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Tuesday, April 14, 2015

Market Watch:  South Korea -- A Changing Market?  

A puzzling dynamic 

SEOUL, SOUTH KOREA -- This country of 50 million is a small, but high-value market for the U.S. rice industry.  The U.S. exports have averaged more than 104,000 MT of rice to Korea annually over the past 6 years -- representing about 25 percent of the roughly 410,000 MT imported by volume, or 26 percent of imports by value.  However, a shift may be coming.  While Korea continues to purchase U.S. rice, officials are attempting to manage rice supplies that exceed domestic demand.

 

In 2013, Korea's rice harvest produced a nearly 200,000 ton surplus.  In reaction, the Korean agriculture ministry is looking west to tap into China's rice market. 

In order to boost shipments to China, the South Korean government must lift restrictions that inhibit the volume and price of rice exports.  The Ministry of Food and Agriculture has just published an exporters' handbook containing key information about prominent buyers in crucial importing countries as a means of assisting Korea's export market to countries like China.

In addition, last year, Korea announced they were shifting to rice tarrification, eliminating the country-specific quota the U.S. and others utilized.  The United States, and several other countries, have objected to Korea's version of rice tariffication in the World Trade Organization (WTO), and those complaints remain outstanding, meaning that Korea's current rice import regime has yet to be officially approved by the WTO.

"We're active with promotion efforts in Korea because there is demand for high quality U.S. rice, but we do have potential market access problems as a result of tariffication, which began in January," explained Jim Guinn, USA Rice's vice president of international promotion.  "We are urging the U.S. to engage with Korea to address our concerns, and the fact that Korea is now looking to increase exports, clearly indicate this is a challenging market.  We'll continue to monitor the situation."

Contact:  Colleen Klemczewski (703) 236-1446
CME Group/Closing Rough Rice Futures   
CME Group (Prelim):  Closing Rough Rice Futures for April 14

Month
Price
Net Change
May 2015$10.210
+ $0.105
July 2015$10.465
+ $0.110
September 2015$10.715
+ $0.110
November 2015$10.930
+ $0.105
January 2016$11.160
+ $0.105
March 2016
$11.210
+ $0.105
May 2016
$11.210
+ $0.105

In the News 

Around Washington

FAA Drone Approvals Have Skyrocketed AgWeb

Strictly speaking, flying a drone for commercial uses is not entirely legal. However, the FAA continues to blur the line with its Section 333 exemptions.

 

House Bill Would Kill WOTUS Rule Agri-Pulse

House Republicans introduced legislation Monday that would force federal agencies to kill and then replace a proposed rule to re-define what streams, wetlands and other areas are regulated under the Clean Water Act.

 

 

Around the Country

American Has Fewer and Larger Farms. Here's Why That Matters. Grist

According to an analysis by Food and Water Watch: "Communities with more medium- and smaller-sized farms have more shared prosperity, including higher incomes, lower unemployment, and lower income inequality, than communities with larger farms tied to often-distant agribusinesses."

 

 

Tariffs and Trade

Japan, U.S. Aim for Pacific Trade Pact Progress Before Summit Reuters

Both allies are keen for a TPP deal they see as central to America's "rebalance" of its strategic focus to Asia, in response to China's growing clout.
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USA Rice Federation is the global advocate for all segments of the U.S. rice industry with a mission to promote and protect the interests of producers, millers, merchants and allied businesses.
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Editor:  Michael Klein
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mklein@usarice.com

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This report is time-sensitive, based on information available at press time. Content is derived from facts and sources believed to be reliable. Reprinting and/or distribution may be done with permission of the USA Rice Federation

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