Boston, MA -- (SBWIRE) -- 04/15/2014 -- We hold a positive outlook towards the long term prospects of South Korea's agricultural sector. Our positive outlook towards the sector is based on the government's decision to gradually remove barriers to trade and move up the value chain. Indeed, the expansion of education and financial support for farmers to allow them entry into the food processing business, as well as plans to revitalise agriculture tourism, will yield results for the industry over the longer term and help it to remain relevant to the South Korean economy. Having said this, we are also concerned about the short term restructuring of the livestock industry due to a mismatch of domestic demand and supply of livestock. The most recent outbreak of the Highly Pathogenic Avian Influenza (HPAI, H5N8 type) also poses a significant threat to the production and consumption expectations for poultry meat.
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- Rice consumption growth to 2017/18: -10.1% to 4.1mn tonnes. As South Koreas substitute their carbohydrate intake with bread instead of rice, consumption of the grain is expected to fall in tandem with the changing diet.
- Corn consumption growth to 2018: 25.9% to 10.6mn tonnes. This will be buoyed by strong and steady demand from the animal feed sector. In particular, the swine feed sector should be the main consumer of corn for feed processing.
- Beef production growth to 2017/18: 14.3% to 384,000 tonnes. Even with the anticipated increase in local beef output, the country will remain reliant on imports to meet demand. Indeed, base effects are the key reason for the significant growth rate.
- 2014 BMI universe agribusiness market value: US$34.6bn (up from US$34.6bn in 2013; forecast to decline annually by 1.3% on average to 2018)
- 2014 real GDP growth: 3.0% year-on-year (y-o-y) (up from 2.1% in 2013; predicted to average 3.9% from 2013 until 2018).
- 2014 consumer price index: 1.85% y-o-y (up from 1.2% in 2013; predicted to average 2.7% to 2018)
- 2014 central bank policy rate: 2.75% (up from 2.5% in 2013; predicted to average 3.4% from 2013 until 2018).
The Korean government has implemented the rice purchasing plan for the 2014 Minimum Market Access (MMA) agreement. Under this plan, Korea intends to purchase 408,700 tonnes of milled rice, up 20,347 tonnes an increase of approximately 5% over last year.
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