January 23, 2004

Taiwan To Import Only 20,000 Tons Corn From China

Taiwan is likely to import only 20,000 tons of corn from the People's Republic of China before Taiwan closes the market on Jan. 31, according to information from the U.S. Department of Agriculture's Foreign Agricultural Service.

PRC Corn Shipments Expected to be Very Low

Corn shipments from Mainland China are unlikely to exceed 20,000 tons in MY03/04.

Although Taiwan opened its market to PRC corn on Nov. 18, high prices of around $155 C&F ton have cut demand. PRC corn will be priced at NT$5,900/ton versus current U.S. corn prices of NT$ 6,000/ton (Note: $1=NT$34). The price difference is likely to shrink, the press release said.

Interest in PRC corn was also reduced by the impending arrival during January of 600,000 tons of corn ordered in 2003 and concerns by Taiwan importers that the Chinese government may prevent the export of contracted for shipments. Taiwan traders were particularly disturbed by China's cancellation of a Panamax shipment to South Korea in November 2003.

As of Jan. 8, only one group of swine Taiwan producers bought 20,000 tons of PRC corn for arrival around Jan. 13. With Taiwan set to close the market on Jan. 31, further shipments of PRC corn are very unlikely in MY03/04. This 20,000-ton total is a sharp reduction from 71,000 tons imported in MY02/03.

Taiwan's minimal interest in PRC corn will likely make the Taiwan Council of Agriculture (COA) more reluctant to open the market in the near future, despite growing cross-straits business ties and continuing pressure on Taiwan's livestock sector from imports. Low import levels indicate that PRC corn will not be very helpful in boosting the competitiveness of the Taiwan livestock sector in the short-term.

The long-term move to cross-straits liberalization will be slowed further if PRC corn prices stay high or if the PRC government continues interfering with corn exports. These difficulties with PRC corn may strengthen the hand of Taiwan's feed milling sector, which generally opposes PRC corn imports.