Japan and South Korea taking place in the leading countries in rice production take place also near the top in world corn and wheat imports. According to some sources total wheat flour consumption of South Korea in 2014 is 1,695 tons. 2,6 million tons from 4,6 million tons of wheat imported in 2014 were used in milling. Japan that imports wheat and exports wheat flour even in small quantities on the other hand manufactures flour from 4 million tons of wheat imported every year. Approximately 300 thousand tons of rice is milled for flour production. Almost 100 and 10 mills are known to exist respectively in Japan and South Korea. South Korea, officially Republic of Korea has become one of the developed countries thanks to its economic growth and global integration in last 40 years. South Korea having a population of 49 million has ranked 14 in world’s largest economies. Economical increase starting from 1960s and turning South Korea into an urbanized and industrialized country from an agriculture-based country with a large rural population until 1990s has decreased agricultural labor force below 20%. Growing cities has lead to a reduction in agricultural areas and increasing population caused an increase also in food needs. The fact that South Korea has focused its attention on importation especially for wheat and field corn in order to meet almost half of food needs of South Korea since 1980s has produced these developments Japan being the world’s third largest economy has started to grow steadily after World War 2 and succeeded to base its economy largely on exportation. Japan having a population of almost 126,5 million has started to use terracing method in agriculture since only 12% of its soils is cultivable land and thus become the country with highest productivity per unit in the world. Japan concentrating its production on rice is the second-largest agricultural product importer in the world. GENERAL ECONOMIC OUTLOOK South Korea, located at the southeastern tip of the Korean peninsula in South Asia. The fact that 70% of its area is covered by mountains and forests constitute a large part of country caused cultivable area of country to remain at a level of 16,5%. Economically active population of South Korea being one of the countries with the highest population density is known to be 25,1 million. Share of manufacturing industry in the economy of South Korea has shown an increase until 1980s and remained about 39% since then. But the shares of agriculture, forestry and fishing in economy have decreased since 1990s. Growth rate of South Korea where economy is largely based on international trade is about 3%. Regime of country is democratic republic and its assembly made up of 290 deputies is responsible for the enforcement of laws and audit of enforcement including budget. Japan lying to northwest of People's Republic of China, east of Korean peninsula and south of Siberia has a diversified climate and is made up of mountains covering 70 % of the land. The fact that Japan's elderly population, aged 65 or older comprises 23% of the nation's population puts Japan into trouble in active labor force. Current shape of Japan has been formed following World War 2 (1939-1945). Economy growing until 2008 has slowed down considerably in 2008. Industrial sector of Japan which had to shut down its nuclear power plants after earthquake and tsunami in 2011 has concentrated on imported raw material and fuel oil. Japan bases 60% of total food need on importation even though it has achieved to be self-sufficient in rice production. Today agriculture constitutes 1,2% of Japanese economy. PLACE AND IMPORTANCE OF AGRICULTURE South Korea, being a mountain region can do agriculture in a confined space since it receives less rain than neighboring countries. According to the data of World Bank, cultivable agricultural area of country is 18,4%. Most important agricultural product of South Korea is seen to be rice. Productivity of rice is quite high. Rice constitutes 90% of grain products produced in the country. However rice constitutes 40% of the revenue obtained from agriculture. Principal agricultural products of South Korea other than rice may be listed as follows: barley, millet, corn, sorghum, buckwheat, soy bean, potato and fruits like grape, mandarin, apple and peach and vegetables like welsh onion, Chinese cabbage, red pepper and radish… Share of agriculture in economy has decreased continuously since 1960s. According to CIA World Factbook share of agriculture in South Korea in 2014 is 2,4. Industry and service sector constitute respectively 38,7% and 58,9% of economy. 6,9, 23,6 and 69,4 of 26,43 million in total labor force are employed respectively in agriculture, industry and service sector. Land forms of Japan made up of mountains to a large extent constitute one of the main reasons for limited agricultural areas. According to data of World Bank only 12,5% of total land in 2012 is agricultural land. Even though climatic conditions are convenient, since area is covered largely by mountains, Japan is one of the countries having difficulty in food sufficiency. This situation made Japan the second-largest agricultural product importer in the world. Soya bean and wheat from the foods consumed often in Japan are almost completely imported. Animal feeds take place also in the most imported products. A very great part of the cultivable lands is reserved for rice. Remaining agricultural lands are seen to be reserved for wheat and barley planting. Sweet potato and various vegetables are grown in summers. Bean and pea are planted in turn by the use of intercropping system. Agriculture, forestry and fishing were dominant factors in Japanese economy until 1940s. Even though agriculture has started to lose its importance in Japanese economy which has developed quickly in the process following World War 2, productivity starts to show an increase upon the transition to modern methods like fertilization and mechanization. According to the information stated in CIA World Factbook, considering the distribution of labor force in sectors in 2010 3,9, 26,2 and 69,8 of it are seen to be respectively in agriculture, industry and service sector. GRAIN PRODUCTION AND CONSUMPTION IN SOUTH KOREA Most important grain product produced by South Korea is rice. South Korea which ranked 15 in global rice product in season 2014/15 and produces rice with high productivity reserves a great part of its existing cultivable land for rice production. According to data of United States Department of Agriculture Foreign Agricultural Service (USA FAS) whereas approximately 4 million tons of rice have been produced every year between season 2003/04 and season 2014/15, South Korea has reached maximum production quantity in season 2004/05 with 5 million tons. Rice production decreasing since 2010/11 was 4,2 million tons in seasons 2013/14 and 2014/15. Very low figures are observed in the production of corn and wheat as compared with consumption of them. Since a great part of agricultural lands in South Korea is reserved for rice production, figures not exceeding 100 thousand tons in the production of grain products are observed. Highest figures in consumption quantities of grain products in South Korea belong to corn. Country falls within first 15 countries in world corn consumption. Corn consumption of the country which was about 8,6 million tons between season 2003/04 and season 2008/09 decreased to 7,8 million tons but exceeded 8 million tons again in season 2009/10 and season 2010/11. Although it decreased again to 7,8 million in season 2011/12, it increased in season 2012/13 and reached 9,8 million tons and 10 million tons respectively in season 2012/13 and season 2013/14. Highest consumption quantities following corn are observed in rice. South Korea which rank 12 in world rice consumption in season 2014/15 has utilizes its rice production of about 4 million tons completely in its internal consumption in last ten years and production doesn’t meet often consumption in fact and thus importation is sought even in low quantities. As for wheat consumption, consumption quantity which was 3,3 million tons in season 2003/04 increased to 3,9 million tons in season 2006/06. This quantity has shown a decrease until season 2009/10 and decreased up to 3 million tons. Wheat consumption reaching over 4 million tons in season 2009/10 and season 2010/11 exceeded 5 million tons in seasons 2011/12 and 2012/13. It increased to 4,2 tons again in season 2013/14 and decreased to 3,7 million tons in season 2014/15. GRAIN PRODUCTION AND CONSUMPTION IN JAPAN According to data of United States Department of Agriculture Foreign Agricultural Service (USA FAS), grain product produced most commonly by Japan is rice as in many Asian countries. According to the data of 2014/15 Japan ranking 10 in world rice production has increased its rice production from 7 million tons in season 2003/04 to 7,9 million tons in season 2004/05 at a rate 12%. Increase went on in season 2005/06 and rice production reached 8,8 million tons. However highest quantity in last ten year has been reached in season 2005/06 and it hasn’t decreased below 7,6 million tons. Rice production in Japan which was 7,9 million tons in season 2013/14 decreases to 7,8 million tons in season 2014/15. As stated above Japan having difficulty in limited agricultural production areas gives priority to rice in cultivable lands to a large extent. Wheat and barley are seen to be produced in a great part of cultivable areas to a large extent. As a matter of fact it is not possible to say that harvest obtained from grain products can meet internal consumption. Considering wheat production between season 2003/04 and season 2014/15 production is seen to remain about 800 thousand tons in general. Highest production quantity has been reached in season 2007/08 with 910 thousand tons. Production which was 812 thousand tons in season 2013/14 was seen to reach 849 thousand tons in season 2014/15. Third grain product produced is barley. Barley production is at a very low level as compared with consumption level. Barley production quantity which exceeded 200 thousand tons only in season 2008/09 between season 2003/04 and season 2014/15 was 182 thousand tons in season 2013/14 and decreased up to 173 thousand tons in season 2013/14. Considering grain consumption quantities in Japan, corn is seen to rank 1 as in South Korea. Whereas there is almost no corn production, corn consumption is very high. This consumption rate made this country the seventh-largest corn consumer in the world. This causes Japan to import corn in high quantities. Japan which consumed 17,2 tons of corn in season 2003/04, decreased this quantity to 16 million tons between season 2004/05 and season 2009/10 and to about 15 million tons as from season 2010/11. Corn consumption decreased to 14,5 million tons in season 2012/13 and then increased to 15,1 tons and 15,4 tons respectively in season 2013/14 and season 2014/15. Grain product consumed most commonly following corn is rice. Rice consumption of Japan ranking 9 in world rice consumption in season 2014/15 was about 8 million tons between season 2003/04 and 2014/15. Highest consumption quantity has been reached in season 2011/12 with 8,396 million tons. Consumption quantity which was about 8,2 million tons from season 2007/08 to season 2009/10 reached 8,3 million tons in season 2014/15. Another most commonly consumed grain product is wheat. Wheat consumption was 5,9 tons in season 2003/04 and reached 6 million tons between season 2004/05 and season 2007/08. Even a little decrease was observed in season 2008/09 and season 2009/10 and consumption decreased to 5,9 million tons. Wheat consumption which has increased as from season 2010/11 reached highest consumption quantity in season 2012/13 with 7,1 million tons. After this date wheat consumption decreased again and became 6,3 million tons in season 2014/15. Barley and sorghum consumption in Japan ranges between 1 and 2 million tons. Barley consumption which was about 1,6 million tons in seasons 2003/04 and 2004/05, decreased some and remained about 1,5 million tons in following years. Sorghum consumption for which Japan ranked 15 in season 2014/15 season decreased from 1,5 tons to 1,1 tons between season 2003/04 and season 2007/08 and increased to 1,6 million tons in season 2008/09. It decreased again to about 1,4 million tons in season 2010/11 and 2011/12 . Highest consumption quantity was reached in season 2012/13 with 1,9 million tons. Consumption quantity decreased to 1 million tons in seasons 2013/14 and 2014/15. GRAIN TRADE IN SOUTH KOREA South Korea where a great part of cultivable soils is reserved for rice production meets the high demand in other grain products through imports. Most important grain product in imports is corn. Country ranks 3 in world corn imports with its import quantity in season 2014/15. South Korea imported over 8 million tons between season 2003/04 and 2006/07, increased its import quantity to 9,3 million tons. Import quantities between season 2008/09 and season 2012/13 were about 8 million tons. Corn import exceeding 10 million tons in season 2013/14 was about 9,6 million tons in season 2014/15. South Korea taking place in world’s largest 15 wheat importers imported over 3 million tons of wheat between season 2003/04 and season 2008/09. 4,4 and 4,7 tons of wheat were imported respectively in seasons 2009/10 and 2010/11 and this quantity exceeded 5 million tons in season 2011/12. Wheat import of country decreased to 4,2 million tons and 3,9 tons respectively in season 2013/14 and season 2014/15. Despite the fact that rice production is concentrated on, a little quantity of rice is imported. South Korea which imported 510 thousand tons of rice, imported 313 and 470 thousand tons of rice respectively in season 2013/14 and season 2014/15. GRAIN TRADE IN JAPAN Most important product in grain imports in Japan is corn. Japan ranking 1 in world corn imports with its import quantity in season 2014/15 imports about 14-15 tons of corn every year. Over 15 million tons of corn have been imported between season 2003/04 and season 2010/11 in Japan where there is little if any corn production quantity like many grains. Japan which imported about 16,5 million tons of corn between season 2003/04 and 2008/09 decreased this quantity to 14,8 million tons and 14,4 tons respectively in season 2011/12 and 2012/13. It increased again and reached 15,1 tons in season 2013/14. It was 15,4 million tons in season 2014/15. Another important product imported is wheat. Japan ranking 7 in world wheat imports with its import quantity in season 2014/15 imported 5,7 million tons of wheat in seasons 2003/04 and 2004/05. Even though import quantity decreased to 5,4 million tons, it reached 5,7 million tons again in seasons 2006/07 and 2007/08. Wheat import quantity of Japan decreased to 5,1 million tons in season 2008/09, started to increase in season 2009/10 and reached 6,1 million tons in season 2012/13. It decreased again to 6,1 million tons and then to 5,8 million tons in season 2014/15. Japan exports wheat even in small quantities. Japan which has exported about 4000 thousand tons between season 2003/04 and 2006/07, decreased this quantity under 300 thousand tons and exported 270 thousand tons of wheat in season 2014/15. Another important grain product in Japan’s grain imports is barley. Japan takes place among first 5 countries. According to the data of USDA barley has been imported in the quantities ranging between 1,2 million tons and 1,5 million tons between season 2003/04 and season 2014/15. Highest import quantity has been reached in season 2004/05 with 1,5 million tons. 1,3 million tons of barley was imported in season 2014/15. In spite of high production quantity rice is imported in small quantities in Japan. Japan which imported over 700 thousand tons of rice in the seasons 2003/04 and 2004/05, imported over 600 thousand tons of rice in seasons 2005/06 and 2006/07. Rice import quantity is observed to have reached 700 thousand tons in season 2014/15. FLOUR MILLING IN SOUTH KOREA AND JAPAN According to the report issued by USDA on wheat and barley policies in Japan, Japan exporting wheat flour to Hong Kong and other markets utilizes about more than 400 tons of wheat imported for this purpose. Japan is also stated to export total 100 tons of wheat flour to other countries in season 2012/13. However about 300 thousand tons of rice in the country is used in flour milling. Approximately 300 thousand tons of rice produced in country are used in flour milling. Rice four produced is used rather in confectionery. Rice quantity varying between 200 thousand and 400 thousand tons are used by feed miller. About 100 mills are known to exist in Japan. While the number of existing mills was about 150 at the end of 1990s, it decreased to 110 in early 2000s. Four great companies are dominant in almost 80% of milling sector. Most of the mills in Japan are located in Tokyo, a certain part of them are located in the western part of country. Mills in question are known to produce 5 million tons per year. According to the report issued by USDA for 2015, total flour consumption of South Korea in 2014 is 1,695 million tons. Wheat flour consumption per capita is 33,6 kg per year. These quantities are seen to decrease over the years. According to the report 2,6 of 4,6 million tons of wheat imported in 2014 was used in milling and 2 million was used as feed. South Korea imported total 22 thousand 913 tons of wheat in 2013. 9 thousand 263, 1 thousand 494, 1 thousand 106 and 9 thousand 549 tons of them are imported respectively from Indonesia, Turkey, Canada and other countries. South Korea is stated to have exported approximately 47 thousand tons of flour in 2013 in report. 44%, 12,9% and 8% of the wheat flour in country are stated to be used in respectively in boodle making, bakery industry and confectionery products. Total 8 enterprises and 11 plants manufacturing flour are known to exist in South Korea.