BMI View: The South Korean agricultural sector holds a modestly subdued outlook over our forecast period . The livestock industry has been plagued by various disease outbreaks in the past that have largely been contained since . Government-led efforts will benefit the industry over the longer term and help it to remain relevant. These include the expansion of education and financial support for farmers to allow them entry into the food processing business; plans to modernise traditional methods of food production; the creation of new agricultur al food districts for exporters and the introduction of state designation of food exporting companies.
|Positive Growth Ahead|
|South Korea - Agribusiness Market Value & Agriculture Key Forecasts|
|e/f = BMI estimates/forecasts. Source: USDA, National Statistics, BMI|
Cheese consumption growth to 2020: 45.5% to 192,000 tonnes. As Western food has become more popular in Korea, demand for cheese has expanded rapidly. The majority of cheese is consumed in restaurants and fast food outlets, and comes in the form of processed cheese. Exporters with the lowest prices, such as the EU and US, have gained a market share in supplying the South Korean cheese industry.
Poultry meat production growth to 2019/20: 25.8% to 1.08mn tonnes. Poultry production will record relatively strong growth driven by increased export opportunities and as the country recovers from several outbreaks of avian influenza in 2013-2015
Rice consumption growth to 2020: 2.8% to 4.5mn tonnes. As South Koreans substitute their carbohydrate intake with bread instead of rice, consumption of the grain is expected to post only weak growth.
BMI universe agribusiness market value: USD34.39bn in 2017, up 4.6% compared with 2016, growth forecast to average 3.5% annually between 2017 and 2020.
2017 real GDP growth: 2.8%, up from 2.6% expected in 2016, forecast to average 3.2% between 2017 and 2020.
2017 consumer price inflation: 1.6% y-o-y ave, up from 1.2% expected in 2016, forecast to average 2.0% between 2017 and 2020.
2017 Central Bank Policy Rate: 1.25% y-o-y ave, up from 1.00% expected in 2016, forecast to average 1.50% between 2017 and 2020.
Latest Updates & Structural Trends
Production in the dairy sector will remain subdued in 2017 as farmers struggle with elevated production costs and stagnating raw milk prices. Manufacturers are facing increasing competition from imports after the country signed several FTAs with some of the largest dairy exporters, the EU and the US. Dairy consumption - including cheese, whole milk powder and fluid milk - will continue to grow at a faster pace than production in 2017.
Cheese is becoming increasingly popular in South Korea and consumption will be particularly strong in the coming years. The US and the EU are the main benefiters of the fast rise in South Korea's dairy imports. In fact, the EU became the largest dairy provider to South Korea in 2016, ahead of the US, while New Zealand and Australia's share in South Korea's dairy imports has been stagnating over recent years.
Meat production in South Korea will remain on its uptrend in 2017, with the exception of beef output which will decline for the fourth consecutive year in 2017. South Korea's meat consumption is expanding at a fast pace driven by the ongoing changes to habits and diet including the rise in quick-served food, food delivery and the switch from a grain-base diet to a meat and fruit base diet.
The rise in beef and pork meat we forecast in the coming years will mainly benefit South Korea's traditional meat suppliers the US, Australia and the EU. The US has regained access to the South Korean poultry market in 2016 as the government lifted the ban imposed on the US following the outbreak of avian influenza. It was reported in Q416 South Korea is now considering lifting the ban on Thai frozen chicken imports, put in place in 2004.
The South Korea Agribusiness Report features BMI Research's market assessment and independent forecasts for production, consumption and trade across core agricultural commodities.
BMI's South Korea Agribusiness Report includes independent commodity price forecasting and analysis for key agricultural outputs, an overview of the agribusiness competitive landscape and a discussion of the downstream context of agricultural production in relation to country food consumption forecasts and composite food and beverage trade forecasts.
- Use BMI's independent industry forecasts to test other views - a key input for successful planning in dynamic agribusiness markets.
- Apply BMI's medium-term commodity price analysis to assist with budgetary planning and the identification of investment opportunities and potential risks.
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BMI Industry View
Summary of BMI’s key industry forecasts and views, highlighting recent changes and key risks to the industry outlook.
Industry SWOT Analysis
Analysis of the major strengths, weaknesses, opportunities and threats within the wider agricultural industry.
BMI Supply & Demand Forecasts
Divided into sections based on various diverse sectors in the agriculture market, the chapter provides insight into each market’s agricultural industry, centred on sector forecasts to end-2019 for the consumption, production and trade of key commodities.
- Consumption Forecasts: Accompanied by a discussion of the main drivers of consumption growth: macroeconomic factors, food processing trends, price movements and increasingly, demand from the non-food sector.
- Production Forecasts: Examine the trends influencing BMI’s production outlook: global demand, price increases, public and private sector investment and agricultural efficiency improvements.
- Trade Forecasts: Accompanied by a discussion of the factors influencing a country’s trade in agricultural goods, including domestic demand, global prices and government trade policies.
- BMI’s Forecasts: Accompanied by a risks-to-outlook assessment, which examines potential factors that could affect our existing forecast picture and the likelihood of their occurrence.
BMI’s Commodity Price Analysis
Fundamental and technical analysis of the short- and medium-term price outlook for eight agricultural commodities based on globally recognised benchmarks.
Analysis of headline food and drink forecasts, including total food consumption, per capita food consumption and total sector trade, which provide important downstream intelligence for primary agricultural producers.
Includes relevant articles from BMI’s daily analysis service. These can include: long-term projections on agricultural imports and exports; our perceptions of the impacts of economic slowdown on key companies and subsectors within the Agribusiness industry in a given country; our analysis of fertilizer production; as well as other relevant analysis of recent news and events.
The reports contain information on prominent companies operating in each market.
Key Commodities Covered By The Agribusiness Market
Reports Include: Grains, Dairy, Livestock, Rice, Sugar, Palm Oil, Edible Oils, Coffee, Cocoa, Cotton, Soybean
Please note – not all reports cover all commodities.
The Agribusiness reports draw on an extensive network of primary sources, such as multilateral organisations, government departments, industry associations, chambers and company reports.