SOUTH KOREA – The outbreak of COVID-19 caused U.S. distiller’s dried grains with solubles (DDGS) prices in South Korea soared to US$300 per metric ton in April and May making it almost impossible to secure exports causing DDGS exports to South Korea to fall.
Due to this, the feed industry in Korean rapidly switched to alternative feed ingredients. This resulted in large feed millers completely excluding U.S. DDGS from their feed formulations and most compound feed companies reducing inclusion rates dramatically.
The Council recognized the urgency of reinforcing the economic and nutritional advantages of U.S. DDGS to the Korean compound feed industry as ethanol production came back online and DDGS supplies became more readily available and affordable.
“Thanks to the Council’s active promotion since 2014, U.S. DDGS have been firmly positioned as one of the three major compound feed ingredients in the South Korean animal feed market.”
Haksoo Kim – USGC director for South Korea
Due to this, South Korea is set for another record for imports of DDGS for the 2019/2020 marketing year, thanks to the U.S. Grains Council’s (USGC’s) work to encourage resumed purchasing following COVID-19 production shortfalls.
“Thanks to the Council’s active promotion since 2014, U.S. DDGS have been firmly positioned as one of the three major compound feed ingredients in the South Korean animal feed market. South Korea has set a new record for U.S. DDGS purchases each year since 2010/2011,” said Haksoo Kim, USGC director for South Korea.
Following the Council’s work to introduce the nutritional advantages of U.S. DDGS, average inclusion rates dramatically increased from 3.3 percent in 2014 to 5.6 percent in 2019. Increased use has led to a steady increase in imports. As the third largest world buyer, South Korea purchased 1.19 million metric tons of U.S. DDGS in 2018/2019.
“Increased U.S. DDGS exports after August will be enough to offset the decline caused by COVID-19,” Kim said. “Sales are now on track to set yet another new export record to South Korea for the 2019/2020 marketing year.”
The in-country staff organized continuous flow of information on the market and technology to educate people on how DDGS inclusion helps produce high-quality meat products. They distributed handbooks and held webinars to the Korean feed industry.
These activities were well-received, and the feed industry has now recovered inclusion rates to pre-COVID-19 levels. U.S. exports of DDGS exports to South Korea also increased significantly in August. Exports-to-date (September 2019 to July 2020) are up 2.9 percent year-over-year at 1.11 million tons, with one year of export data remaining to complete the 2019/2020 marketing year.
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