South Korea is buying U.S. grains in all forms at explosive rates due in large part to the U.S.-Korea Free Trade Agreement (KORUS), according to the U.S. Grains Council (USGC). The agreement, which went into effect in 2012, has also resulted in commensurate growth in the country’s livestock and poultry sectors.

“Since KORUS was implemented, grains in all forms sales have increased 78%, and Korea has set or broken sales records for purchases of U.S. corn, sorghum, ethanol and distillers dried grains with solubles (DDGS),” USGC noted. South Korea increased purchases of U.S. feed grains and co-products by 11.8% to 9.33 million metric tons (367 million bu.) – a new record – in 2017-18. During that time frame, the country ranked as the second-largest buyer of U.S. DDGS, the third-largest buyer of U.S. corn and the sixth-largest buyer of U.S. ethanol.

“The growth in demand for U.S. commodities like corn, DDGS and ethanol in Korea is the direct result of years of Council’s groundwork,” Haksoo Kim, USGC director in South Korea, said. “The council has been here actively promoting these commodities and – in the case of DDGS – directly building demand. It’s only gotten better since the two countries signed the KORUS agreement.”

Beyond the top-line numbers, USGC reported t

“The nation has seen a 3.5% increase in its poultry numbers, a 1.3% rise in its swine inventory and a 0.3% increase in its cattle inventory over the last year,” the council added.

USGC reported that due to work in the region that started in 2004, 97% of feed millers in South Korea now include U.S. DDGS in their rations for the country’s livestock and poultry industries. The council continues its work to increase average inclusion rates by providing additional technical expertise and business opportunities between U.S. suppliers and Korean buyers.

U.S. corn exports to Korea have increased 61% since KORUS went into effect in 2012, according to USGC. In 2017-18, the country purchased 5.74 million metric tons (226 million bu.) of U.S. corn, an increase of 2.4% over the previous year. The increase in corn imports is due to increased poultry and duck feed production and decreases in feed wheat imports compared to the same period last year, USGC noted. U.S. corn sales captured 66.3% of the Korean market in 2018.

Even though there is no fuel ethanol market in South Korea, USGC reported that U.S. industrial ethanol imports have seen record-breaking growth, increasing a whopping 400% since KORUS went into effect. Imports of U.S. ethanol jumped 47.3% to 69.7 million gal. (24.7 million bu. in corn equivalent) in 2017-18.

In the same year, U.S. ethanol had a 52% market share – 107.4 million gal. of ethanol (38.1 million bu. of corn equivalent) – in Korea. USGC said the country uses roughly 140 million gal. of ethanol (49.6 million bu. of corn equivalent) each year, about 100 million gal. (35.5 million bu. in corn equivalent) of which are imported from the U.S., Brazil and Pakistan.

“The main reason for the exponential increase in U.S. ethanol sales this year is that the Korean Ministry of the Environment banned methanol windshield wiper fluid as a hazardous chemical in January 2018, and methanol was completely replaced by ethanol,” USGC explained. “The Korean government is also converting methanol in concrete curing compounds and solid fuels in the country, and ethanol is the chief replacement element.”

Sales of U.S. sorghum and barley have also been impressive in the last marketing year, USGC said. Sorghum set a new record, increasing 60-fold year over year to 59,800 metric tons (2.35 million bu.). This was a temporary increase due to the disruption of U.S. sorghum imports in China and mostly was used for feed, USGC said. U.S. barley purchases have increased 116% – to 7,290 metric tons (335,000 bu.) – since KORUS went into effect.