Corn Competes With DDGS in Taiwan
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MY2022/23 Corn production is forecast stable at 80,000 MT. COA provides rice farmers incentives to grow Corn, wheat, soybeans, and other coarse grains in rotation with rice to reduce import dependence and decrease rice acreage. But, the impact of these domestically grown grains is negligible due to Taiwan’s limited arable land, subtropical climate, and more favorable rice subsidy program.
Farmers mostly plant field Corn during Taiwan’s second cropping season because rice yields are lower compared to the first crop. In recent years, the total planted acreage for field Corn hovers between 13,000 to 16,000 HA with limited expansion. Taiwan’s production volume of field Corn accounts for less than 2 percent of use.
MY2022/23 total Corn consumption is forecast stable at 4.6 MMT. MY2021/22 total Corn consumption was also 4.6 MMT based on preliminary feed and animal production estimates. Corn consumption closely tracks total feed production in Taiwan. Demand for animal products remained strong during the pandemic. The trend is expected to continue as Taiwan bounced back from its 2021 COVID-19 outbreak, and the pandemic is considered well under control. However, prices for Corn and other feed ingredients continue to increase. High feed prices will force producers to find ways to control costs, such as changing feed formulas to incorporate cheaper substitutes or reducing the number of animals on farms.
Feed production is forecast to decrease by 100,000 MT to 8.47 MMT in 2022. Poultry feed accounts for 46 percent of total feed, followed by hog feed at 44 percent. Dairy cows and aquaculture account for most of the remaining percentage. Taiwan’s feed industry relies on imports to meet the demand for feed production. To help stabilize feed prices and lessen the burden on the livestock and poultry industry, the Government announced policies to waive the five percent business tax on Corn and soybean imports over four months through June 30, 2022. This tax reduction is insufficient to offset the increased costs, and feed prices continue to rise. The livestock and poultry industry are absorbing most of the feed price increase.
Taiwanese Corn Import Pattern
MY2022/23 Corn imports are forecast to increase by 50,000 MT to 4.4 MMT. MY2021/22 Corn imports were estimated to decrease 150,000 MT to 4.35 MMT based on COA statistics and MOEA feed production statistics. The challenges from high agricultural commodity prices and freight costs pressured feed manufacturers to increase feed price several times since the beginning of 2021.
The Russia-Ukraine conflict is expected to have a comparatively little direct impact on feed production in Taiwan. Exhibit 3 shows the relative market shares of Taiwan’s Corn imports. Taiwan did not import Corn from Russia in 2021and imported a minimal volume of Corn from Ukraine in 2021. According to AgFlow data, Argentina led their Corn import market with 1.7 MMT in 2021 – 2022, followed by Brazil (1.2 MMT) and the United States (0.6 MMT).
In 2021, The United States regained the largest market share for Corn, accounting for 35 percent of Taiwan’s Corn imports. South American producers remain very competitive, though Brazil declined significantly to 27 percent due to unfavorable weather, while Argentina increased to 26 percent due to good harvest. About 13 percent of Corn imports were shipped via container in 2021, most of which came from the United States. In 2020 containerized shipments accounted for 15 percent.
Corn faces competition from other grains and feed products such as DDGS and Corn gluten feed. Year-to-year import volume changes closely track price fluctuations and availability, while feed inclusion rates for DDGS vary depending on relative prices of other feed grains. For example, Taiwan imports most barley from Australia, which offers a price advantage of about 30 percent less than U.S. barley.
Other sources: https://www.usda.gov
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