South Korean flour millers last year purchased more wheat from Australia than they did from America because of higher U.S. prices that were a result of drought in 2021-2022.
"Hopefully, U.S. wheat will regain the top position this year," said Dong-Chan Bae, director of the U.S. Wheat Associates South Korea office in Seoul.
Bae spoke to the Washington Grain Commission board March 15 via a video call.
U.S. milling wheat was $478 per metric ton, and Australian wheat was $407 per metric ton.
The U.S. market share in South Korea dropped from 53% in 2020 to 43.4% last year. Australia's market share grew from 40% in 2020 to 47.3% last year.
"It is cause for concern, but the price is what it is," said Ben Barstow, a Palouse, Wash., farmer and grain commission chairman. "Australia had a big crop last year and they have an even bigger crop this year, which is going to make their wheat cheaper."
The U.S. wheat price is propped up by a shortage of hard red winter wheat out of Kansas due to drought, Barstow said. That affects prices for the other wheat classes.
"Nine-dollar soft white wheat is a double-edged sword," he said. "It's great for selling wheat, but it's really hard to maintain a market at that level."
Bae joined U.S. Wheat in November, after 26 years with the Samyang Corp. He spent 20 years as a manager in Samyang's grain procurement division.
The commissioners wanted to introduce themselves to Bae and see what they can do to help sell more wheat to South Korea, Barstow said.
South Korea's farmers grow 1.3% of domestic wheat consumption. The government is trying to increase the nation's self-sufficiency, encouraging farmers to plant wheat instead of rice, but domestic production will likely not increase because of low quality and high costs, Bae said.
About 48% of the flour goes into noodles, 20% goes into bread, 12% goes into cake, 7% goes into feed, 10% is for other uses and 3% is exported.
Noodle flour is blended soft white wheat primarily grown by Pacific Northwest farmers, hard red winter wheat and Australian Standard White Wheat and Australian hard wheat.
Instant noodles, or ramen, are 60-65% U.S. wheat and 35-40% Australian wheat. Wet noodles are 100% Australian. Dried noodles are 10% U.S. and 90% Australian wheat.
Instant noodles are 50% of the noodle market, wet noodles are 33% and dried noodles 17%.
Cake flour is 100% soft white wheat.
Rice consumption is declining as the nation's diets become more westernized, and wheat flour and meat consumption are gradually increasing.
South Korea imports 4 million metric tons of wheat each year.
Biggest challenges in South Korea include North Korea's nuclear missile development, higher household debt as interest rates rise and the declining birth rate and population, Bae said.
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