June 1, 2006

 

Taiwan 06 soy imports to remain stable

 

 

Taiwan's soy imports in 2006 is likely to be around 2.4 million tonnes, unchanged from last year's level, an industry executive said Thursday (Jun 1).

 

"There hasn't been any significant change in the business climate so far this year as far as soy use is concerned. Therefore not much change in imports is seen," said Leon Chen Chao Liang, trade manager with TTET Union Corp.

 

TTET Union Corp, headquartered in southern Taiwan, is one of the largest soy processors in the country.

 

Taiwan imports almost all of its soy requirements. Historically, the country has imported the lion's share of its requirement from the United States.

 

The US accounted for 70 percent-75 percent of Taiwan's soy imports in the year ended Sept 30, 2005, up from 61 percent in the year before.

 

Leon said Taiwan's import of soy at present is quite evenly divided between the US and Brazil.

 

"This year, the usual sharp fall in soy price in Brazil did not happen due to the appreciation of the real, so US soy has in fact remained quite competitive throughout 2006," said Leon.

 

Taiwan has traditionally bought soy from either the US or Brazil.

 

It has rarely bought soy from Argentina, because of perceived quality issues.

 

Meanwhile, demand has remained strong, Leon said, as bird flu left Taiwan largely untouched with poultry consumption so far this year being normal.

 

Poultry consumption could, however, slow toward the end of the year, when colder weather sets in, he said. Many believe the risk of bird flu is higher during the winter months.

 

But a US Department of Agriculture report said earlier this year that Taiwanese hog production is expected to rise this year, offsetting any impact of lower demand from the poultry industry for feed.

 

At present, Taiwan is not importing much soymeal, as domestic soymeal is cheaper than imported varieties, Leon said.

 

Local soymeal prices are currently around 4 percent below the prices of meal in India or the US.

 

Taiwan normally does not buy much Brazilian soymeal which is mainly available in cargo sizes of 40,000 tonnes and above and therefore, not very cost-effective for local importers.

 

But soymeal imports may pick up from September when cheaper Indian soymeal becomes available after India's soy harvest.

 

Leon said the outlook for soy price in the next few months will depend almost entirely on the US weather during the new soy crop.

 

So far, CBOT soy futures have been under pressure amid favorable weather and planting conditions for the US soy crop.

 

The landed cost of US soy in Taiwan has remained around US$260/tonne, cost and freight basis, largely unchanged since February.