June 11, 2009

High prices and abundant domestic rice supplies have decreased wheat consumption in Taiwan, according to a report released on Monday (Jun 8) by the Foreign Agricultural Service (FAS) of the US Department of Agriculture.

FAS said wheat consumption in Taiwan has decreased significantly due to the high international wheat prices while the increase in consumption of domestic rice, which has replaced wheat, also heaped further downward pressure on wheat demand.

As Taiwan's wheat production is insignificant, the country's demand is met by imports. For the marketing year of 2008-09 and 2009-10, Taiwan's wheat import is forecasted at one million tonne, an on-year decrease of 14 percent or 180,000 tonnes.

Meanwhile, FAS said China represents a potential threat for US wheat imports. The Taiwanese market could open itself to flour and wheat imports from China as a number of local bakery firms and food producers have established flour mills in China and Taiwan is also currently pushing to liberalise trade with the mainland. However, Taiwan authorities have repeatedly stated that they will not liberalise trade for 834 items currently banned for entry from China.

Taiwan is also a net importer of corn and demand for imported corn is largely spurred by feed use in the local livestock industries, specifically poultry and hog productions. According to the report, the volatile global corn market has pushed some Taiwan corn importers to take small shipments from Asian countries including China instead of buying US corn. Although the official ban on many agricultural imports from China still holds, Taiwan temporarily lifted the ban on corn from China in response to local industries petition for alternative import sources to cope with the unstable corn market situation.

Taiwan's corn import forecasts for 2008-09 and 2009-10 are both 4.32 million tonnes, which is three percent or 111,000 tonnes lower from the previous year.