated Time of Arrival (ETA) in MY 2006/07
12](#korea-corn-contracts-per-estimated-time-of-arrival-eta-in-my-200607)

[Korea: Total Corn Utilization 13](#korea-total-corn-utilization)

[Korea: Compound Feed Production per Animal
13](#korea-compound-feed-production-per-animal)

[Korea: Feed Ingredient Use for Compound Feed Production
13](#korea-feed-ingredient-use-for-compound-feed-production)

[RICE 14](#rice)

[Rice, Milled PSD 14](#rice-milled-psd)

[Production 15](#production)

[Korea: Rice Area, Yield and Production
15](#korea-rice-area-yield-and-production)

[Government Rice Purchases for Public Storage System for Emergencies
16](#government-rice-purchases-for-public-storage-system-for-emergencies)

[Production Policy 16](#production-policy)

[Direct Payment Program for Rice Income Compensation
17](#direct-payment-program-for-rice-income-compensation)

[Consumption 17](#consumption)

[Korea: Rice Domestic Utilization Pattern
17](#korea-rice-domestic-utilization-pattern)

[Trade 17](#trade)

[Korea: Rice Aid to North Korea 20](#korea-rice-aid-to-north-korea)

[Appendix: 21](#appendix)

[Korea: Allocation of the MMA for 2005-2014
21](#korea-allocation-of-the-mma-for-2005-2014)

[Korea: Import Schedule of Table Rice
21](#korea-import-schedule-of-table-rice)

[Korea: Rice allocation per Country on the buying tender under MMA
21](#korea-rice-allocation-per-country-on-the-buying-tender-under-mma)

# 

# WHEAT

The MY 2006/07 wheat import estimate is lowered to 3.3 MMT (2.3 MMT of
milling wheat and 1 MMT of feed wheat) largely due to the expected
decrease in feed wheat availability from traditional suppliers. The
projected reduction in domestic cattle and swine inventories will also
put limited downward pressure on feed wheat imports. Given these market
conditions, feed wheat imports forecast is lowered to 1 MMT, which is 35
percent lower than the previous year. Additionally, import data for
Jul-Sep and reported feed wheat sales contracts for delivery during the
remainder of the year support lowering the estimate.

According to MY 2006/07 feed wheat contract data, the majority of feed
wheat imports will be from China. Optional origin sales contracts will
likely be exercised identifying China as the supplier since Chinese feed
wheat prices are currently lower than other foreign suppliers.

Milling wheat imports are forecast to increase minimally to 2.3 MMT.
Despite the trade implications of the Australian drought, Korea will
continue to place a high priority on purchasing Australian milling
wheat. As a result, imports of U.S. milling wheat for the time being are
expected to remain unchanged from the previous forecast of 1.2 MMT.
However, if the fair average quality (FAQ) of Australian wheat is found
to be poor or if it is simply unavailable, Korean buyers will likely
look for alternatives from other countries. Of note, at the request of
Korean flour millers, the Australian Wheat Board (AWB) has agreed to
hold a crop quality seminar in mid November to discuss the
characteristics of the 2006 Australian wheat crop. The US Wheat
Association also plans to conduct a crop quality seminar during that
same timeframe.

In MY 2005/06, total wheat consumption reached at 3.6 million metric
tons (MMT), up 7 percent from the previous year due to greater
consumption of feed wheat. However, total wheat consumption in MY
2006/07 is expected to slow down to 3.27 MMT due to limited feed wheat
supplies and declining livestock inventories. Meanwhile, milling wheat
consumption is projected to remain stable.

# WHEAT \-- STATISTICAL TABLES 

## Wheat PSD

![](media/image2.wmf)

## Korea: Import Trade Matrix of Wheat![](media/image3.wmf) 

+------------------+-------------+----------------+-------------------+
| ## Kore          |             |                |                   |
| a: Wheat Imports |             |                |                   |
|                  |             |                |                   |
| (1,000 MT,       |             |                |                   |
| Customs Cleared  |             |                |                   |
| Basis)           |             |                |                   |
+------------------+-------------+----------------+-------------------+
| Marketing Year   | Feed        | Flour          | Total             |
| (July/June)      |             |                |                   |
+------------------+-------------+----------------+-------------------+
| 95/96            | 272         | 2,235          | 2,507             |
+------------------+-------------+----------------+-------------------+
| 96/97            | 1,197       | 2,253          | 3,450             |
+------------------+-------------+----------------+-------------------+
| 97/98            | 1,717       | 2,200          | 3,917             |
+------------------+-------------+----------------+-------------------+
| 98/99            | 2,453       | 2,237          | 4,690             |
+------------------+-------------+----------------+-------------------+
| 99/00            | 1,304       | 2,479          | 3,783             |
+------------------+-------------+----------------+-------------------+
| 00/01            | 691         | 2,410          | 3,101             |
+------------------+-------------+----------------+-------------------+
| 01/02            | 1,498       | 2,369          | 3,867             |
+------------------+-------------+----------------+-------------------+
| 02/03            | 1,667       | 2,268          | 3,935             |
+------------------+-------------+----------------+-------------------+
| 03/04            | 921         | 2,394          | 3,315             |
+------------------+-------------+----------------+-------------------+
| 04/05            | 1,089       | 2,385          | 3,474             |
+------------------+-------------+----------------+-------------------+
| 05/06            | 1,536       | 2,220          | 3,756             |
+------------------+-------------+----------------+-------------------+
| 06/07 a/         | 1,000       | 2,300          | 3,300             |
+------------------+-------------+----------------+-------------------+

Source: Korea Customs Service

a/ FAS Seoul forecast

+-------------+-------------+-------------+-------------+-------------+
| ## Korea:   |             |             |             |             |
|  Monthly Wh |             |             |             |             |
| eat Imports |             |             |             |             |
|             |             |             |             |             |
| (1,000 MT)  |             |             |             |             |
+-------------+-------------+-------------+-------------+-------------+
| Month       | Feed Wheat  |             | Milling     |             |
|             |             |             | Wheat       |             |
+-------------+-------------+-------------+-------------+-------------+
|             | MY 2005/06  | MY 2006/07  | MY 2005/06  | MY 2006/07  |
+-------------+-------------+-------------+-------------+-------------+
| July        | 80          | 64          | 179         | 204         |
+-------------+-------------+-------------+-------------+-------------+
| August      | 120         | 74          | 176         | 190         |
+-------------+-------------+-------------+-------------+-------------+
| September   | 129         | 91          | 183         | 205         |
+-------------+-------------+-------------+-------------+-------------+
| ######      | **329**     | **229**     | **538**     | **599**     |
| # Sub Total |             |             |             |             |
+-------------+-------------+-------------+-------------+-------------+
| October     | 131         | Na          | 211         | Na          |
+-------------+-------------+-------------+-------------+-------------+
| November    | 135         | Na          | 223         | Na          |
+-------------+-------------+-------------+-------------+-------------+
| December    | 151         | Na          | 230         | Na          |
+-------------+-------------+-------------+-------------+-------------+
| January     | 172         | Na          | 115         | Na          |
+-------------+-------------+-------------+-------------+-------------+
| February    | 130         | Na          | 215         | Na          |
+-------------+-------------+-------------+-------------+-------------+
| March       | 157         | Na          | 170         | Na          |
+-------------+-------------+-------------+-------------+-------------+
| April       | 87          | Na          | 179         | Na          |
+-------------+-------------+-------------+-------------+-------------+
| May         | 117         | Na          | 176         | Na          |
+-------------+-------------+-------------+-------------+-------------+
| June        | 127         | Na          | 163         | Na          |
+-------------+-------------+-------------+-------------+-------------+
| **Total**   | **1,536**   | Na          | **2,220**   | Na          |
+-------------+-------------+-------------+-------------+-------------+

Source: Korea Customs Service

+-------------+---------+--------+-------+-------+--------+---------+
| ## Korea    |         |        |       |       |        |         |
| : MY 2006/0 |         |        |       |       |        |         |
| 7 Monthly W |         |        |       |       |        |         |
| heat Import |         |        |       |       |        |         |
| s By Origin |         |        |       |       |        |         |
|             |         |        |       |       |        |         |
| (1,000 MT,  |         |        |       |       |        |         |
| based on    |         |        |       |       |        |         |
| Customs     |         |        |       |       |        |         |
| Clearance)  |         |        |       |       |        |         |
+-------------+---------+--------+-------+-------+--------+---------+
| Country     | U. S.   | Aus    | C     | China | Other  | Total   |
|             |         | tralia | anada |       |        |         |
+-------------+---------+--------+-------+-------+--------+---------+
| Milling     |         |        |       |       |        |         |
| Wheat       |         |        |       |       |        |         |
+-------------+---------+--------+-------+-------+--------+---------+
| 2006 July   | 113     | 82     | 9     | 0     | 0      | 204     |
+-------------+---------+--------+-------+-------+--------+---------+
| August      | 78      | 102    | 10    | 0     | 0      | 190     |
+-------------+---------+--------+-------+-------+--------+---------+
| September   | 113     | 86     | 5     | 0     | 1      | 205     |
+-------------+---------+--------+-------+-------+--------+---------+
| **Total**   | **304** | *      | *     | **0** | **1**  | **599** |
|             |         | *270** | *24** |       |        |         |
+-------------+---------+--------+-------+-------+--------+---------+
| Feed Wheat  |         |        |       |       |        |         |
+-------------+---------+--------+-------+-------+--------+---------+
| 2006 July   | 0       | 0      | 44    | 20    | 0      | 64      |
+-------------+---------+--------+-------+-------+--------+---------+
| August      | 0       | 0      | 63    | 11    | 0      | 74      |
+-------------+---------+--------+-------+-------+--------+---------+
| September   | 0       | 0      | 7     | 84    | 0      | 91      |
+-------------+---------+--------+-------+-------+--------+---------+
| **Total**   | **0**   | **0**  | **    | **    | **0**  | **229** |
|             |         |        | 114** | 115** |        |         |
+-------------+---------+--------+-------+-------+--------+---------+
| Total Wheat |         |        |       |       |        |         |
+-------------+---------+--------+-------+-------+--------+---------+
| 2006 July   | 113     | 82     | 53    | 20    | 0      | 259     |
+-------------+---------+--------+-------+-------+--------+---------+
| August      | 78      | 102    | 73    | 11    | 0      | 296     |
+-------------+---------+--------+-------+-------+--------+---------+
| September   | 113     | 86     | 12    | 84    | 1      | 312     |
+-------------+---------+--------+-------+-------+--------+---------+
| **Total**   | **304** | *      | **    | **    | **1**  | **828** |
|             |         | *270** | 138** | 115** |        |         |
+-------------+---------+--------+-------+-------+--------+---------+

Source: Korea Customs Service

+-----------------+---------------------+-----------------------------+
| ## Ko           |                     |                             |
| rea: Feed Wheat |                     |                             |
|  Contracts by E |                     |                             |
| stimated Time o |                     |                             |
| f Arrival (ETA) |                     |                             |
|                 |                     |                             |
| (Unit: 1,000    |                     |                             |
| MT, as of       |                     |                             |
| October 24,     |                     |                             |
| 2006)           |                     |                             |
+-----------------+---------------------+-----------------------------+
| ETA             | Quantity            | Price (US\$/MT)^1/^         |
+-----------------+---------------------+-----------------------------+
| Jul. 2006       | 27a/                | 145                         |
+-----------------+---------------------+-----------------------------+
| Aug.            | 110b/               | 145                         |
+-----------------+---------------------+-----------------------------+
| Sep.            | 107a/               | 156                         |
+-----------------+---------------------+-----------------------------+
| Oct.            | 55c/                | 154                         |
+-----------------+---------------------+-----------------------------+
| Nov.            | 104a/               | 157                         |
+-----------------+---------------------+-----------------------------+
| Dec.            | 85d/                | 174                         |
+-----------------+---------------------+-----------------------------+
| Jan. 2007       | 52a/                | 200                         |
+-----------------+---------------------+-----------------------------+
| Feb.            | 52a/                | 200                         |
+-----------------+---------------------+-----------------------------+
| Mar.            | 0                   | Na                          |
+-----------------+---------------------+-----------------------------+
| Apr.            | 52a/                | 199                         |
+-----------------+---------------------+-----------------------------+
| Total           | 644                 |                             |
+-----------------+---------------------+-----------------------------+

Source: Local Grain Traders

1/ CNF Korea in average.

a/ China

b/ Canada for 55,000 MT and China for 55,000 MT

c/ Optional origin

d/ Optional origin for 55,000 MT and China for 30,000 MT.

+-------------+-------------+-------------+-------------+-------------+
| ## K        |             |             |             |             |
| orea: Post  |             |             |             |             |
| Estimates o |             |             |             |             |
| f Wheat Use |             |             |             |             |
|             |             |             |             |             |
| (1,000 MT,  |             |             |             |             |
| July/June)  |             |             |             |             |
+-------------+-------------+-------------+-------------+-------------+
| Year        | 2003/04     | 2004/05     | 2005/06     | 2006/07 a/  |
+-------------+-------------+-------------+-------------+-------------+
| Milling     | 2,333       | 2,272       | 2,182       | 2,267       |
| Wheat       |             |             |             |             |
+-------------+-------------+-------------+-------------+-------------+
| Feed Wheat  | 942         | 1,107       | 1,435       | 1,000       |
+-------------+-------------+-------------+-------------+-------------+
| Total       | 3,275       | 3,379       | 3,617       | 3,267       |
+-------------+-------------+-------------+-------------+-------------+

Source: Korean Feed Association (KFA)

Korean Flour Millers Industry Association (KOFMIA)

a/ FAS/Seoul forecast

+-------------+-------------+-------------+-------------+-------------+
| ## Ko       |             |             |             |             |
| rea: Monthl |             |             |             |             |
| y Wheat Use |             |             |             |             |
|             |             |             |             |             |
| (1,000 MT)  |             |             |             |             |
+-------------+-------------+-------------+-------------+-------------+
| Month       | Feed Wheat  |             | Milling     |             |
|             |             |             | Wheat a/    |             |
+-------------+-------------+-------------+-------------+-------------+
|             | MY 2005/06  | MY 2006/07  | MY 2005/06  | MY 2006/07  |
+-------------+-------------+-------------+-------------+-------------+
| July        | 88          | 113         | 181         | 187         |
+-------------+-------------+-------------+-------------+-------------+
| August      | 101         | 100         | 195         | 193         |
+-------------+-------------+-------------+-------------+-------------+
| September   | 109         | 89          | 186         | 205         |
+-------------+-------------+-------------+-------------+-------------+
| **Sub       | **298**     | **303**     | **562**     | **585**     |
| Total**     |             |             |             |             |
+-------------+-------------+-------------+-------------+-------------+
| October     | 120         | Na          | 188         | Na          |
+-------------+-------------+-------------+-------------+-------------+
| November    | 133         | Na          | 185         | Na          |
+-------------+-------------+-------------+-------------+-------------+
| December    | 135         | Na          | 192         | Na          |
+-------------+-------------+-------------+-------------+-------------+
| January     | 125         | Na          | 192         | Na          |
+-------------+-------------+-------------+-------------+-------------+
| February    | 120         | Na          | 156         | Na          |
+-------------+-------------+-------------+-------------+-------------+
| March       | 134         | Na          | 185         | Na          |
+-------------+-------------+-------------+-------------+-------------+
| April       | 125         | Na          | 176         | Na          |
+-------------+-------------+-------------+-------------+-------------+
| May         | 122         | Na          | 189         | Na          |
+-------------+-------------+-------------+-------------+-------------+
| June        | 123         | Na          | 185         | Na          |
+-------------+-------------+-------------+-------------+-------------+
| **Total**   | 1,435       | Na          | 2,210       | Na          |
+-------------+-------------+-------------+-------------+-------------+

Source: KFA and KOFMIA

a/ includes the portion of wheat flour exported, but excludes the
portion used in soy-sauce production

# CORN

The MY 2006/07 corn import estimate is forecast at 9 MMT, up .3 MMT from
the previous forecast. The projected increase is based on the
expectation that Korean livestock producers will switch to corn due to
the tight availability of feed wheat imports from traditional markets.

Reported corn contract data indicates that Korean feed millers have made
contracts on an optional origin basis. It is expected that these
contracts will be exercised designating China as the supplier with
delivery dates between November 2006 and February 2007. Optional origin
contracts with delivery on and after March 2007 are expected to favor
U.S. corn. However, strong competition from China will prevent
significant growth in imports of U.S. corn, which are forecast to reach
6 MMT in MY 2006/07.

In MY 2005/06, Korea imported 8.48 MMT of corn (1.8 percent less than MY
2004/05). Feed corn imports have decreased to 6.5 MMT, down 3.4 percent
from MY 2004/05 while food corn imports have increased by 4.2 percent
from the previous year.

Compound feed production in MY 2006/07 is projected to level off in
response to reductions in cattle and swine inventories, while poultry
production is expected to remain stable.

In MY 2006/07, total corn consumption is forecast at 9.1 MMT, of which
2.1 MMT is used for food and 7 MMT for feed. Corn feed consumption
estimate was based was increased due to tight international supplies of
feed wheat.

# CORN \-- STATISTICAL TABLES 

## Corn PS&D

![](media/image4.wmf)

## Korea: Import Trade Matrix of Corn

## ![](media/image5.wmf)

+--------+-------+-------+-------+-------+-------+-------+-------+
| ## K   |       |       |       |       |       |       |       |
| orea:  |       |       |       |       |       |       |       |
| Corn I |       |       |       |       |       |       |       |
| mports |       |       |       |       |       |       |       |
|        |       |       |       |       |       |       |       |
| (1,    |       |       |       |       |       |       |       |
| 000MT, |       |       |       |       |       |       |       |
| C      |       |       |       |       |       |       |       |
| ustoms |       |       |       |       |       |       |       |
| C      |       |       |       |       |       |       |       |
| leared |       |       |       |       |       |       |       |
| Basis) |       |       |       |       |       |       |       |
+--------+-------+-------+-------+-------+-------+-------+-------+
| Mar    | From  |       |       | From  |       |       | U. S. |
| keting | World |       |       | the   |       |       | Share |
| Year   |       |       |       | U. S. |       |       |       |
+--------+-------+-------+-------+-------+-------+-------+-------+
|        | Feed  | Ind.  | Total | Feed  | Ind.  | Total | \%    |
+--------+-------+-------+-------+-------+-------+-------+-------+
| 93/94  | 4,049 | 1,647 | 5,696 | 199   | 181   | 380   | 7     |
+--------+-------+-------+-------+-------+-------+-------+-------+
| 94/95  | 6,463 | 1,760 | 8,223 | 6,192 | 1,420 | 7,612 | 93    |
+--------+-------+-------+-------+-------+-------+-------+-------+
| 95/96  | 7,166 | 1,797 | 8,963 | 6,855 | 1,699 | 8,554 | 95    |
+--------+-------+-------+-------+-------+-------+-------+-------+
| 96/97  | 6,455 | 1,881 | 8,336 | 3,869 | 1,629 | 5,498 | 66    |
+--------+-------+-------+-------+-------+-------+-------+-------+
| 97/98  | 5,755 | 1,773 | 7,528 | 1,610 | 1,699 | 3,309 | 44    |
+--------+-------+-------+-------+-------+-------+-------+-------+
| 98/99  | 5,593 | 1,921 | 7,514 | 4,543 | 1,891 | 6,434 | 86    |
+--------+-------+-------+-------+-------+-------+-------+-------+
| 99/00  | 6,618 | 2,060 | 8,678 | 1,610 | 1,620 | 3,230 | 37    |
+--------+-------+-------+-------+-------+-------+-------+-------+
| 00/01  | 6,568 | 2,155 | 8,723 | 2,169 | 1,120 | 3,289 | 38    |
+--------+-------+-------+-------+-------+-------+-------+-------+
| 01/02  | 6,474 | 2,128 | 8,602 | 1,487 | 111   | 1,598 | 19    |
+--------+-------+-------+-------+-------+-------+-------+-------+
| 02/03  | 6,657 | 2,137 | 8,794 | 306   | 24    | 330   | 4     |
+--------+-------+-------+-------+-------+-------+-------+-------+
| 03/04  | 6,659 | 2,117 | 8,776 | 2,921 | 336   | 3,257 | 37    |
+--------+-------+-------+-------+-------+-------+-------+-------+
| 04/05  | 6,739 | 1,895 | 8,634 | 2,303 | 190   | 2,493 | 29    |
+--------+-------+-------+-------+-------+-------+-------+-------+
| 05/06  | 6,507 | 1,975 | 8,482 | 4,813 | 561   | 5,374 | 63    |
+--------+-------+-------+-------+-------+-------+-------+-------+
| 06/07  | 7,000 | 2,000 | 9,000 | 5,500 | 500   | 6,000 | 68    |
| a/     |       |       |       |       |       |       |       |
+--------+-------+-------+-------+-------+-------+-------+-------+

Source: FAS Seoul

a/ FAS/Seoul forecast.

+-------------+---------+---------+----------+------------+----------+
| ## Korea    |         |         |          |            |          |
| : Corn Cont |         |         |          |            |          |
| racts per E |         |         |          |            |          |
| stimated Ti |         |         |          |            |          |
| me of Arriv |         |         |          |            |          |
| al (ETA) in |         |         |          |            |          |
|  MY 2006/07 |         |         |          |            |          |
|             |         |         |          |            |          |
| (Unit:      |         |         |          |            |          |
| 1,000 MT,   |         |         |          |            |          |
| as of       |         |         |          |            |          |
| October 24, |         |         |          |            |          |
| 2006)       |         |         |          |            |          |
+-------------+---------+---------+----------+------------+----------+
| ETA         | U.S.    | China   | SOAM 1/  | Others 2/  | Total    |
+-------------+---------+---------+----------+------------+----------+
| Oct. 2006   | 385     | 30      | 0        | 275        | 690      |
+-------------+---------+---------+----------+------------+----------+
| Nov.        | 275     | 0       | 0        | 660        | 935      |
+-------------+---------+---------+----------+------------+----------+
| Dec.        | 108     | 25      | 0        | 220        | 353      |
+-------------+---------+---------+----------+------------+----------+
| Jan. 2007   | 165     | 269     | 0        | 440        | 874      |
+-------------+---------+---------+----------+------------+----------+
| Feb.        | 0       | 275     | 0        | 385        | 660      |
+-------------+---------+---------+----------+------------+----------+
| Mar.        | 55      | 55      | 0        | 165        | 275      |
+-------------+---------+---------+----------+------------+----------+
| **Total**   | **988** | **654** | **0**    | **2,145**  | *        |
|             |         |         |          |            | *3,787** |
+-------------+---------+---------+----------+------------+----------+

Source: Local Grain Traders

1/ South American Countries

2/ Includes optional origins

+-------------+-------------+-------------+-------------+-------------+
| ## Korea:   |             |             |             |             |
| Total Corn  |             |             |             |             |
| Utilization |             |             |             |             |
|             |             |             |             |             |
| (           |             |             |             |             |
| Oct./Sept., |             |             |             |             |
| 1,000 MT)   |             |             |             |             |
+-------------+-------------+-------------+-------------+-------------+
| Marketing   | Feed        | Processing  | Food        | Total       |
|             |             |             |             |             |
| Year        |             | a/          | b/          |             |
+-------------+-------------+-------------+-------------+-------------+
| 1997/98     | 5,875       | 1,715       | 83          | 7,673       |
+-------------+-------------+-------------+-------------+-------------+
| 1998/99     | 5,560       | 1,886       | 80          | 7,526       |
+-------------+-------------+-------------+-------------+-------------+
| 1999/00     | 6,541       | 2,004       | 79          | 8,624       |
+-------------+-------------+-------------+-------------+-------------+
| 2000/01     | 6,460       | 2,092       | 64          | 8,616       |
+-------------+-------------+-------------+-------------+-------------+
| 2001/02     | 6,584       | 2,094       | 57          | 8,735       |
+-------------+-------------+-------------+-------------+-------------+
| 2002/03     | 6,569       | 2,145       | 68          | 8,782       |
+-------------+-------------+-------------+-------------+-------------+
| 2003/04     | 6,614       | 2,057       | 51          | 8,722       |
+-------------+-------------+-------------+-------------+-------------+
| 2004/05     | 6,619       | 1,966       | 81          | 8,666       |
+-------------+-------------+-------------+-------------+-------------+
| 2005/06 c/  | 6,510       | 1,996       | 73          | 8,579       |
+-------------+-------------+-------------+-------------+-------------+
| 2006/07 c/  | 7,000       | 2,000       | 75          | 9,075       |
+-------------+-------------+-------------+-------------+-------------+

Source: Korean Feed Association (KFA), Korea Corn Processing Industry
Association (KOCPIA)

a/ Used for wet and dry milling process based on imported corn.

b/ For on-farm human consumption (on-the-cob) or snack food consumed
on-the-cob, as puffed kernels or as corn tea. Imported white corn for
popping has been included since MY 2004.

c/ FAS Seoul forecast.

+----------------+----------------+-----------------+-----------------+
| ##             |                |                 |                 |
| Korea: Compoun |                |                 |                 |
| d Feed Product |                |                 |                 |
| ion per Animal |                |                 |                 |
|                |                |                 |                 |
| (Octo          |                |                 |                 |
| ber/September, |                |                 |                 |
| 1,000 MT)      |                |                 |                 |
+----------------+----------------+-----------------+-----------------+
| Animal Type    | MY 2003/04     | MY 2004/05      | MY 2005/06      |
+----------------+----------------+-----------------+-----------------+
| Poultry        | 3,796          | 4,188           | 4,238           |
+----------------+----------------+-----------------+-----------------+
| Swine          | 5,473          | 5,244           | 5,176           |
+----------------+----------------+-----------------+-----------------+
| Cattle         | 4,713          | 4,812           | 5,096           |
+----------------+----------------+-----------------+-----------------+
| Others b/      | 866            | 815             | 898             |
+----------------+----------------+-----------------+-----------------+
| Total          | 14,848         | 15,059          | 15,408          |
+----------------+----------------+-----------------+-----------------+

a/ FAS/ Seoul forecast

b/ include ducks, pet food, rabbit, horse, sheep, deer, quail etc.

Source: Korea Feed Association (KFA)

+-------------------+----------+-----------+-----------+-------------+
| ## Kore           |          |           |           |             |
| a: Feed Ingredien |          |           |           |             |
| t Use for Compoun |          |           |           |             |
| d Feed Production |          |           |           |             |
|                   |          |           |           |             |
| (O                |          |           |           |             |
| ctober/September, |          |           |           |             |
| 1,000 MT)         |          |           |           |             |
+-------------------+----------+-----------+-----------+-------------+
| Items             | MY       | MY        | MY        | MY 2006/07  |
|                   | 2003/04  | 2004/05   | 2005/06   | ^a/^        |
+-------------------+----------+-----------+-----------+-------------+
| **Sub. Total      | *        | **9,891** | *         | **10,100**  |
| Grains and Grain  | *9,831** |           | *10,118** |             |
| Substitutes**     |          |           |           |             |
+-------------------+----------+-----------+-----------+-------------+
| \- Wheat          | 859      | 1,153     | 1,440     | 1,000       |
+-------------------+----------+-----------+-----------+-------------+
| \- Corn           | 6,614    | 6,619     | 6,510     | 7,000       |
+-------------------+----------+-----------+-----------+-------------+
| \- Rye            | 107      | 1         | 0         | 2,100       |
+-------------------+----------+-----------+-----------+-------------+
| -Barley           | 27       | 25        | 27        |             |
+-------------------+----------+-----------+-----------+-------------+
| \- Other Grains   | 2,224    | 2,093     | 2,141     |             |
| and Grain         |          |           |           |             |
| Substitute        |          |           |           |             |
+-------------------+----------+-----------+-----------+-------------+
| **Others**        | *        | **5,219** | **5,351** | **5,400**   |
|                   | *5,105** |           |           |             |
+-------------------+----------+-----------+-----------+-------------+
| **Grand Total**   | **       | *         | *         | **15,500**  |
|                   | 14,936** | *15,110** | *15,469** |             |
+-------------------+----------+-----------+-----------+-------------+

a/ FAS Seoul forecast.

Source: Korea Feed Association (KFA)

# RICE

## 

## ![](media/image6.wmf)Rice, Milled PSD

# Production

In September, the Korean Ministry of Agriculture and Forestry (MAF)
conducted a nationwide survey of 9,000 rice producers to gauge domestic
rice production for 2006. Survey results indicated minimal declines in
planted acreage and average yields compared to last year. Based on these
survey results, MAF has revised its 2006 rice production estimate
slightly downward to 4.64 million metric tons (MMT), down 2.8 percent
from last year. MAF will release its final production estimate in mid
November shortly after the rice harvest is completed.

Between October and December 2006, the Korean government plans to
purchase 504,000 MT (milled basis) as part of the Public Storage System
for Emergencies (PSSE). Of note, the planned purchased amount represents
11 percent of the 2006 rice crop estimate. Under this support program,
the government purchases the rice at the current market price and then
later sales the rice during non-harvest periods at the new market price.

+--------------+---------------+-----------------+--------------------+
| ## Ko        |               |                 |                    |
| rea: Rice Ar |               |                 |                    |
| ea, Yield an |               |                 |                    |
| d Production |               |                 |                    |
+--------------+---------------+-----------------+--------------------+
| Crop         | Area          | Yield           | Production         |
|              |               |                 |                    |
| Year         | (1,00HA)      | (KG/10A)        | (Milled, 1,000 MT) |
+--------------+---------------+-----------------+--------------------+
| 1991         | 1,209         | 446             | 5,385              |
+--------------+---------------+-----------------+--------------------+
| 1992         | 1,157         | 461             | 5,331              |
+--------------+---------------+-----------------+--------------------+
| 1993 a/      | 1,136         | 418             | 4,750              |
+--------------+---------------+-----------------+--------------------+
| 1994         | 1,103         | 459             | 5,060              |
+--------------+---------------+-----------------+--------------------+
| 1995 b/      | 1,056         | 445             | 4,694              |
+--------------+---------------+-----------------+--------------------+
| 1996         | 1,050         | 507             | 5,323              |
+--------------+---------------+-----------------+--------------------+
| 1997         | 1,052         | 518             | 5,449              |
+--------------+---------------+-----------------+--------------------+
| 1998         | 1,059         | 482             | 5,097              |
+--------------+---------------+-----------------+--------------------+
| 1999         | 1,066         | 495             | 5,263              |
+--------------+---------------+-----------------+--------------------+
| 2000         | 1,072         | 497             | 5,291              |
+--------------+---------------+-----------------+--------------------+
| 2001         | 1,083         | 516             | 5,515              |
+--------------+---------------+-----------------+--------------------+
| 2002 c/      | 1,053         | 471             | 4,927              |
+--------------+---------------+-----------------+--------------------+
| 2003 d/      | 1,016         | 441             | 4,451              |
+--------------+---------------+-----------------+--------------------+
| 2004         | 1,001         | 504             | 5,000              |
+--------------+---------------+-----------------+--------------------+
| 2005         | 980           | 490             | 4,768              |
+--------------+---------------+-----------------+--------------------+
| 2006 e/      | 955           | 489             | 4,636              |
+--------------+---------------+-----------------+--------------------+

Source: MAF

a/ Wet and unseasonably cool weather during the summer

b/ Flood damage in August in the central regions and unfavorable weather
throughout the peninsula during the latter part of the growing season

c/ Heavy rains during the summer and the effects of typhoon Rusa (Aug 31
-- Sep 1)

d/ Cool and rainy days during the growing season and the effects of
typhoon Maemi

(Sep 9 - 12)

e/ September 15 crop survey estimate by MAF's National Agricultural
Products Quality Management Service (NAQS)

+----------------+----------------+------------+---+--------+-------+
| ## Government  |                |            |   |        |       |
| Rice Purchases |                |            |   |        |       |
|  for Public St |                |            |   |        |       |
| orage System f |                |            |   |        |       |
| or Emergencies |                |            |   |        |       |
+----------------+----------------+------------+---+--------+-------+
| Crop Year      | Production     | Purchase   | \ | Price  |       |
|                |                |            | % | a/     |       |
|                | (1,000 MT)     | (1,000 MT) |   |        |       |
+----------------+----------------+------------+---+--------+-------+
|                |                |            |   | Korean | US    |
|                |                |            |   | Won/Kg | \$/MT |
|                |                |            |   |        |       |
|                |                |            |   |        | b/    |
+----------------+----------------+------------+---+--------+-------+
| 1996           | 5,323          | 1,267      | 2 | 1,725  | 2,144 |
|                |                |            | 4 |        |       |
+----------------+----------------+------------+---+--------+-------+
| 1997           | 5,449          | 1,224      | 2 | 1,725  | 1,816 |
|                |                |            | 2 |        |       |
+----------------+----------------+------------+---+--------+-------+
| 1998           | 5,097          | 928        | 1 | 1,818  | 1,296 |
|                |                |            | 8 |        |       |
+----------------+----------------+------------+---+--------+-------+
| 1999           | 5,263          | 876        | 1 | 1,911  | 1,607 |
|                |                |            | 7 |        |       |
+----------------+----------------+------------+---+--------+-------+
| 2000           | 5,291          | 906        | 1 | 2,016  | 1,784 |
|                |                |            | 7 |        |       |
+----------------+----------------+------------+---+--------+-------+
| 2001           | 5,515          | 828        | 1 | 2,097  | 1,625 |
|                |                |            | 5 |        |       |
+----------------+----------------+------------+---+--------+-------+
| 2002           | 4,927          | 789        | 1 | 2,097  | 1,675 |
|                |                |            | 6 |        |       |
+----------------+----------------+------------+---+--------+-------+
| 2003           | 4,451          | 750        | 1 | 2,097  | 1,760 |
|                |                |            | 7 |        |       |
+----------------+----------------+------------+---+--------+-------+
| 2004           | 5,000          | 711        | 1 | 2,097  | 1,833 |
|                |                |            | 4 |        |       |
+----------------+----------------+------------+---+--------+-------+
| 2005 c/        | 4,768          | 719        | 1 | 2,072  | 2,023 |
|                |                |            | 5 |        |       |
+----------------+----------------+------------+---+--------+-------+
| 2006 d/        | 4,636          | 504        | 1 | na     | na    |
|                |                |            | 1 |        |       |
+----------------+----------------+------------+---+--------+-------+

Source: MAF

a/ #1 grade basis

b/ Applied exchange rate is on the annual weighted average

c/ Includes the portion of direct payment for income compensation

d/ Preliminary

# Production Policy 

In 2007, under the Direct Payment Program for Rice Income Compensation,
MAF plans to spend a record 2.42 trillion won (US\$2.56 billion), up 24
percent from the prior year. The planned support payments will account
for 20 percent of MAF's total 2007 budget of 12.13 trillion won. As part
of this newly instituted program, Korean rice farmers receive two income
support payments, an area payment and a deficiency payment. These
support payments are intended to counter the perceived financial
challenges associated with the gradual opening of the Korean market to
imported rice.

**Area Payment (Fixed direct payments):** The total area qualifying for
payment is defined as the average area where rice had been produced
during the 1998-2001 base period. The 2006 area payment is 700,000 won
per hectare, up 100,000 won from the previous year.

**Deficiency Payment (Variable direct payments):** A deficiency payment
is provided to farmers based on the difference between a target price
and the average market price during the harvest season (Oct-Dec). In
2005, the deficiency payment amounted to slightly over 196 won (19
cents) per Kg on a milled rice basis. The payment is 85 percent of the
difference between the national-average market price during the 2005
harvest season and the 2005 target price, less the area payment.

The national-average market price during the 2005 harvest was 1,750 won
(US\$ 1.71) per Kg (milled basis). The target price was set at Korean
Won 2,126 (US\$ 2.08) per Kg (milled basis) based on the average price
for the past three years, and is applicable for crop years 2005 - 2007.
Of note, the target price will be revised every three years through a
review/approval process in the National Assembly. The area payment of
600,000 won is converted to a per Kg equivalent by dividing it by the
1999-2003 Olympic average yields[^1] as shown below:

\[(Target Price - Average Harvest Price)X .85\] - Area Payment per
ha/Olympic average per ha

\[(W 2126.04 --W1,750.35) X .85\] -- W600,000/4,880 kg = W 196.39

+----+------+-------+------+--------+-------+------+------+----------+
| ## |      |       |      |        |       |      |      |          |
|  D |      |       |      |        |       |      |      |          |
| ir |      |       |      |        |       |      |      |          |
| ec |      |       |      |        |       |      |      |          |
| t  |      |       |      |        |       |      |      |          |
| Pa |      |       |      |        |       |      |      |          |
| ym |      |       |      |        |       |      |      |          |
| en |      |       |      |        |       |      |      |          |
| t  |      |       |      |        |       |      |      |          |
| Pr |      |       |      |        |       |      |      |          |
| og |      |       |      |        |       |      |      |          |
| ra |      |       |      |        |       |      |      |          |
| m  |      |       |      |        |       |      |      |          |
| fo |      |       |      |        |       |      |      |          |
| r  |      |       |      |        |       |      |      |          |
| Ri |      |       |      |        |       |      |      |          |
| ce |      |       |      |        |       |      |      |          |
|  I |      |       |      |        |       |      |      |          |
| nc |      |       |      |        |       |      |      |          |
| om |      |       |      |        |       |      |      |          |
| e  |      |       |      |        |       |      |      |          |
| Co |      |       |      |        |       |      |      |          |
| mp |      |       |      |        |       |      |      |          |
| en |      |       |      |        |       |      |      |          |
| sa |      |       |      |        |       |      |      |          |
| ti |      |       |      |        |       |      |      |          |
| on |      |       |      |        |       |      |      |          |
+----+------+-------+------+--------+-------+------+------+----------+
| Ye | Area |       |      | Defi   |       |      | T    | Go       |
| ar | Pay  |       |      | ciency |       |      | otal | vernment |
|    | ment |       |      | P      |       |      |      |          |
|    | (A)  |       |      | ayment |       |      | (Bil | Budget   |
|    |      |       |      | (B)    |       |      | lion |          |
|    |      |       |      |        |       |      | Won) | (Billion |
|    |      |       |      |        |       |      |      | Won)     |
|    |      |       |      |        |       |      | (A)  |          |
|    |      |       |      |        |       |      | +(B) |          |
+----+------+-------+------+--------+-------+------+------+----------+
|    | Area | Pa    | T    | Prod   | Pa    | T    |      |          |
|    |      | yment | otal | uction | yment | otal |      |          |
|    | (1   |       |      |        |       |      |      |          |
|    | ,000 | (Wo   | (Bil | (1,000 | (Wo   | (Bil |      |          |
|    | HA)  | n/HA) | lion | MT)    | n/Kg) | lion |      |          |
|    | ^1/^ |       | Won) | ^2/^   |       | Won) |      |          |
+----+------+-------+------+--------+-------+------+------+----------+
|    |      |       |      |        |       |      |      |          |
+----+------+-------+------+--------+-------+------+------+----------+
| 20 | 1    | 60    | 6    | 4,600  | 196.4 | 9    | 1,5  | 1,600    |
| 05 | ,006 | 0,000 | 03.8 |        |       | 01.5 | 05.3 |          |
+----+------+-------+------+--------+-------+------+------+----------+
| 20 | 1    | 70    | 7    | 4,600  | Na    | Na   | Na   | 1,942    |
| 06 | ,006 | 0,000 | 04.2 |        |       |      |      |          |
+----+------+-------+------+--------+-------+------+------+----------+
| 20 | 1    | Na    | Na   | 4,600  | Na    | Na   | Na   | 2,420    |
| 07 | ,006 |       |      |        |       |      |      |          |
+----+------+-------+------+--------+-------+------+------+----------+

Source: FAS/Seoul estimate based on MAF data

1/ Those eligible for payment include farmers, farming union
corporations, agricultural corporations, or anyone producing rice on a
minimum of 0.1 HA of farmland between Jan 1, 1998 and Dec 31, 2000

2/ Olympic average rice yield is 4,880 Kg per hectare

# Consumption 

Despite a growing population, per capita rice consumption continues to
decline due to changes in eating habits. These changes are due in part
to rising incomes and the growing popularity of Western foods.

+---------------------------+-------------+-------------+-------------+
| ## Korea: Rice Dom        |             |             |             |
| estic Utilization Pattern |             |             |             |
|                           |             |             |             |
| (1,000 MT)                |             |             |             |
+---------------------------+-------------+-------------+-------------+
| Rice Year (Nov.- Oct.)    | MY 2004/05  | MY 2005/06  | MY 2006/07  |
|                           | ^a/^        | ^b/^        | ^c/^        |
+---------------------------+-------------+-------------+-------------+
| Table Rice                | 3,897       | 3,856       | 3,820       |
+---------------------------+-------------+-------------+-------------+
| Processing                | 324         | 365         | 400         |
+---------------------------+-------------+-------------+-------------+
| Seed                      | 42          | 41          | 41          |
+---------------------------+-------------+-------------+-------------+
| Others included loss      | 653         | 593         | 600         |
+---------------------------+-------------+-------------+-------------+
| Total Demand              | 4,916       | 4,855       | 4,861       |
+---------------------------+-------------+-------------+-------------+
| Per Capita Consumption    | 80.7        | 79.5        | 78.4        |
| (Kg) d/                   |             |             |             |
+---------------------------+-------------+-------------+-------------+
| Population (1,000)        | 48,294      | 48,500      | 48,700      |
+---------------------------+-------------+-------------+-------------+

Source: MAF

a/ MAF Revised

b/ MAF Preliminary

c/ FAS/Seoul Forecast

d/ Based on table rice

# Trade

Under the 2006 Minimum Market Access Agreement (MMA), Korea plans to
purchase 245,922 MT of rice (milled) through international open tenders
in late 2006. Nearly 85 percent or 205,228 MT of the total purchase will
be imported from nations with country specific quotas (CSQs), including
the United States, China, Thailand and Australia. The remainder, 40,694
MT will be distributed as part of the global quota.

MAF has divided the 2006 MMA into seven tranches, which are managed by
two State Trading Enterprises, the Korea Agro-Fisheries Trading
Corporation (aT) and the Public Procurement Service (PPS).

+--------+-------+--------+-------+-------+-------+--------+--------+
| 2006   |       |        |       |       |       |        |        |
| MMA    |       |        |       |       |       |        |        |
| Rice   |       |        |       |       |       |        |        |
| Allo   |       |        |       |       |       |        |        |
| cation |       |        |       |       |       |        |        |
|        |       |        |       |       |       |        |        |
| (MT,   |       |        |       |       |       |        |        |
| milled |       |        |       |       |       |        |        |
| rice)  |       |        |       |       |       |        |        |
+--------+-------+--------+-------+-------+-------+--------+--------+
| Ca     | Total | Global | Co    |       |       |        |        |
| lendar |       | Quota  | untry |       |       |        |        |
| Year   |       | (MFN)  | Spe   |       |       |        |        |
|        |       |        | cific |       |       |        |        |
|        |       |        | Quota |       |       |        |        |
|        |       |        | (     |       |       |        |        |
|        |       |        | CSQs) |       |       |        |        |
+--------+-------+--------+-------+-------+-------+--------+--------+
|        |       |        | Total | USA   | China | Th     | Aus    |
|        |       |        |       |       |       | ailand | tralia |
+--------+-------+--------+-------+-------+-------+--------+--------+
| 2005   | 22    | 20     | 20    | 5     | 11    | 29,963 | 9,030  |
|        | 5,575 | ,347a/ | 5,228 | 0,076 | 6,159 |        |        |
+--------+-------+--------+-------+-------+-------+--------+--------+
| 2006   | 24    | 40,694 | 20    | 5     | 11    | 29,963 | 9,030  |
|        | 5,922 |        | 5,228 | 0,076 | 6,159 |        |        |
+--------+-------+--------+-------+-------+-------+--------+--------+

Source: MAF and aT

A/ Of the total global quota, the United States received an allocation
of 6,104 MT, while China and Thailand received an allocation of 11,192
MT and 3,052 MT, respectively.

**Country Specific Quota (CSQs):** The table rice portion of the 2006
MMA is 34,429 MT (milled), or 14 percent of the total MMA. The amount of
table rice as part of the overall MMA will continue to grow by 4
percentage points annually until it reaches 30 percent in 2010, at which
time it will remain fixed until the MMA expires in 2014. As the
allocation amount of table rice increases over time, there will be a
corresponding decrease in the allocated amount for processing rice.
Under the 2006 MMA, the United State's CSQ allocation for table and
processing rice is 10,414 MT and 39,662 MT, respectively.

Based on the 2005 MMA auction results, MAF made two important
modifications to the 2006 MMA. First, MAF decided to boost the table
rice allocation rate for the United States and China due to slow Thai
table rice auctions in the 2005 MMA. As a result, the US and China's
table rice 2006 allocations are now 30.3 percent and 62.4 percent,
respectively. Second, MAF decided to increase the percentage of imports
of U.S. rice #1 grade to 60 percent, up from 50 percent in the 2005 MMA.
The remaining 40 percent of U.S. table rice will remain #3 grade.

+-----------+-----------+-----------+-----------+-----------+-----------+
| 2006      |           |           |           |           |           |
| Table     |           |           |           |           |           |
| Rice      |           |           |           |           |           |
| A         |           |           |           |           |           |
| llocation |           |           |           |           |           |
| Based on  |           |           |           |           |           |
| CSQ       |           |           |           |           |           |
|           |           |           |           |           |           |
| (MT,      |           |           |           |           |           |
| milled    |           |           |           |           |           |
| rice)     |           |           |           |           |           |
+-----------+-----------+-----------+-----------+-----------+-----------+
|           | USA       | China     | Thailand  | Australia | Total     |
+-----------+-----------+-----------+-----------+-----------+-----------+
| 2005      | 5,504     | 12,767    | 3,293     | 993       | 22,557    |
+-----------+-----------+-----------+-----------+-----------+-----------+
| \%        | 24.4      | 56.6      | 14.6      | 4.4       | 100       |
+-----------+-----------+-----------+-----------+-----------+-----------+
| 2006      | 10,414    | 21,500    | 1,000     | 1,515     | 34,429    |
+-----------+-----------+-----------+-----------+-----------+-----------+
| \%        | 30.3      | 62.4      | 2.9       | 4.4       | 100       |
+-----------+-----------+-----------+-----------+-----------+-----------+

Source: MAF

+-----------+-----------+-----------+-----------+-----------+-----------+
| 2006      |           |           |           |           |           |
| P         |           |           |           |           |           |
| rocessing |           |           |           |           |           |
| Rice      |           |           |           |           |           |
| A         |           |           |           |           |           |
| llocation |           |           |           |           |           |
| Based on  |           |           |           |           |           |
| CSQ       |           |           |           |           |           |
|           |           |           |           |           |           |
| (MT,      |           |           |           |           |           |
| milled    |           |           |           |           |           |
| rice)     |           |           |           |           |           |
+-----------+-----------+-----------+-----------+-----------+-----------+
|           | USA       | China     | Thailand  | Australia | Total     |
+-----------+-----------+-----------+-----------+-----------+-----------+
| 2005      | 44,572    | 103,392   | 26,670    | 8,037     | 182,671   |
+-----------+-----------+-----------+-----------+-----------+-----------+
| \%        | 24.4      | 56.6      | 14.6      | 4.4       | 100       |
+-----------+-----------+-----------+-----------+-----------+-----------+
| 2006      | 39,662    | 94,659    | 28,963    | 7,515     | 170,799   |
+-----------+-----------+-----------+-----------+-----------+-----------+
| \%        | 23.2      | 55.4      | 17        | 4.4       | 100       |
+-----------+-----------+-----------+-----------+-----------+-----------+

Source: MAF

**Global Quota:** Under the 2006 global quota, Korea will import 40,694
MT of rice (milled) rice for processing, including medium, short and
long grain varieties. In the October 11, 2006 global quota tender, Korea
only purchased Chinese long grain brown rice of 6,782 MT (equivalent to
6,104 MT, milled) for \$345/MT CIP from COFCO/China with delivery by
January 15, 2007. U.S. rice exporters were reluctant to participate in
the bidding due to uncertainties over Non-GMO certification. The
re-tender of the global quota for short and medium grain rice from other
origins is expected in the near future.

+-------------+-------------+-------------+-------------+-------------+
| 2006 Global |             |             |             |             |
| Quota       |             |             |             |             |
| Allocation  |             |             |             |             |
| per Rice    |             |             |             |             |
| Variety     |             |             |             |             |
|             |             |             |             |             |
| (MT, milled |             |             |             |             |
| rice)       |             |             |             |             |
+-------------+-------------+-------------+-------------+-------------+
|             | Medium      | Short Grain | Long Grain  | Total       |
|             | Grain       |             |             |             |
+-------------+-------------+-------------+-------------+-------------+
| 2005        | 6,104       | 11,192      | 3,052       | 20,347      |
+-------------+-------------+-------------+-------------+-------------+
| \%          | 30          | 55          | 15          | 100         |
+-------------+-------------+-------------+-------------+-------------+
| 2006        | 13,022      | 21,568      | 6,104       | 40,694      |
+-------------+-------------+-------------+-------------+-------------+
| \%          | 32          | 53          | 15          | 100         |
+-------------+-------------+-------------+-------------+-------------+

Source: MAF

**GMO Rice Issue**: MAF requires all rice shipments to be accompanied by
a Non-GMO certificate. Korea's Food and Drug Administration (KFDA) plans
to test incoming shipments for the presence GM materials. If KFDA
confirms its presence, the shipment shall be destroyed or shipped back
at the contractor's expense. Also, the payment for the rice, if any
previously made, shall be returned.

**Rice Exports:** In 2006, the Korean government approved a total
donation of 100,000 MT of domestic milled rice as part of an aid package
to help North Korea (Democratic People's Republic of Korea---DPRK) to
recover from flooding experienced during the summer of 2006. However,
only 89,500 MT was delivered before aid was suspended after North Korea
conducted its nuclear test.

+------------+----------+----------+----------+----------+----------+
| ##         |          |          |          |          |          |
| Korea: Ric |          |          |          |          |          |
| e Aid to N |          |          |          |          |          |
| orth Korea |          |          |          |          |          |
|            |          |          |          |          |          |
| (Unit: MT, |          |          |          |          |          |
| Domestic   |          |          |          |          |          |
| Rice)      |          |          |          |          |          |
+------------+----------+----------+----------+----------+----------+
| Month of   | CY 2002  | CY 2003  | CY 2004  | CY 2005  | CY 2006  |
| Shipment   |          |          |          |          |          |
+------------+----------+----------+----------+----------+----------+
| January    | 0        | 42,200   | 0        | 0        | 0        |
+------------+----------+----------+----------+----------+----------+
| February   | 0        | 0        | 0        | 0        | 0        |
+------------+----------+----------+----------+----------+----------+
| March      | 0        | 0        | 0        | 0        | 0        |
+------------+----------+----------+----------+----------+----------+
| April      | 0        | 0        | 5,000    | 0        | 0        |
+------------+----------+----------+----------+----------+----------+
| May        | 0        | 0        | 0        | 0        | 0        |
+------------+----------+----------+----------+----------+----------+
| June       | 0        | 0        | 0        | 0        | 0        |
+------------+----------+----------+----------+----------+----------+
| July       | 0        | 76,534   | 15,926   | 13,000   | 0        |
+------------+----------+----------+----------+----------+----------+
| August     | 0        | 80,231   | 30,114   | 83,450   | 300a/    |
+------------+----------+----------+----------+----------+----------+
| September  | 24,100   | 64,935   | 30,955   | 67,550   | 85,200a/ |
+------------+----------+----------+----------+----------+----------+
| October    | 102,100  | 72,800   | 23,085   | 104,500  | 4,000a/  |
+------------+----------+----------+----------+----------+----------+
| November   | 108,800  | 78,400   | 0        | 81,800   | 0        |
+------------+----------+----------+----------+----------+----------+
| December   | 122,800  | 27,100   | 0        | 49,700   | 0        |
+------------+----------+----------+----------+----------+----------+
| Total      | 357,800  | 442,200  | 105,080  | 400,000  | 89,500   |
+------------+----------+----------+----------+----------+----------+
|            |          |          |          |          |          |
+------------+----------+----------+----------+----------+----------+
| Marketing  | MY       | MY       | MY       | MY       | MY       |
| Year       | 2001/02  | 2002/03  | 2003/04  | 2004/05  | 2005/06  |
| (Nov/Oct)  |          |          |          |          |          |
+------------+----------+----------+----------+----------+----------+
|            | 126,200  | 568,300  | 210,500  | 268,500  | 221,000  |
+------------+----------+----------+----------+----------+----------+

a/ Flood aid

Source: Ministry of Unification

# Appendix:

+--------+--------+--------+--------+--------+--------+--------+--------+
| ##     |        |        |        |        |        |        |        |
| Korea: |        |        |        |        |        |        |        |
|  Alloc |        |        |        |        |        |        |        |
| ation  |        |        |        |        |        |        |        |
| of the |        |        |        |        |        |        |        |
|  MMA f |        |        |        |        |        |        |        |
| or 200 |        |        |        |        |        |        |        |
| 5-2014 |        |        |        |        |        |        |        |
|        |        |        |        |        |        |        |        |
| (MT,   |        |        |        |        |        |        |        |
| milled |        |        |        |        |        |        |        |
| rice)  |        |        |        |        |        |        |        |
+--------+--------+--------+--------+--------+--------+--------+--------+
| Ca     | Total  | Global | C      |        |        |        |        |
| lendar |        | Quota  | ountry |        |        |        |        |
| Year   |        |        | Sp     |        |        |        |        |
|        |        |        | ecific |        |        |        |        |
|        |        |        | Quota  |        |        |        |        |
|        |        |        | (CSQs) |        |        |        |        |
+--------+--------+--------+--------+--------+--------+--------+--------+
|        |        |        | Total  | USA    | China  | Th     | Aus    |
|        |        |        |        |        |        | ailand | tralia |
+--------+--------+--------+--------+--------+--------+--------+--------+
| 2005   | 2      | 20,3   | 2      | 50,076 | 1      | 29,963 | 9,030  |
|        | 25,575 | 47^a/^ | 05,228 |        | 16,159 |        |        |
+--------+--------+--------+--------+--------+--------+--------+--------+
| 2006   | 2      | 40,694 | 2      | 50,076 | 1      | 29,963 | 9,030  |
|        | 45,922 |        | 05,228 |        | 16,159 |        |        |
+--------+--------+--------+--------+--------+--------+--------+--------+
| 2007   | 2      | 61,041 | 2      | 50,076 | 1      | 29,963 | 9,030  |
|        | 66,269 |        | 05,228 |        | 16,159 |        |        |
+--------+--------+--------+--------+--------+--------+--------+--------+
| 2008   | 2      | 81,388 | 2      | 50,076 | 1      | 29,963 | 9,030  |
|        | 86,616 |        | 05,228 |        | 16,159 |        |        |
+--------+--------+--------+--------+--------+--------+--------+--------+
| 2009   | 3      | 1      | 2      | 50,076 | 1      | 29,963 | 9,030  |
|        | 06,963 | 01,735 | 05,228 |        | 16,159 |        |        |
+--------+--------+--------+--------+--------+--------+--------+--------+
| 2010   | 3      | 1      | 2      | 50,076 | 1      | 29,963 | 9,030  |
|        | 27,310 | 22,082 | 05,228 |        | 16,159 |        |        |
+--------+--------+--------+--------+--------+--------+--------+--------+
| 2011   | 3      | 1      | 2      | 50,076 | 1      | 29,963 | 9,030  |
|        | 47,657 | 42,429 | 05,228 |        | 16,159 |        |        |
+--------+--------+--------+--------+--------+--------+--------+--------+
| 2012   | 3      | 1      | 2      | 50,076 | 1      | 29,963 | 9,030  |
|        | 68,004 | 62,776 | 05,228 |        | 16,159 |        |        |
+--------+--------+--------+--------+--------+--------+--------+--------+
| 2013   | 3      | 1      | 2      | 50,076 | 1      | 29,963 | 9,030  |
|        | 88,351 | 83,123 | 05,228 |        | 16,159 |        |        |
+--------+--------+--------+--------+--------+--------+--------+--------+
| 2014   | 4      | 2      | 2      | 50,076 | 1      | 29,963 | 9,030  |
|        | 08,698 | 03,470 | 05,228 |        | 16,159 |        |        |
+--------+--------+--------+--------+--------+--------+--------+--------+

Source: MAF

A/ Of the total global quota, the United States received an allocation
of 6,104 MT, while China and Thailand received an allocation of 11,192
MT and 3,052 MT, respectively.

+-------------+-----------------+---------------+---------------------+
| ## Kor      |                 |               |                     |
| ea: Import  |                 |               |                     |
| Schedule of |                 |               |                     |
|  Table Rice |                 |               |                     |
|             |                 |               |                     |
| (Milled     |                 |               |                     |
| Rice, MT)   |                 |               |                     |
+-------------+-----------------+---------------+---------------------+
| Calendar    | Total           | Table Purpose | Rate of Table Rice  |
| Year        |                 |               | (%)                 |
+-------------+-----------------+---------------+---------------------+
| 2005        | 225,575         | 22,558        | 10                  |
+-------------+-----------------+---------------+---------------------+
| 2006        | 245,922         | 34,429        | 14                  |
+-------------+-----------------+---------------+---------------------+
| 2007        | 266,269         | 47,928        | 18                  |
+-------------+-----------------+---------------+---------------------+
| 2008        | 286,616         | 63,056        | 22                  |
+-------------+-----------------+---------------+---------------------+
| 2009        | 306,963         | 79,810        | 26                  |
+-------------+-----------------+---------------+---------------------+
| 2010        | 327,310         | 98,193        | 30                  |
+-------------+-----------------+---------------+---------------------+
| 2011        | 347,657         | 104,297       | 30                  |
+-------------+-----------------+---------------+---------------------+
| 2012        | 368,004         | 110,401       | 30                  |
+-------------+-----------------+---------------+---------------------+
| 2013        | 388,351         | 116,505       | 30                  |
+-------------+-----------------+---------------+---------------------+
| 2014        | 408,698         | 122,609       | 30                  |
+-------------+-----------------+---------------+---------------------+

Source: MAF

+--------+---------+--------+--------+-------+-------+-------+-------+
| ##     |         |        |        |       |       |       |       |
|  Korea |         |        |        |       |       |       |       |
| : Rice |         |        |        |       |       |       |       |
|  alloc |         |        |        |       |       |       |       |
| ation  |         |        |        |       |       |       |       |
| per Co |         |        |        |       |       |       |       |
| untry  |         |        |        |       |       |       |       |
| on the |         |        |        |       |       |       |       |
|  buyin |         |        |        |       |       |       |       |
| g tend |         |        |        |       |       |       |       |
| er und |         |        |        |       |       |       |       |
| er MMA |         |        |        |       |       |       |       |
|        |         |        |        |       |       |       |       |
| (      |         |        |        |       |       |       |       |
| Milled |         |        |        |       |       |       |       |
| basis, |         |        |        |       |       |       |       |
| MT)    |         |        |        |       |       |       |       |
+--------+---------+--------+--------+-------+-------+-------+-------+
| Ca     | MMA     | U.S.A. | China  | Tha   | India | Vi    | Aust  |
| lendar |         |        |        | iland |       | etnam | ralia |
| Year   | Quota   |        |        |       |       |       |       |
+--------+---------+--------+--------+-------+-------+-------+-------+
| 1995   | 51,307  | 0      | 0      | 0     | 5     | 0     | 0     |
|        |         |        |        |       | 1,307 |       |       |
+--------+---------+--------+--------+-------+-------+-------+-------+
| 1996   | 64,134  | 0      | 64,134 | 0     | 0     | 0     | 0     |
+--------+---------+--------+--------+-------+-------+-------+-------+
| 1997   | 76,961  | 0      | 58,961 | 1     | 0     | 0     | 0     |
|        |         |        |        | 8,000 |       |       |       |
+--------+---------+--------+--------+-------+-------+-------+-------+
| 1998   | 89,787  | 0      | 83,478 | 6,300 | 0     | 0     | 0     |
+--------+---------+--------+--------+-------+-------+-------+-------+
| 1999   | 102,614 | 0      | 80,114 | 1     | 0     | 9,000 | 0     |
|        |         |        |        | 3,500 |       |       |       |
+--------+---------+--------+--------+-------+-------+-------+-------+
| 2000   | 102,614 | 0      | 84,614 | 1     | 0     | 0     | 0     |
|        |         |        |        | 8,000 |       |       |       |
+--------+---------+--------+--------+-------+-------+-------+-------+
| 2001   | 128,268 | 27,000 | 63,000 | 1     | 0     | 0     | 2     |
|        |         |        |        | 8,000 |       |       | 0,268 |
+--------+---------+--------+--------+-------+-------+-------+-------+
| 2002   | 153,921 | 36,000 | 95,421 | 2     | 0     | 0     | 0     |
|        |         |        |        | 2,500 |       |       |       |
+--------+---------+--------+--------+-------+-------+-------+-------+
| 2003   | 179,575 | 49,500 | 1      | 2     | 0     | 0     | 0     |
|        |         |        | 03,075 | 7,000 |       |       |       |
+--------+---------+--------+--------+-------+-------+-------+-------+
| 2004   | 205,228 | 58,500 | 1      | 2     | 0     | 0     | 0     |
|        |         |        | 17,028 | 9,700 |       |       |       |
+--------+---------+--------+--------+-------+-------+-------+-------+
| 2005   | 225,575 | 56,180 | 1      | 3     | 0     | 0     | 9,030 |
|        |         |        | 27,351 | 3,015 |       |       |       |
+--------+---------+--------+--------+-------+-------+-------+-------+
| Total  | 1,      | 2      | 8      | 18    | 5     | 9,000 | 2     |
|        | 379,984 | 27,180 | 77,185 | 6,015 | 1,307 |       | 9,298 |
+--------+---------+--------+--------+-------+-------+-------+-------+

Source: FAS/Seoul

[^1]: The Olympic average is calculated by excluding the highest and
    lowest years during the 1999-2003 base period and then averaging
    yearly production for the three remaining reference years.