Washington, Mar 19: Korean soybean production declined 3 per cent in 1997, to 156,000 mt, though area harvested increased 2 per cent, according to Korea oilseeds update, a report produced by the US department of agriculture attache in Seoul.The report released on Tuesday said weather factored in the decline in yield. Crush volume in 1997/98 is projected at 1.15 mmt, 7.6 per cent less than previously forecasted and 15 per cent less than in 1996/97.Growing evidence of the depth of the economic crisis' impact on end-users of processed oilseeds is now appearing.
In addition, rising meal imports indicate there has been some fallout from the unilateral decision last December by oilseed processors to terminate credit financing to feed millers. In 1997/98, oilseed imports are projected to only reach 1.4 mmt due to weaker than expected demand from the compound feed industry and related downstream users. In 1996/97, imports increased 14 per cent to 1.62 mmt in response to strong demand for oil and mealby-products.
In December USDA announced a GSM-102 program for soybeans and soybean meal. The program should supply approximately one-third of Korea's 1997/98 soybean import needs, at current market prices. The program opened the door for US soybean meal's reentry into this market after a five year hiatus.In 1997/98, oilseed meal production is projected at 962,000 mt, 7.6 per cent less than previously forecasted, on the basis of the lower soybean crush volume.
Fish meal production expectations have been dampened somewhat by the February unilateral decision by Japan to terminate the long standing fishery accord with Korea. In 1997/98, total meal imports are projected to reach 2.0 mmt, a decline of 7 per cent from 1996/97, but higher than initially forecasted.
Ironically, oilseed processors have turned to exporting meal in response to lower domestic demand for their product. In 1997/98, total oil output is expected to drop to 205,000 mt, a decline of 15 per cent, from the 1996/97 total of 242,000 mt. Theexpansion level the tel/restaurant/industrial sector attained in 1996/97 cannot be maintained in the current economic environment.
Total oil and fat utilisation (not reflected in the PSD's) is projected to decline to 952,000 mt in 1997/98, down from 980,000 mt IN 1996/97, in response to the large reduction in demand by the industrial sector. While consumer surveys show home use is up, hotel and restaurant use is down. This situation with the hotels and restaurants is expected to reverse itself somewhat in 1998/99 as the economy recovers. The industrial sector is expected to take longer to recover. The expected recovery in 1998/99 underpins optimism for the out year across the oilseed complex.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
