Taiwanese Soybean Buyers Prefer Bulk Vessels
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There is minimal Soybean production in Taiwan due to the predominance of rice and other crops, the lack of available farmland, and the competitiveness of imports. MY 2022/23 production is forecast at 5,000 tons, unchanged from MY 2021/2022. The forecast planted area is at 4,000 ha for both MY 2022/2023 and 2021/2022.
On January 17, 2022, the Soybean Industry Strategic Alliance was launched by 55 farmer’s groups at a COA-hosted (the Council of Agriculture) event to spur increased soy plantings. Its objectives are: 1) Increase Taiwan’s Soybean production from 5,000 tons to 25,000 tons in 5 years; 2) Increase planted area from the current 3000 ha to 10,000 ha, and 3) Increase domestic Soybean production to provide 10 percent of food consumption Soybean use according to the COA.
MY 2022/2023 total domestic consumption is forecast to decline slightly to 2.65 million tons based on tighter supply and higher prices. The MY 2021/2022 consumption estimate was 2.7 million tons. MY 2021/22 feed and residual use are expected to increase to 350,000 tons, while MY 2022/23 is forecast to be down to 300,000 tons. The remaining animal feed demand is being met by the higher use of full fat soy, which falls in this category. Buyers may prefer full fat Soybeans, which is preferable when vegetable oil supply is tight. Because of the more straightforward process, some of Taiwan’s feed millers can import Soybeans directly to make use of full fat Soybeans.
MY 2020/21 food use volume was around 280,000 tons. MY 2022/23 food use is forecast stable, with MY 2021/22 at 300,000 tons. Taiwan experienced its most significant COVID-19 episode in the second half of 2021. The hotel, restaurant, and institutional (HRI) sector was impacted by dine-in restrictions, which accounts for this decrease in food use. The country’s MY 2022/23 and MY 2021/22 Soybean crush are forecast to remain flat at 2.05 million tons. Domestic meal consumption, exports, and Soybean oil demand will likely sustain the crush rate.
The US-Taiwan Soybeans Trade
Taiwan relies on imports to meet 96 percent of its Soybean demand. MY 2021/22 Soybean imports are estimated at 2.62 million tons. MY 2022/23 imports are expected to recover slightly to 2.65 million tons on restocking needs. According to the Taiwanese Customs Statistics, the US held 55% import market while Brazil gained 42% market share in 2020-2021. Canada also shipped a small number of Soybeans. As per AgFlow data, the US led their import with 1.3 million tons in 2021-2022, followed by Brazil with 1.2 million tons.
Containers offer flexibility and discretion versus bulk vessels. With limited grain storage facilities in Taiwan, buyers also value the free time and detention provided. Containerized shipping remains the preferred method for importing food-grade and non-GE Soybeans. Container shipping represents an advantage for US exports since buyers can get more regular shipments and use the free time provided at the port as a temporary storage solution.
However, with the logistical and cost challenges for shipping containers throughout 2021, the United States has temporarily lost some export volume and market share in Taiwan. To avoid potential supply disruptions in containerized shipping, Taiwan’s buyers purchased more bulk vessels when possible. In December 2021, a bulk Soybean shipment from Brazil arrived in Taiwan in the middle of the seasonal US shipping window.
Problems continued to plague the US containerized grains exports in 2021, and much higher replacement costs will likely place further constraints on demand in MY 2022/23. Limited growth opportunities for vegetable oil consumption and the livestock industry will dampen the prospect of further growth in Soybean demand.
Other sources: https://www.usda.gov
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