May 16, 2008

Taiwan feed suppliers jointly purchase China corn to cut costs

Taiwan's farm and feed suppliers jointly purchased 500,000 tonnes of China corn, about one-tenth of the country's overall import, to cut purchasing costs.

The Taiwan Feed Industry Association says the joint procurement launched by domestic fodder suppliers is effective monthly from the beginning of July till the end of this year.

The purchasing group includes Greatwall Enterprise Corp., Uni-President Enterprises Corp., Taisun Enterprise Co., and Fwusow Industry Co.

Taiwan fodder suppliers currently spend TWD11 to buy a kilogramme of corn, despite selling the same between TWD9.4 and TWD9.5 per kilogramme, an industry observer said.

Taiwanese fodder suppliers hope to see product prices stabilize to enable with the purchase of Chinese corn.

A survey by FoodChina.com shows that corn shipped from North America is set at US$330 and US$360 per metric tonne, while China corn is between US$10 and US$15 less.

Including shipment costs, domestic fodder suppliers can cut costs by 5 percent and 10 percent per kilogramme to buy corn from China than North America.

Taiwan's demand for corn reaches 5 million tonnes per year, while China exports about 8 to 10 million tonnes of corn per year.