Brazil Overtakes the US in Taiwan’s Corn Import Market
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Taiwan’s MY2023/2024 total Corn consumption is forecast to recover to 4.7 MMT as livestock restocking boosts demand. MY2022/2023 total Corn consumption is estimated to decline to 4.4 MMT due to a weakness in feed demand in the first half of CY2023. MY202120/22 total Corn consumption was 4.7 MMT, in line with previous estimates. Taiwan’s Corn consumption in feed use closely tracks annual feed production as Corn is the primary energy source in feed. In CY2021, Taiwan feed production was 8.59 MMT, with poultry feed and hog feed accounting for 48 percent and 43 percent, respectively.
Overall feed demand in 2023 will remain constrained, as poultry feed demand is unlikely to recover from Highly Pathogenic Avian Influenza (HPAI) losses until the second half of 2023. Taiwan’s on-farm production is concentrated in hog feed. Non-integrated hog farmers prefer buying Corn and soymeal separately versus commercially produced feed. As a result, commercial poultry feed production is higher than hog feed. As consolidation in the livestock industry continues, commercial feed is expected to gain against on-farm feed.
In MY2021/2022, U.S. bulk Corn offers were uncompetitive against other origins, with most bulk vessels coming from Argentina, Brazil, and South Africa. As a result, most imports from the United States came in by containerized shipment. U.S. market share dropped from 37 percent to 17 percent. Argentina and South Africa increased market share at the expanse of the United States and Brazil. In 2022, high agricultural commodity prices and freight costs, partly from the impact of the Russian invasion of Ukraine, pressured feed manufacturers to increase feed prices several times. Not until late MY2022/2023 did agricultural commodity prices appear to stabilize.
Taiwan’s feed industry relies heavily on imports to produce feed. In February 2022, the Government announced policies to waive the five percent business tax on Corn and soybean imports to lessen the inflationary pressure from imports and stabilize feed prices to reduce the burden on the livestock and poultry industries. However, the reduction has been insufficient to offset the increased costs and the effects of a stronger U.S. dollar. The measure has been extended five times and is set to expire on June 30, 2023. Market sources indicate feed prices remain elevated year-on-year (YoY) even with the latest decrease in February 2023.
Rumors that the tax waiver would end before January 2023 front-loaded some Corn bulk imports, creating a temporary excess of stock. For the first three months (October to December) of MY2022/2023, imports by volume increased 11 percent YoY. In CY2022, Taiwan imported 467,551MT of U.S. Corn in containers, down 17 percent from 2021 (accounting for 62 percent of U.S. imports).
The pandemic-related shipping logistics challenges, including container availability, port congestion, and labor shortages still impact containerized shipments to some extent. Apart from Corn, Taiwan imports other grains and feed ingredients, including DDGS and Corn gluten meal, depending on the formulation’s needs. These import volumes closely track availability and price competitiveness against Corn.
Corn Imports in Taiwan
According to AgFlow data, Taiwan imported 0.5 million tons of Corn from Brazil in Jan-June 2023, followed by the US (0.4 million tons) and Argentina (0.14 million tons). Total import volume hit 1.1 million tons in that period. MY2023/2024 Corn imports are forecast to increase to 4.5 MMT due to recovering feed demand. Further growth in Corn imports, however, is likely to be minimal as demand is constrained by Taiwan’s limited opportunity for livestock expansion. Corn imports are estimated to decrease to 4.4 MMT in MY2022/2023.
As HPAI continued to weigh on the domestic poultry industry in MY2022/2023 and the temporary shortage could not be fulfilled by restocking, imported meat products were substituted for domestic feed demand. MY2021/2022 Corn imports were 4.55 MMT based on customs statistics.
Other sources: USDA
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