the tofu factory crisis is serious: 1800 tofu manufacturers across the country are at risk of shutting down due to unstable soybean supply and demand. With domestic soybeans costing more than three times the price of imported beans, we analyze the problems with the government's state-run trade system.

tofu, a staple food on our tables, is in danger of disappearing. as of October 2025, more than 1,800 tofu manufacturers across the country are at risk of shutting down due to a shortage of raw materials. more than 120 companies in Gangwon-do and 80 in Gwangju-Jeonnam will completely shut down in November. gangneung Chodang Tofu, which has a 43-year history, is also experiencing a raw material shortage for the first time.

this is not just a temporary supply shortage; it is a complex crisis created by the contradiction between the government's policy of encouraging domestic soybeans and the structure of soybean imports. in 2025, soybean imports fell 13 percent year-on-year to 270,000 tons, but domestic soybeans cost 3.6 times as much as imported soybeans, making them unaffordable for small and medium-sized manufacturers. structural problems in the state-run trade system, dominated by the Korea Agriculture, Fisheries and Food Distribution Corporation, have also contributed to the crisis.

in this article

  1. tofu factories across the country shut down, the first shortage in 43 years
  2. three causes of soybean supply and demand instability
  3. why domestic soybeans cost 3.6 times as much as imported soybeans
  4. the role of the state-owned trading system and the Korea Agri-Food and Food Distribution Corporation
  5. frequently Asked Questions
  6. conclusion

tofu factories across the country shut down, the first in 43 years

in November 2025, the South Korean tofu industry comes to a standstill. more than 120 tofu manufacturers in Gangwon Province decided to shut down their factories after running out of raw materials. more than 80 companies in the Gwangju Jeonnam region are in the same situation. across the country, 1800 small and medium-sized tofu manufacturers are facing a simultaneous crisis.

choi Sun-yoon, chairman of Gangneung Chodang Tofu, which produces 40,000 mo of tofu per day, said that although the company has been making tofu for 43 years since its establishment in 1983, this is the first time it has had to shut down due to a lack of raw materials. gangneung Chodang Tofu is even considering filing a claim for damages against the Minister of Agriculture and Food.

the same is true for soy milk companies. large soy milk manufacturers such as Daily Dairy and Yonsei Dairy are also expecting to run out of raw materials starting in November. an official from one soy milk company described the emergency situation, saying they borrowed 200 tons from another union in October and are barely running their plant. makers of beverages are experiencing the same difficulties.

park Won-tae, executive director of the Korea Federation of Soft Food Cooperatives, predicted that they would have difficulty making tofu or miso since September as soybean imports have dropped, while Moon Hang-jae, executive director of the Gwangju Jeonnam Soft Food Cooperative, warned that his members could survive for a month if they did well, and that some would go bankrupt if their factories closed.

three causes of soybean supply instability

the first cause is plummeting imports. the total amount of soybeans imported in 2025 is 270,000 tons, down 13 percent from the previous year. in 2024, the plan was 281,360 tons, but the actual supply was only 248,389 tons. The industry estimates that at least 10,000 additional tons are needed, but only 6,000 tons are currently in stock.

the second cause is a structural problem with the state-run trade system. the Korea Agriculture, Fisheries and Food Distribution Corporation has monopolized soybean imports since 1987. in the past, the country used to import an additional 30,000 to 40,000 tons each year, but the government curbed imports to encourage domestic soybeans, resulting in a supply shortage. the KFA randomly distributes soybeans without distinguishing between quality or use, and as much as 10 percent of the soybeans are discarded during the sorting process.

the third cause is the public sale of import rights. the Korea Agriculture, Fisheries, and Food Distribution Corporation sells import rights in a public auction, and allocates them in the order of those who paid the most. due to overheated competition, many companies failed to win the auction, and those that won lost their price competitiveness due to high costs. han Il-hong, executive director of the Korea Tofu Products Cooperative, criticized the government, which has a virtual monopoly on soybean imports, for encouraging overheating through the public auction rather than stabilizing prices.

why domestic soybeans will cost 3.6 times as much as imports

in 2025, the price of domestic soybeans is about 5000 won per kilogram, while the price of imported soybeans is about 1400 won per kilogram. 3.why is there a 6-fold price difference?

the government introduced the Strategic Crop Direct Payment System in 2023, which pays farmers 2 million won per hectare for growing paddy beans. the budget increased from KRW 18.5 billion in 2023 to KRW 70 billion in 2025, an increase of about 3.8 times. The government promised to buy all domestic soybeans and expanded the number of paddy bean production complexes from 82 in 2021 to 200 in 2025.

as a result, domestic soybean production increased. in 2024, production reached 155,000 tons, an increase of 9,000 hectares year-on-year, and in 2025, the planted area was 83,133 hectares, an increase of 9,000 hectares year-on-year. The area under paddy beans was 32,920 hectares, a 46.7 percent increase year-on-year.

however, the share of domestic soybean consumption declined. from 34.3 percent in 2023 to 30.5 percent in 2024, the share of domestic soybean consumption dropped by 3.8 percentage points. this is because the price difference makes domestic soybeans unaffordable for small and medium-sized manufacturers. An official from the Gangwon-do Food Cooperative pointed out that the root cause of the situation was a hasty domestic soybean promotion policy that ignored the market.

the government is even losing money by selling imported soybeans below cost. in 2022, the cost of goods sold was 1336 won per kilogram, but it was sold for 1140 won, and in 2023, the cost of goods sold was 1475 won, but it was sold for 1400 won. the total losses over the two years amounted to KRW 24.27 billion. in this situation, the supply of imported soybeans was also reduced, leaving tofu factories without raw materials.

the state-owned trade system and the role of the Korea Agriculture, Fisheries, and Food Distribution Corporation

the Korea Agriculture, Fisheries, and Food Corporation has had a monopoly on soybean imports since 1987. it imports 185,787 tons per year under a mandatory 5 percent tariff quota under a World Trade Organization agreement, and an additional 60,000 tons under free trade agreements. that's a total of 240,000 to 250,000 tons.

if a private company wanted to import directly, it would have to pay a high tariff of 487 percent, which is virtually impossible. they can import through the Korea Agriculture, Fisheries and Food Distribution Corporation at a low rate of 5 percent tariff, but the process of obtaining import rights is not easy.

the original purpose of the state-owned trade system was to simultaneously protect producers and consumers of basic food staples, stabilize prices through just-in-time releases, and perform food security functions in emergencies such as war, but in reality, it is not working.

south Korea imports 93.8 percent of its soybeans from two countries: 50.3 percent from the United States and 43.5 percent from Brazil. the country's self-sufficiency rate in soybeans is only 30.5 percent in 2024, and the government has set a goal of raising it to 43.5 percent by 2027, which seems unattainable at this point.

choi Sun-yoon, chairman of the Gangneung Chodang Tofu, argued that instead of state-run trade, which is fraught with side effects, it is preferable to improve the system so that manufacturers can freely import the quality soybeans they want, like in Japan. Japan has liberalized imports since 1961, allowing them to select varieties and quality.

as a short-term countermeasure, the government announced on October 20, 2025, that it is considering an additional supply of imported soybeans for the year. it plans to purchase an additional 20,000 tons by securing KRW 102.1 billion through the second supplementary budget. however, the industry claims that at least 10,000 tons more are needed, so it will be difficult to solve the problem with short-term measures alone.

frequently asked questions

q1. Why did the tofu factory crisis occur?

because the government has reduced the supply of imported soybeans to encourage domestic soybeans, but the price of domestic soybeans is 3.6 times higher than imported soybeans, making them unavailable to small and medium-sized manufacturers. In 2025, imports were 270,000 tons, down 13 percent year-on-year.

q2. What is the price difference between domestic and imported soybeans?

in 2025, domestic soybeans cost about 5000 won per kilogram and imported soybeans cost about 1400 won per kilogram, a difference of 3.6 times. the unit price of imported beans is about 500 won per kilogram, but the price increases as it is distributed through the Korea Agriculture, Fisheries, and Food Distribution Corporation.

q3. What is the role of the Korea Agriculture, Fisheries, and Food Distribution Corporation?

the Korea Agriculture, Fisheries, and Food Distribution Corporation has monopolized soybean imports since 1987. it imports about 240,000 tons per year at a low tariff rate of 5 percent under a World Trade Organization agreement and distributes it to actual consumers. private companies would have to pay a high tariff of 487 percent to import directly.

q4. Will the price of tofu increase?

as of October 2025, the retail price of tofu has remained stable at 5221 won. large companies such as Pulmuwon have no plans to raise prices yet, but if the factory shutdowns of small and medium-sized companies become a reality, the price will inevitably rise due to a shortage of supply.

q5. What is the government's solution?

the government plans to purchase an additional 20,000 tons of soybeans by securing KRW 102.1 billion through the second supplementary budget. It is also considering additional imported soybeans for the rest of the year. however, without fundamental improvements to the state-run trade system, similar incidents are likely to recur.

conclusion

the tofu factory crisis is a complex crisis that occurred when the government's good intentions collided with market realities. the policy of encouraging domestic soybeans is necessary for food security and farmers' incomes, but the sharp reduction in the supply of imported soybeans while ignoring the price difference was problematic. structural problems also contributed to the crisis, including the state-owned trade monopoly of the Korea Agriculture, Fisheries and Food Distribution Corporation, overheated competition in the public auction system for import rights, and random allocation without quality screening.

in the short term, additional government supply can partially alleviate the crisis, but without fundamental institutional improvements, the crisis will repeat itself. We need to rebalance the ratio of state trade to private imports, introduce a quality screening system, and establish a supply system customized for each use. to increase the competitiveness of domestic soybeans, functional varieties should be developed, integrated processing plants should be expanded, and contract farming should be expanded.

a balanced policy that considers both producers, manufacturers, and consumers is urgently needed if tofu, an essential food on our table, is not to disappear. what are your thoughts on this issue? share your thoughts in the comments. for more food industry news, hit the subscribe button.