Taiwan to Buy 2 Million Tons of Wheat From the US
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Taiwan’s local Wheat production is negligible at under 367,500 bushels per year. Taiwan relied entirely on imports for its food Wheat requirements for the past 50 years and will likely continue to do so in the future. Per capita Wheat consumption in Taiwan exceeded that of rice several years ago and now is stable at 119 to 128 pounds.
Taiwan is a traditional rice country where Wheat consumption exceeds rice consumption due to urbanized lifestyles, and the sheer variety available in Wheat products. In coming years, it is forecast that a fast-aging population will hinder the growth of overall Wheat consumption.
The country imports 99.9% of its Wheat from abroad. Leading Wheat supplier is the US, followed by Australia and Canada. As per AgFlow data, the US exported 928,700 tons of Wheat in 2021-2022, while Australia shipped 138,000 tons of Wheat.
The US-Taiwan Wheat Trade
Taiwan is the 6th largest US Wheat export market and the 7th largest overseas market for US agricultural products. Taiwan was the fourth-largest consumer of US agricultural products on a per capita basis. In 2021, 22% of Taiwan’s total agricultural imports came from the US. The main products imported include soybeans, corn, and Wheat.
The acquisition of US Wheat has a long history. The Taiwan Flour Millers Association (TFMA) purchases all US Wheat for all 16 of Taiwan’s mills as a group, emphasizing consistency. The flour market typically specifies a US No. 1 grade of Wheat, which is very competitive regarding cost and quality and shows signs of excess capacity.
TFMA regularly tenders three classes of US Wheat from the Pacific Northwest (PNW): i) Soft white (SW), primarily from Washington state, is used for cake and biscuits products, ii) Hard red winter (HRW), for a multipurpose flour, which includes traditional Chinese products and noodles, iii) Hard red spring (DNS) is used for bread products and as a flour improver.
The Association was established in 1952 with 38-member flour mills. Currently, only 16 mills are in operation. The top 10 millers account for over 90 percent of the Taiwan flour market. It is forecast that a consolidation trend among producers in the Taiwan Wheat flour market will continue. The Association expects Wheat imports to fall by 5 percent in 2022 but also expects Wheat consumption will recover rapidly in the first half of 2023 if the pandemic is well contained and Wheat prices start to cool.
The TFMA signed a letter of intent on Sept. 14 with US Wheat Associates to purchase 1.9 million tons of Wheat from the United States over the next two years. The Taiwanese delegation also visited Kansas, Oregon, and Washington, D.C., as part of a goodwill mission to demonstrate Taiwan’s continued willingness to buy US Wheat. Overall, Taiwan is looking to buy 66.1 million bushels from the US, worth about $576 million, about 80% of its total Wheat imports.
During the mission, Idaho and Taiwan Signed a Two-Year Wheat Trade Agreement. Officials said Idaho is expected to supply about 5% of the US portion to Taiwan. Overall, Taiwan Agricultural Trade Goodwill Mission signed letters of intent to purchase $3.2 billion of Wheat, soybeans, and corn from the United States. Taiwanese representative said the logistics of buying Wheat during a time of uncertainty meant Taiwan appreciated the US being a trustworthy partner.
According to the USDA, for Marketing Year 2022/23, Wheat production is forecast flat at 6,000 tons, unchanged from the previous two Marketing Years. Australia recovered its market share thanks to drought recovery, but the United States remains the chief supplier with 66 percent market share. To stabilize commodity prices, Taiwan removed the import tariffs and business taxes on Wheat over four months until June 30, 2022.
The preparation of this article included public information such as https://usnews.com
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