The USDA also noted that Taiwan pork producers last spring also attempted to bring corn from China, but did not succeed. The US supply picture is about the same to a little looser then it was last year at this time, and the China's supply picture seems to be somewhat tighter than it was last year. Whether trade will flow mostly depends on the relative cost of freight between Taiwan and the US and Taiwan and China, and the ability of Taiwan to get export quota from China. The latter is a political decision that would need to be taken by Beijing, as China is believed to be approaching the point where it will need to import significant quantities of corn. While small amounts of China corn have been imported by Taiwan in the past, traders report that those shipments were of very uneven quality. In addition to working to lower input costs, pork farmers have also restricted trade. Their efforts to block establishment of a residue standard for ractopamine, a widely used feed additive approved in the US and most major pork import markets, has virtually stopped US pork exports to Taiwan.

 

Taiwan temporarily opened its market to Chinese corn from October 1 until March 31, 2008 due mainly to concerns about a possible shortfall of corn, and China's geographic proximity with its advantages of shorter delivery times and lower shipping costs. Taiwan feed millers have indicated that they intend to import 370,000 tonnes of China corn according to the Taiwan Feed Industry Association (TFIA). Hog farmers are also planning to import Chinese corn to secure corn supply for farm mixed feed. Potential importers are now waiting for an export quota for the shipment of Chinese corn to Taiwan. The allocation of such a quota does not mean that it would be cheaper to import Chinese corn than US corn.

 

While the industry is anticipating a shortfall of feed grain in February 2008, due mainly to hesitation to import and delays of containerized shipments, it is important to note that the shipping time from Portland, Oregon to Taiwan is less than a month. Taiwan feed millers have been hesitant to import corn as prices have been rising. Moreover, ocean freight prices have been surging in recent months, causing Taiwan feed millers to use more containers to import grains. However delays of grain container shipments are often beyond the control of grain suppliers and importers, adding another complication to the domestic feed market, says the USDA.