Required Report - public distribution

**Date:** 04/30/2005

**GAIN Report Number:** TW5014

TW5014

**Taiwan**

**Grain and Feed**

**Annual**

**2005**

**Approved by:**

![](media/image1.wmf)Scott Sindelar

American Institute in Taiwan

**Prepared by:**

Chiou-Mey Perng & Eric Trachtenberg

**Report Highlights:**

Taiwan's wheat demand is expected to fall slightly to 1.06 million
metric tons in 2005/06. Although importers may continue experimenting
with small volumes of non-U.S. feed wheat imports, the United States is
expected to keep an 85+ percent share of the wheat market during the
forecast period. Taiwan's demand for corn imports in 2005/06 is forecast
at 4.89 million metric tons, continuing its slow decline. Most of this
decrease will come from falling Taiwan broiler production resulting from
the 2005 liberalization of chicken meat imports. Taiwan is moving to
require the use of corn-derived biodegradable bioplastics for several
products. In the years to come, this could significantly boost U.S. PLA
exports to Taiwan. Rice imports are expected to remain steady at the
quota-fixed 144,720 tons, with the U.S. remaining the dominant supplier
in the public tenders while Thailand and Egypt supply most of the
private sector imports. Note: The current exchange rate is \$1 =
NT\$31.3.

Includes PSD Changes: Yes

Includes Trade Matrix: No

Annual Report

Taipei \[TW1\]

\[TW\]

[SECTION I. COMMODITY SITUATION AND OUTLOOK
3](#section-i.-commodity-situation-and-outlook)

[Wheat Situation & Outlook 3](#wheat-situation-outlook)

[Table 1. Wheat Production, Supply and Demand, 1,000 MT
3](#table-1.-wheat-production-supply-and-demand-1000-mt)

[Production 3](#production)

[Consumption 3](#consumption)

[Stocks 4](#stocks)

[Trade 4](#trade)

[Policy 5](#policy)

[Corn Situation & Outlook 6](#corn-situation-outlook)

[Table 2. Corn Production, Supply and Demand, 1,000 MT
6](#table-2.-corn-production-supply-and-demand-1000-mt)

[Production 6](#production-1)

[Consumption 6](#consumption-1)

[Stocks 7](#stocks-1)

[Trade 7](#trade-1)

[Policy 8](#policy-1)

[Rice Situation and Outlook 11](#rice-situation-and-outlook)

[Table 3. Rice Production, Supply and Demand, 1,000 MT
11](#table-3.-rice-production-supply-and-demand-1000-mt)

[Production 11](#production-2)

[Consumption 12](#consumption-2)

[Stocks 12](#stocks-2)

[Table 4. Taiwan Rice Stocks Levels, 1994-2004, 1,000 MT
12](#table-4.-taiwan-rice-stocks-levels-1994-2004-1000-mt)

[Trade 12](#trade-2)

[Imports 12](#imports)

[Table 5. Import Summary Table for 2003-2004 Quota Fill
13](#table-5.-import-summary-table-for-2003-2004-quota-fill)

[Table 6: Rice Imports for 2004 in Metric Tons by HS code
14](#table-6-rice-imports-for-2004-in-metric-tons-by-hs-code)

[Exports 14](#exports)

[Table 7. Food Aid Statistics Table for 2003 (on a milled basis)
15](#table-7.-food-aid-statistics-table-for-2003-on-a-milled-basis)

[Policy 15](#policy-2)

[Marketing 15](#marketing)

[Table 8. Taiwan's Rice Purchase Programs
17](#table-8.-taiwans-rice-purchase-programs)

[SECTION II. STATISTICAL TABLES 18](#section-ii.-statistical-tables)

[Table 9. Rice Retail Prices, 2004-5
18](#table-9.-rice-retail-prices-2004-5)

[Table 10. Market Releases of Public Rice, as of April 21, 2005
18](#table-10.-market-releases-of-public-rice-as-of-april-21-2005)

[Table 11. Tariff Rates for Grains
19](#table-11.-tariff-rates-for-grains)

[Table 12. Meat Production for 2001-2005 in 1,000 mt
19](#table-12.-meat-production-for-2001-2005-in-1000-mt)

[Table 13. Feed Production for 2001-2005 in 1,000 mt
20](#table-13.-feed-production-for-2001-2005-in-1000-mt)

[Table 14. Non-Grain & Feed Reports Bibliography
20](#table-14.-non-grain-feed-reports-bibliography)

#   {#section .unnumbered}

# SECTION I. COMMODITY SITUATION AND OUTLOOK

# Wheat Situation & Outlook

## Table 1. Wheat Production, Supply and Demand, 1,000 MT

+-------------+--------+--------+-------+--------+---------+---------+
| PSD Table   |        |        |       |        |         |         |
+-------------+--------+--------+-------+--------+---------+---------+
| Country     | Taiwan |        |       |        |         |         |
+-------------+--------+--------+-------+--------+---------+---------+
| Commodity   | #      |        |       |        | (1000   |         |
|             | ###### |        |       |        | H       |         |
|             |  Wheat |        |       |        | A)(1000 |         |
|             |        |        |       |        | MT)     |         |
+-------------+--------+--------+-------+--------+---------+---------+
|             | 2003   | R      | 2004  | Es     | 2005    | F       |
|             |        | evised |       | timate |         | orecast |
+-------------+--------+--------+-------+--------+---------+---------+
|             | USDA   | Post   | USDA  | Post   | USDA    | Post    |
|             | Of     | Es     | Off   | Es     | O       | E       |
|             | ficial | timate | icial | timate | fficial | stimate |
|             | \      | \      | \[    | \      | \[Old\] | \[New\] |
|             | [Old\] | [New\] | Old\] | [New\] |         |         |
+-------------+--------+--------+-------+--------+---------+---------+
| **Market    |        | 0      |       | 0      |         | 07/2005 |
| Year        |        | 7/2003 |       | 7/2004 |         |         |
| Begin**     |        |        |       |        |         |         |
+-------------+--------+--------+-------+--------+---------+---------+
| Area        | 0      | 0      | 0     | 0      | 0       | 0       |
| Harvested   |        |        |       |        |         |         |
+-------------+--------+--------+-------+--------+---------+---------+
| Beginning   | 249    | 290    | 289   | 312    | 269     | 285     |
| Stocks      |        |        |       |        |         |         |
+-------------+--------+--------+-------+--------+---------+---------+
| Production  | 0      | 0      | 0     | 0      | 0       | 0       |
+-------------+--------+--------+-------+--------+---------+---------+
| TOTAL Mkt.  | 1216   | 1224   | 1100  | 1091   | 0       | 1050    |
| Yr. Imports |        |        |       |        |         |         |
+-------------+--------+--------+-------+--------+---------+---------+
| Jul-Jun     | 1216   | 1195   | 1100  | 1100   | 0       | 1050    |
| Imports     |        |        |       |        |         |         |
+-------------+--------+--------+-------+--------+---------+---------+
| Jul-Jun     | 1049   | 1020   | 0     | 935    | 0       | 900     |
| Import U.S. |        |        |       |        |         |         |
+-------------+--------+--------+-------+--------+---------+---------+
| **TOTAL     | **     | **     | **1   | **     | **269** | *       |
| SUPPLY**    | 1465** | 1514** | 389** | 1403** |         | *1335** |
+-------------+--------+--------+-------+--------+---------+---------+
| TOTAL Mkt.  | 26     | 0      | 20    | 0      | 0       | 0       |
| Yr. Exports |        |        |       |        |         |         |
+-------------+--------+--------+-------+--------+---------+---------+
| Jul-Jun     | 26     | 0      | 20    | 0      | 0       | 0       |
| Exports     |        |        |       |        |         |         |
+-------------+--------+--------+-------+--------+---------+---------+
| Feed Dom.   | 150    | 152    | 100   | 68     | 0       | 10      |
| Consumption |        |        |       |        |         |         |
+-------------+--------+--------+-------+--------+---------+---------+
| **TOTAL     | **     | **     | **1   | **     | **0**   | *       |
| Dom.        | 1150** | 1202** | 100** | 1118** |         | *1060** |
| Co          |        |        |       |        |         |         |
| nsumption** |        |        |       |        |         |         |
+-------------+--------+--------+-------+--------+---------+---------+
| Ending      | 289    | 312    | 269   | 285    | 0       | 275     |
| Stocks      |        |        |       |        |         |         |
+-------------+--------+--------+-------+--------+---------+---------+
| **TOTAL     | **     | **     | **1   | **     | **0**   | *       |
| DIS         | 1465** | 1514** | 389** | 1403** |         | *1335** |
| TRIBUTION** |        |        |       |        |         |         |
+-------------+--------+--------+-------+--------+---------+---------+

Note: 2003/04 revisions come from changes in official USDA numbers.

## 

## Production

Taiwan's wheat production is negligible.

## Consumption

Taiwan's wheat demand is expected to fall slightly to 1.06 million
metric tons in 2005/06, mostly because of lower feed wheat imports.
Taiwan's overall wheat consumption for milling is basically stable, with
more than 95 percent of imports used for milling. Consumption of milled
products may increase slowly, despite already high per-capita levels.
Supporting this increase is high noodle consumption and a dynamic wheat
food market driven by Taiwan's 6,000 bakeries, convenience stores, and
supermarkets. Intense competition between food manufacturers and strong
public interest in new food items encourages a high number of product
introductions. This boosts demand for wheat-based products, which is
supported by Taiwan miller production of specialty flour. Years ago, the
Taiwan flour market was simply divided into three categories: high,
medium and low protein flour. Nowadays, more than 30 different types of
specialty flour can be found on the Taiwan market.

## 

## Stocks

Taiwan ending stock levels for 2005/06 are expected to be 275,000 tons,
which is near the recent historical average of around three months of
consumption. During 2003/04, stocks were above normal levels because of
volatile world wheat prices. Taiwan usually steps up purchases in
response to increasing prices and postpones them when world grain prices
fall.

## Trade

Since Taiwan does not produce wheat, all demand is met by imports.
Although importers sometimes experiment with small imports of feed wheat
to offset high corn prices, the United States is expected to keep an 85+
percent share of the overall wheat market during the forecast period. In
2003/04, the U.S. had an 86 percent share, while Australia and India
supplied 7 percent each. All wheat sourced from India was for feed. The
United States had 92 percent share of Taiwan's total milling wheat
imports, while Australia supplied 7 percent.

As for milling wheat, Taiwan imports mostly U.S. #1 wheat, approximately
60 percent is HRS or DNS, while 28 percent is HRW, 11 percent Soft or
Western White Wheat, and 1 percent Durum. This mix varies each year
mostly depending on quality for the different classes of wheat. Despite
its already high levels, the U.S. market share for milling wheat has
potential to further increase over time because of the introduction of
U.S. Hard White Wheat into export channels in 2004. The superior milling
characteristics and price competitiveness of Hard White Wheat are
expected to cut Taiwan imports of Australian hard wheat. Although a
supply constraint has limited Taiwan imports of U.S. Hard White to only
5,000 tons in 2005 so far, the upward trend for Hard White is expected
to resume in the years to come. According to the Taiwan Flour Millers'
Association, Taiwan imported 12,000 tons of U.S. hard white and 47,000
tons of competing Australian wheat. This was a major change from a year
earlier when Taiwan imported 58,000 tons from Australia. Taiwan wheat
importers have mentioned that a stable wheat supply with reliable gluten
quality is critical for maintaining quality control of flour milling and
Chinese type noodle making.

Feed wheat imports are expected to remain small in the upcoming
marketing year, with the forecast at around 10,000 tons. In 2004 and
2005, feed wheat imports from India totaled 152,000 and 68,000 tons,
respectively. These imports by Taiwan swine producers were primarily a
result of high corn prices. In 2004, the average feed wheat CIF price
was \$159/mt versus \$168/mt for corn.

Flour imports will likely remain very low. In general, Taiwan imports a
very small amount of wheat flour that only accounts for about 2 percent
of the total supply. Flour imports in 2004 remained at 17,000 tons. All
but 2,000 tons of the total came from Japan.

## Policy

###### Cross-Straits Trade

The most serious potential threat to U.S. wheat exports is an opening to
PRC flour, wheat or processed products. Although liberalization
continues to be delayed by icy cross-straits relations, local industry
sources expect Taiwan to eventually lift import bans on PRC products.
Currently, Taiwan authorities review these restrictions every six
months, with the next review scheduled for September 2005. Taiwan
authorities also consider liberalization petitions from local companies
or industrial groups every two months. However, the ruling party's
pro-Independence stance and resistance to integration with the Mainland
makes it unlikely that Taiwan will reward China with wheat or wheat
product market liberalization any time soon. However, a recent
opposition party visit to PRC indicates a thaw in cross-straits
relations is still possible. In addition, the PRC has shown an increased
willingness to resolve bilateral phytosanitary issues and to provide MFN
for Taiwan's agricultural product exports. Eventually, Taiwan may have
to reciprocate.

If PRC imports of noodles and other processed products were allowed, PRC
products could compete strongly in the Taiwan instant noodle market. To
prepare for this eventuality, Taiwan's largest two instant noodle
producers have invested heavily in Mainland China and plan to ship from
the PRC if Taiwan ends its import ban. In preparation for
liberalization, one instant noodle company already uses the same brand
names for products sold on both sides of the Taiwan Strait. Since a
potential flood of Chinese products would greatly influence the Taiwan
flour and instant noodle market and possibly increase unemployment in a
contracting wheat/noodle sector, Taiwan will be reluctant to lift the
ban quickly.

Although the entry of PRC products would likely disrupt the Taiwan wheat
market, direct sales of Chinese wheat and wheat flour would face stiffer
competition. The dominant position of U.S. wheat in the market, its
reliable quality and supply along with the technical support offered by
U.S. Wheat Associates will make Taiwan millers and food manufacturers
reluctant to switch to alternative suppliers.

In the long-run, PRC wheat and products are expected to affect U.S.
wheat exports to Taiwan by cutting demand for HRW, WW and SW wheat while
possibly boosting it for DNS wheat. Since China produces middle protein
wheat and little high protein wheat, Taiwan millers anticipate stiff
competition in the low-end flour market, where flour is used for making
cookies and gluten products that account for 12 percent of the total
flour market. On the other hand, Taiwan millers hope to supply high
quality flour to the Mainland if China reciprocates a Taiwan market
opening. Outside of the milling sector, China's potential for feed grain
production has stimulated Taiwan feed miller interest in importing some
PRC feed wheat, especially if corn prices remain high.

[Taiwan Buying Practices and Investment Plans]{.underline}

The Taiwan flour milling industry continues to import through its
long-standing collective group purchasing system under which companies
pool their funds and jointly bring in large grain shipments to cut
costs. To increase Taiwan's milling competitiveness, the industry is
considering the construction of a NT\$1.5 billion (\$45 million) flour
mill with an annual capacity of 600,000 tons of wheat to be built at
Taichung harbor in central Taiwan.

# Corn Situation & Outlook

## Table 2. Corn Production, Supply and Demand, 1,000 MT

+--------------+--------+--------+--------+--------+--------+--------+
| PSD Table    |        |        |        |        |        |        |
+--------------+--------+--------+--------+--------+--------+--------+
| Country      | Taiwan |        |        |        |        |        |
+--------------+--------+--------+--------+--------+--------+--------+
| Commodity    | ###### |        |        |        | (1000  |        |
|              | # Corn |        |        |        | HA     |        |
|              |        |        |        |        | )(1000 |        |
|              |        |        |        |        | MT)    |        |
+--------------+--------+--------+--------+--------+--------+--------+
|              | 2003   | R      | 2004   | Es     | 2005   | Fo     |
|              |        | evised |        | timate |        | recast |
+--------------+--------+--------+--------+--------+--------+--------+
|              | USDA   | Post   | USDA   | Post   | USDA   | Post   |
|              | Of     | Es     | Of     | Es     | Of     | Es     |
|              | ficial | timate | ficial | timate | ficial | timate |
|              | \      | \      | \      | \      | \      | \      |
|              | [Old\] | [New\] | [Old\] | [New\] | [Old\] | [New\] |
+--------------+--------+--------+--------+--------+--------+--------+
| **Market     |        | 1      |        | 1      |        | 1      |
| Year Begin** |        | 0/2003 |        | 0/2004 |        | 0/2005 |
+--------------+--------+--------+--------+--------+--------+--------+
| Area         | 10     | 10     | 10     | 9      | 0      | 9      |
| Harvested    |        |        |        |        |        |        |
+--------------+--------+--------+--------+--------+--------+--------+
| Beginning    | 1310   | 1185   | 1510   | 1200   | 1560   | 1023   |
| Stocks       |        |        |        |        |        |        |
+--------------+--------+--------+--------+--------+--------+--------+
| Production   | 50     | 53     | 50     | 48     | 0      | 48     |
+--------------+--------+--------+--------+--------+--------+--------+
| TOTAL Mkt.   | 4900   | 5075   | 4700   | 4860   | 0      | 4890   |
| Yr. Imports  |        |        |        |        |        |        |
+--------------+--------+--------+--------+--------+--------+--------+
| Oct-Sep      | 4900   | 4806   | 4700   | 4800   | 0      | 4890   |
| Imports      |        |        |        |        |        |        |
+--------------+--------+--------+--------+--------+--------+--------+
| Oct-Sep      | 4749   | 4565   | 0      | 4560   | 0      | 4680   |
| Import U.S.  |        |        |        |        |        |        |
+--------------+--------+--------+--------+--------+--------+--------+
| TOTAL SUPPLY | 6260   | 6313   | 6260   | 6108   | 1560   | 5961   |
+--------------+--------+--------+--------+--------+--------+--------+
| TOTAL Mkt.   | 0      | 0      | 0      | 0      | 0      | 0      |
| Yr. Exports  |        |        |        |        |        |        |
+--------------+--------+--------+--------+--------+--------+--------+
| Oct-Sep      | 0      | 0      | 0      | 0      | 0      | 0      |
| Exports      |        |        |        |        |        |        |
+--------------+--------+--------+--------+--------+--------+--------+
| Feed Dom.    | 4450   | 4903   | 4400   | 4875   | 0      | 4680   |
| Consumption  |        |        |        |        |        |        |
+--------------+--------+--------+--------+--------+--------+--------+
| TOTAL Dom.   | 4750   | 5113   | 4700   | 5085   | 0      | 4890   |
| Consumption  |        |        |        |        |        |        |
+--------------+--------+--------+--------+--------+--------+--------+
| Ending       | 1510   | 1200   | 1560   | 1023   | 0      | 1071   |
| Stocks       |        |        |        |        |        |        |
+--------------+--------+--------+--------+--------+--------+--------+
| TOTAL        | 6260   | 6313   | 6260   | 6108   | 0      | 5961   |
| DISTRIBUTION |        |        |        |        |        |        |
+--------------+--------+--------+--------+--------+--------+--------+

## Production

Taiwan is not expected to produce corn in any significant quantities in
2005/06. Without a significant production subsidy, domestically produced
corn is not competitive with imported products. In recent years,
domestically produced feed corn has accounted for less than one percent
of total corn consumption.

## Consumption

In 2005/06, nearly 95 percent of forecast Taiwan's 4.89 million tons
(4.68 million tons) of corn consumption will go for feed use, with the
remaining 200,000 tons wet milled to produce corn syrup and 10,000 tons
dry milled to produce corn meal/grit.

Taiwan's demand for feed grains is expected to continue shrinking in
tandem with the expected reduction in livestock and poultry caused by
increasing meat imports. Total feed demand is forecast at 7.2 million
metric tons in 2005, down from 7.460 million metric tons in 2004.
Taiwan's feed corn consumption is expected to contract 4.6 percent in
line with a forecast reduction in local livestock production.
Replacement of the TRQs with liberalization in 2005 will likely sharply
increase imports of red meat and poultry in the next two years. Industry
sources expect this to result in an 11 percent of reduction in local
chicken production in 2005 and a 2 percent of contraction in both
chicken and swine sectors in 2006 (see TW5001: Soybean Situation and
Outlook Section). Approximately 45 percent of Taiwan's feed production
goes to the poultry sector, with most of the rest going to swine
production.

## Stocks

Taiwan ending stock levels for 2005/06 are expected to be 1.0 million
tons, which is around 100,000 tons below the recent historical average.
This is likely a result of lower consumption, which reduces the need to
hold stocks.

## Trade

Taiwan's corn imports in 2005/06 are forecast at approximately 4.9
million metric tons, which is close to 2004/05 levels. Although changes
in world corn prices may stimulate more feed wheat imports, these
shipments are not expected to have a major impact on Taiwan's corn
market.

[]{.mark}

In 2005/06, the United States is expected to remain Taiwan's major
supplier of corn, although high prices may slightly erode market share
by encouraging experimentation with feed wheat or corn from new origins.
High corn prices usually spur small-volume corn imports from non-U.S.
sources, with Argentina being the largest competitor. PRC and Thai corn
are also expected to enter Taiwan in small amounts along with minor
shipments from Southeast Asia. In 2003/04, the United States had a 95
percent share of Taiwan's total corn imports, while Mainland China took
2 percent, Thailand 1 percent and other counties combined 2 percent.
U.S. market share was up from 89 percent a year earlier.

[]{.mark}

During the forecast period, the largest threats to the U.S. corn market
in Taiwan are increasingly competitive south American corn exports to
Taiwan and a steeper than expected decline in Taiwan's broiler sector.
In the short-term, tightening PRC corn supplies and growing domestic
demand have reduced the immediate threat of large-scale corn exports to
Taiwan. Over the longer-term, increases in PRC corn production or
quality combined with the use of export subsidies are expected to
increase pressure on Taiwan to open its market. Geographical proximity,
the availability of smaller shipments and a possible improvement in the
cross-strait relationship could also create opportunities for PRC corn
in the future.

[Corn Substitutes]{.underline}

Although high corn prices may encourage some small imports of other feed
grains such as feed wheat or barley, it is unlikely that these products
will see large gains in market share. In 2004, Taiwan's feed inclusion
rate for corn remained at approximately 65 percent, based on corn supply
and feed production figures. The feed inclusion rate of other feed
grains combined was 0.35 percent (down by 0.5 percent from the previous
year), including approximately 140,000 tons of barley (33,000 tons in
2003), 52,000 tons of sorghum (69,000 tons in 2003), and 68,000 tons of
feed wheat (152,000 tons in 2003).

[]{.mark}

The Taiwan feed millers imported feed wheat for the first time in 2000.
Feed wheat imports are expected to decrease because of the availability
of Australian barley and a possible fall in world corn prices in 2005.
Taiwan has stopped the widespread use of rice for animal feed after
entering the WTO in January 2002.

[Development of Industrial Uses for Corn]{.underline}

The U.S. Grain Council (USGC) office in Taiwan has been developing the
Taiwan bioplastics market, which could eventually become a major outlet
for U.S. corn. USGC is also exploring ways to increase the use of
biodegradable plastics to meet demand created by growing environmental
restrictions on the use of non-biodegradable products. On March 16 2005,
Taiwan announced a demonstration program to support the use of
biodegradable plastics on Taiwan. During a six-month program, Wei Mon
Enterprises, a Taiwan bioplastics producer, will subsidize the extra
cost of these products that will be used primarily in supermarkets to
hold eggs, meat and bakery products. Simultaneously, Taiwan EPA will
promote the use of bioplastics by these retail food establishments. The
demonstration program will test the functionality of PLA products and
introduce them to the public. Afterwards, Taiwan EPA is expected to
require the use of bioplastics in food retail applications where
technically and economically feasible.

## Policy

[Cross-Straits Trade]{.underline}

In October 2002, Taiwan allowed the entry of PRC corn for the first
time, giving China its first opportunity to enter the Taiwan market. So
far, Taiwan has only authorized limited imports of many Chinese food
products to make up for local shortages, although there is a
liberalizing trend on all imports from China. PRC corn has only been
allowed entry during three periods:

-   October - December 2002, with imports of 71,000 tons

-   November 2003 - January 2004, with imports of 67,502 tons.

-   March - May 2004, with imports of 22,946 tons.

Since May 2004, the market has been closed again. Taiwan authorities
review these restrictions every six months, with the next formal review
scheduled for September 2005. Taiwan also review petitions submitted by
industry groups. Several feed millers with investments in China have
linked up with Taiwan swine producers to petition the island's
authorities to permanently end the import ban.

[]{.mark}

Although periodic market openings to PRC corn may continue, allowing its
entry permanently is a major step that would only likely occur after
lengthy deliberations. There are several reasons for this caution: One,
Taiwan commercial feed millers/corn importers have resisted the
introduction of PRC corn because it will undermine their long-standing
group buying arrangements that have allowed companies to import large
cargoes on favorable terms. Two, the PRC has not proven to be a reliable
supplier to other markets because it has cancelled shipments with little
advance notice. Three, PRC corn is of uncertain quality, which could
complicate attempts to calculate feed rations. Four, China appears to be
subsidizing corn exports, which is contrary to its WTO Accession
Agreement commitments. The export subsidy was the major reason why PRC
corn was competitive in Taiwan in 2002-2004.

[]{.mark}

If the ban were lifted, the geographic proximity of Northeast China to
Taiwan could allow smaller shipments, faster delivery and lower carrying
costs for Taiwan importers relative to U.S. corn. PRC shipments could
also make it possible for small firms to import corn independently of
the traditional major buying groups. On the other hand, China's
advantage in making small shipments may be offset when U.S. feed grain
suppliers are able to use containerized shipments to supply Taiwan when
ocean freight costs rise. The very low container backhaul rates to
Taiwan from the U.S. could make this an attractive prospect for U.S.
grain exporters. Reportedly, more than 200,000 tons of U.S. corn was
shipped to Taiwan via containers in 2004.

[Livestock Initiatives]{.underline}

To adjust to post-WTO trade conditions and 2005 import liberalization,
Taiwan's livestock and feed industries are working to improve the
competitiveness of Taiwan poultry and swine production. The National
Animal Industry Foundation (NAIF) was formed in January 2000 to support
the differentiation between locally produced chicken and pork products
from imported products by establishing logos related to freshness and
taste. The Taiwan Council of Agriculture (COA) is also attempting to
improve the quality of domestically produced meat and poultry products
in order to compete more effectively with imported products. COA has
also worked to reestablish Taiwan's Food and Mouth Disease (FMD) free
status in order to resume Taiwan's pork exports to Japan. Despite COA's
efforts, FMD free status without vaccination is still at least one year
away.

[Biotechnology Update]{.underline}

On February 23, 2001, the Taiwan Department of Health (DOH) promulgated
regulations on bioengineered food labeling and registration. Although
these regulations only applied to soybeans and corn and products, they
will likely expand to other products in the future. Taiwan's
bioengineered food safety approval and labeling regulation took effect
on January 1, 2003. From this time, no bioengineered soybean and corn
may be produced, processed, prepared, packed, and imported or exported
unless they are registered. All bioengineered varieties of soybeans and
corn must be registered and approved by the Food Safety Bureau (FSB) of
the Department of Health (DOH).

Corn food products made of non-bioengineered materials can be labeled
\"Non-Genetically-Modified\" on a voluntary basis. The labeling
regulations will not apply to products that do not contain pieces of
transgene(s) or protein such as cornstarch, corn syrup and corn oil.
Taiwan will use a 5 percent tolerance level by weight to determine a
product's bioengineered status. Corn foods sold at traditional \"wet\"
markets and at restaurants will not require labeling, a practice that
was recently criticized by consumer groups.

Taiwan has approved 11 of the most widely commercialized bioengineered
corn and soybean events. It is currently drafting a basic law to cover
all products derived from biotechnology. The first draft law was
completed and was published on March 23, 2005, for comment. The draft,
along with any comments, will subsequently be discussed in the GM
Products Task Force, which is under the Executive Yuan ("EY" or
cabinet). After this, the bill will be submitted to the EY for review
before going to the Legislative Yuan (parliament) for consideration.
Taiwan has no clear timeline over how long it will take to finalize the
biotech law.

In the meantime, Taiwan has been increasing its funding for biotech food
regulation. It recently allocated a two-year capacity building budget of
NT\$1.4 million or \$420,000 to facilitate conducting food safety
assessments. This figure is up several times from earlier levels.

Taiwan is also currently drafting implementing regulations for LMOs
under the terms of its recently amended Plant Variety and Plant Seed
Act. An early draft of its biotech products import-export regulation
that included grains for food, feed or for processing into Taiwan has
been changed to exclude regulation of trade of these products. However,
in the future, it is expected that Taiwan will amend its Feed Control
Act to regulate feed grains derived from modern biotechnology.

[U.S. -- Taiwan Goodwill Missions]{.underline}

In September 2003, Taiwan importers signed a Letter of Intent to import
a minimum of 7.5 million tons of corn and 3.2 million tons of soybeans
in 2003 and 2004. Private Taiwan importers rather than government
agencies fulfill these non-binding commitments. Signing ceremonies for
these agreements typically take place in Washington, D.C. Discussions
about a mission in 2005 continue.

#  

# Rice Situation and Outlook

## Table 3. Rice Production, Supply and Demand, 1,000 MT 

+---------------+-------+-------+-------+--------+--------+--------+
| PSD Table     |       |       |       |        |        |        |
+---------------+-------+-------+-------+--------+--------+--------+
| Country       | T     |       |       |        |        |        |
|               | aiwan |       |       |        |        |        |
+---------------+-------+-------+-------+--------+--------+--------+
| Commodity     | ##### |       |       |        | (1000  |        |
|               | ## Ri |       |       |        | HA     |        |
|               | ce, M |       |       |        | )(1000 |        |
|               | illed |       |       |        | MT)    |        |
+---------------+-------+-------+-------+--------+--------+--------+
|               | 2003  | Re    | 2004  | Es     | 2005   | Fo     |
|               |       | vised |       | timate |        | recast |
+---------------+-------+-------+-------+--------+--------+--------+
|               | USDA  | Post  | USDA  | Post   | USDA   | Post   |
|               | Off   | Est   | Off   | Es     | Of     | Es     |
|               | icial | imate | icial | timate | ficial | timate |
|               | \[    | \[    | \[    | \      | \      | \      |
|               | Old\] | New\] | Old\] | [New\] | [Old\] | [New\] |
+---------------+-------+-------+-------+--------+--------+--------+
| **Market Year |       | 01    |       | 0      |        | 0      |
| Begin**       |       | /2003 |       | 1/2004 |        | 1/2005 |
+---------------+-------+-------+-------+--------+--------+--------+
| Area          | 272   | 272   | 264   | 237    | 0      | 258    |
| Harvested     |       |       |       |        |        |        |
+---------------+-------+-------+-------+--------+--------+--------+
| Beginning     | 245   | 385   | 304   | 451    | 231    | 362    |
| Stocks        |       |       |       |        |        |        |
+---------------+-------+-------+-------+--------+--------+--------+
| Milled        | 1164  | 1164  | 1027  | 1011   | 0      | 1025   |
| Production    |       |       |       |        |        |        |
+---------------+-------+-------+-------+--------+--------+--------+
| Rough         | 1651  | 1648  | 1467  | 1434   | 0      | 1454   |
| Production    |       |       |       |        |        |        |
+---------------+-------+-------+-------+--------+--------+--------+
| MILLING RATE  | 7049  | 7063  | 7000  | 7049   | 0      | 7049   |
| (.9999)       |       |       |       |        |        |        |
+---------------+-------+-------+-------+--------+--------+--------+
| TOTAL Imports | 135   | 151   | 125   | 156    | 0      | 126    |
+---------------+-------+-------+-------+--------+--------+--------+
| Jan-Dec       | 125   | 151   | 125   | 156    | 0      | 126    |
| Imports       |       |       |       |        |        |        |
+---------------+-------+-------+-------+--------+--------+--------+
| Jan-Dec       | 0     | 115   | 0     | 83     | 0      | 63     |
| Import U.S.   |       |       |       |        |        |        |
+---------------+-------+-------+-------+--------+--------+--------+
| TOTAL SUPPLY  | 1544  | 1700  | 1456  | 1618   | 231    | 1513   |
+---------------+-------+-------+-------+--------+--------+--------+
| TOTAL Exports | 90    | 49    | 100   | 56     | 0      | 30     |
+---------------+-------+-------+-------+--------+--------+--------+
| Jan-Dec       | 100   | 49    | 100   | 56     | 0      | 30     |
| Exports       |       |       |       |        |        |        |
+---------------+-------+-------+-------+--------+--------+--------+
| TOTAL Dom.    | 1150  | 1200  | 1125  | 1200   | 0      | 1200   |
| Consumption   |       |       |       |        |        |        |
+---------------+-------+-------+-------+--------+--------+--------+
| Ending Stocks | 304   | 451   | 231   | 362    | 0      | 283    |
+---------------+-------+-------+-------+--------+--------+--------+
| TOTAL         | 1544  | 1700  | 1456  | 1618   | 0      | 1513   |
| DISTRIBUTION  |       |       |       |        |        |        |
+---------------+-------+-------+-------+--------+--------+--------+

(PSD Note: Due to U.S. West Coast Port Lockout in late 2002, U.S.
exports for 2002 were moved into 2003. This reduced 2002 rice imports to
76 tmt instead of the full quota amount of 126 tmt. In addition, 29,229
mt of the 2003 public imports were delivered in 2004. It is anticipated
about the same amount of public quota rice entered into Taiwan in the
following year because Taiwan tenders for U.S. new crop rice which
available in the market after September. As a result, imports were 151
tmt and 126 tmt in 2003 and 2004, respectively.)

## Production

Rice production is expected to remain just slightly above 1 million tons
to accommodate the 144,720 mt (brown basis) of imported rice allowed
entry since 2002. In 2002, rice imports did not significantly impact the
local rice market because imports began late in the year. However,
anticipation of rice imports pushed local rice market prices to a decade
low of NT\$29/kg in 2003. To put a floor under prices, COA increased its
purchases of rice, referred to as "import relief purchases", to balance
the market. Since February 2004, rice retail market prices rose strongly
to NT\$34/kg. This price was higher than the average rice retail price
at NT\$32/kg in 2001, the year before Taiwan opened to rice imports.

Higher prices also enabled Taiwan to release publicly imported rice to
the market quickly in 2004-2005. As of April 22 2005, Taiwan has
released 160,000 mt of centralized imported rice to the local market,
equivalent to 1.7 year's worth of public imports. The most recent
release was announced April 21, 2005, see Table 10 below for further
details.

[]{.mark}

Starting in Spring 2005, the success of Thai fragrant rice imports has
spurred commercialization of a new local fragrant rice variety in
northern Taiwan. So far, the new Taiwan fragrant rice has been well
received by local consumers. In addition, a new glutinous rice variety
and a high-end Japanese variety were commercialized in 2004 and 2005. To
differentiate local from imported product, Taiwan sells local rice with
variety, specialty and geographical (county) labeling.

## Consumption

The total domestic rice consumption forecast remains at about 1.2
million tons, with per capita consumption at 52.05 kg in 2004. Since
rice is a major staple food, its consumption is very stable. Market
promotions are unlikely to increase total demand, but could shift rice
it significantly between varieties and origins.

## Stocks

Taiwan ending rice stocks are expected to fall because of declining
local production and increasing sales of rice imported by the public
sector. This reversed a 2003 build-up in stocks to 451,000 tons that was
the result of slow sales of publicly imported rice and a larger than
expected Taiwan harvest. Ending stocks in 2005 are expected to be the
lowest on record.

## Table 4. Taiwan Rice Stocks Levels, 1994-2004, 1,000 MT

  ------------ ------------ ---------- ----------- ---------- ------------
  YEAR         1994 -- 2001 2002       2003        2004       2005
               Average                                        (forecast)

  Ending       554          385        451         362        283
  Stocks                                                      
  ------------ ------------ ---------- ----------- ---------- ------------

## 

## Trade

## Imports

In 2003, Taiwan switched its import regime to a Tariff Rate Quota (TRQ)
system from the Minimum Market Access (MMA) system used in 2002, its
first year in the WTO. The total quota amount remains at 144,720 mt on a
brown rice basis (equivalent to 126,000 tons on a milled rice basis). Of
this total, 65 percent is reserved for government purchases and 35
percent for the private trade. All grain dealers who have registered
with COA and have a grain dealer license may bid for rice import quotas.
The out-of-quota tariff rate is NT\$45/kg for rice and NT\$49/kg for
processed rice products, with conversion factor of 1.15 to convert from
milled or processed products to brown rice.

Taiwan's change to a TRQ system was submitted to the WTO in October
2002. In December 2002, it passed enabling legislation without prior
consultation with WTO members, triggering a formal objection from the
U.S., Australia, and Thailand in Geneva. The objections were based on
Taiwan's lack of consultation, the removal of previous negotiated WTO
headnote language and associated concessions, and the extremely high out
of quota duty. Taiwan and its trading partners continue to make slow
progress in resolving the issue.

Although Taiwan has switched to a TRQ regime, it has fulfilled its
obligation to import full quota amount of rice, with virtually 100
percent of fill rates for quotas both in public and private trade. See
Table 5 below for quota fill data.

## Table 5. Import Summary Table for 2003-2004 Quota Fill

  ------------- --------- --------- --------- -------- ---------- --------- ---------- --------
  Origin        2003                                   2004                            

                Public    Private   Total     Import   Public     Private   Total      Import
                Trade     Trade     Imports   Share    Trade (mt) Trade     Imports    Share
                (mt)      (mt)      (mt)                          (mt)      (mt)       

  The United    70,068    4,676     74,744    51.7%    77,826.5   6,605     84,431.5   58.3%
  States                                                                               

  Thailand      6,000     31,056    37,056    25.6%    6,241.5    24,431    30,672.5   21.2%

  Australia     8,000     268       8,268     5.7%     10,000     222       10,222     7.1%

  Egypt         10,000    14,265    24,265    16.8%    0          19,081    19,081     13.2%

  Japan         0         298       0         0.2%     0          256       256        0.2%

  Other         0         18        18        \--      0          39        39         \--
  Countries                                                                            

  Grand Total   94,068    50,581    144,649   100%     94,068     50,634    144,702    100%

  Quota Fill    99.951%                                99.999%                         
  Rate                                                                                 

  *Source:                                                                             
  Council of                                                                           
  Agriculture                                                                          
  (COA)*                                                                               
  ------------- --------- --------- --------- -------- ---------- --------- ---------- --------

###### Private Trade

Thailand had a 48 percent share of the 2004 rice private trade, followed
by Egypt with 38 percent, the United States 13 percent, and Japan and
Australia each had less than 1 percent.

Under the TRQ, importers bid for quota rights that are sold to the
highest bidders first. Using the so-called "System Three" quota bidding
system, Taiwan has already successfully allocated 35,652 mt out of all
50,652 mt (brown basis) of 2004 quota rights to local importers, with
the bid prices ranging from NT\$11.280/kg to NT\$17.000/kg (brown
basis). The specific quota allocation results for the private trade are
reported in GAIN TW3049, TW4006, TW4017 and TW5010. Prices in 2005 were
higher then in 2004. The cost for quota rights in 2004 reflects
conditions in the local rice markets -- higher local prices make import
rights more valuable.

[]{.mark}

As of April 2005, the private quota for 2004 was 100 percent filled.
Taiwan did not even have to use its quota reallocation mechanism in
2004/05, which redistributes unused import rights. Only a few quota
holders who failed to import rice before September 15 had to request
extension of their quota rights to the end of year.

[Public Trade]{.underline}

The United States continues to dominate the public rice trade, with a
75, 67 and 83 percent share in 2002-2004 public imports, respectively.
In 2004, Australia captured an 11 percent share and Thailand 6 percent,
while Egypt didn't participate in the rice tenders. To address concerns
about food safety and quality, Taiwan has amended its rice tender
specifications in 2005. Please refer to TW5009 for specific changes.

[]{.mark}

The 2005 public tender schedule for public imports was reported in
TW4054, which is scheduled to run March-September. As of mid-April,
Taiwan has tendered and contracted for 12,000 mt of medium brown grain
(U.S. supply) and 3,450 mt of milled glutinous long grain (Thai supply).

[Tight Supplies of Glutinous Rice Continue]{.underline}

Taiwan produces approximately 65,000 mt of glutinous rice a year, with
domestic supply and demand generally balanced in most years. In 2004,
glutinous rice prices increased sharply because of the timing of the
Chinese New Year and the Dragon Boat Festival, which both come before
the Taiwan spring rice harvest. This generally only happens every four
years when planting season starts late because of the leap year.
Although Taiwan imported 22,000 tons of glutinous rice in 2004,
glutinous rice market prices remain at rather high levels at NT\$44/kg
for short grain and NT\$43/kg for long grain milled glutinous. This
desire to stabilize prices is the primary reason why Taiwan has
continued to tender for glutinous rice in 2005.

## Table 6: Rice Imports for 2004 in Metric Tons by HS code 

  ---------------------- ---------------- ----------------- --------------- -------------- ---------- -------------
  Origin                 HS100620         HS100620          HS100630-0010   HS10063-0090   HS100640   Total/Share
                         (brown-public)   (milled-public)   (glutinous)     (milled-       (broken)   
                                                                            private)                  

  U.S.A.                 86,437           75,200            790             6,726          0          82,716/53%

  Australia              17,171           14,939            0               183            0          15,122/10%

  Egypt                  8,107            7,053             0               16,814         0          23,867/15%

  Myanmar                0                0                 0               198            0          198

  Thailand               6,550            5,699             19,748          6,489          780        32,716/21%

  Vietnam                0                0                 1,744           0              0          1,744/1%

  Others                 17               15                0               11             0          26

  Total                  118,282          102,906           22,282          30,421         780        156,389

  Source: Council of                                                                                  
  Agriculture (COA)                                                                                   
  website at                                                                                          
  http//www.coa.gov.tw                                                                                
  ---------------------- ---------------- ----------------- --------------- -------------- ---------- -------------

## Exports

Taiwan stopped selling surplus rice onto the world market at discounted
prices after WTO entry.

In 2004, commercial exports amounted to only 43 mt, of which 18 mt was
destined for Japan. Taiwan's rice industry was very proud of its chance
to enter the Japan market since its exports meet Japan's sanitary
standards, one of the most stringent in the world. Taiwan authorities
and growers have used this Japan trade to promote domestically grown
rice to local consumers.

Taiwan also sent 56,000 tons of rice (milled basis) as food aid to needy
countries in 2004 to control stocks.

## Table 7. Food Aid Statistics Table for 2003 (on a milled basis)

  ------------------------------------ ----------------------------------
  Destination                          Tonnage

  Dominican Republic                   20,000

  Indonesia                            16,900

  Mongolia                             10,100

  Haiti                                5,000

  Iran                                 2,600

  Kiribati                             1,000

  Bangladesh                           600

  Tanzania                             40

  Tuvalu                               40

  Marshall Islands                     40

  Total                                56,312

  Source: Council of Agriculture (COA) 
  ------------------------------------ ----------------------------------

## Policy 

Imported rice continues to be inspected on a lot-by-lot basis for
pesticide residues, heavy metal and aflatoxin by the Bureau of
Standards, Metrology and Inspection (BSMI). This raises some national
treatment concerns as Taiwan rice does not appear to be subject to such
inspection. In March 2004, this issue was mitigated slightly when the
Agriculture and Food Agency (AFA) under the Council of Agriculture moved
to monitor pesticide residues in domestically produced agricultural
products, including rice.

## Marketing

The introduction of imported rice has resulted in the diversification of
the Taiwan rice market into different origins and varieties. Taiwan
customers now have the choice of many different types of rice, including
Calrose, Koshihikari, Jasmine or Tamanishiki. With the exception of
specialty rices, Taiwan customers prefer local freshly produced and
milled rice. Calrose doesn't fall in the specialty rice category and
goes to institutional use, which accounts for 65 to 70 percent of total
rice distribution. Institutional use is also stimulated by the lack of a
price premium for Calrose on the Taiwan market. However, many Taiwan
millers prefer marketing a 20/80 Calrose/Taiwan rice mix to increase
profits. However, specialty rice such as Jasmine Thai rice or Missouri
rice, Koshihikari, organic brown, rice with germ, and certified Taiwan
good quality rice are priced higher than general rice varieties. The USA
Rice Federation has launched its consumer promotion activities in 2004
and 2005 to promote 100 percent pack U.S. rice to increase consumer
awareness of U.S. high quality rice.

[]{.mark}

The diversification of rice products and the presence of new premium
varieties has made local consumers increasingly concerned about false
labeling of commercially packed rice. To help ensure that people get
what they pay for, COA is conducting research on how to better monitor
rice freshness, varieties, and origins to ensure more truth in labeling.
Current rice labeling guidelines require that commercially packed rice
list rice origin, local production county for Taiwan rice, or both for
mixed origins. There is an ongoing project to build a \"rice DNA
fingerprint data bank\" to cover rice varieties from Taiwan, the United
States, Australia, Thailand, and Mainland China. DNA fingerprints will
help prevent false labeling on rice packages and illegally transshipped
rice.

Taiwan rice millers are using different market strategies to respond to
the post-WTO market. Large millers are both importing and investing in
new milling/packing facilities to improve quality in order to compete
with imported products. One top local miller has taken out newspaper ads
for imported U.S., Japanese, Australian, and Thai rice sold under his
brand. Some millers claim that they will stick with locally grown rice
and segregate it from imports though advertising. COA is training its
staff to inspect packaged rice in retail outlets to improve domestically
grown rice quality in order to be able to compete more effectively with
imported rice.

[]{.mark}

Taiwan rice producers have also attempted to gain from other changes in
consumption. With the rise of fusion food, Taiwan rice producers have
aimed to compete with imported rice from various suppliers though menu
promotions using local equivalents of Risotto, Southeast Asia chicken
rice and Xing-Jiang rice. These promotional activities of locally
produced rice are becoming market challenges to the U.S. Rice Export
Federation's menu promotions.

Since Taiwan's rice production cost is much higher than imported rice,
Taiwan agricultural authorities have been working with local rice
millers/farmers to improve quality under a voluntary Taiwan Good Rice
Program. In September 2004, the first ever rice contest was held to
highlight Taiwan's best rices. The champion rice was sold thru auctions
to encourage rice farmers to focus on high quality rice. The champion
rice was sold at NT\$6,000/kg, the second prized rice sold at
NT\$5,000/kg, the 3^rd^ at NT\$4,000/kg. Despite these efforts, the
local HRI sector remains skeptical, especially because of the high
prices for local rices.

######## Guaranteed Rice Purchase Prices

Two voluntary programs exist under which farmers can sell rice to Taiwan
central authorities for pre-established prices: the guaranteed purchase
program, and the price guidance program. Sales under these programs are
limited to certain quantities per hectare. If a farmer were to sell the
maximum per-hectare quantities allowable under these two programs,
program sales would roughly equal half of production.

The basic purchase program has not changed fundamentally since 1993.
However, in October 2003, Council of Agriculture (COA) allocated a NT\$2
billion (approximately \$600 million) from the Import Relief Measure
funds to purchase additional paddy rice to stabilize the local rice
market. The eligible amount of import relief purchase is set at 3,000
kg/ha for the spring crop and 2,360 kg/ha for the second crop. These
were calculated on the five-year average production level subtract the
1,440 kg of guaranteed purchases. The import relief purchases were
triggered by declining paddy rice prices that slipped by 18 percent
below the five-year average level of NT\$15.6/kg. These lower prices
were a result of Taiwan's larger than expected rice harvest and
implementation of Taiwan's WTO commitment to import 144,720 tons of
rice. The import relief purchases pushed up the paddy rice price to
NT\$16.2/kg on December 12, 2003, and the current paddy prices are
NT\$20.58/kg and NT\$18.33/kg for Japonica and Indica rice,
respectively.

Taiwan plans to use the import relief purchase mechanism again if prices
for the fall crop dip below the "acceptable level" of NT\$16.6/kg.
Farmers have been pressing to increase the import relief purchase price
to NT\$23/kg to their reflect production costs, but the request was
refused because it would have likely pushed Taiwan's AMS above WTO
limits. Higher payments would have also created an incentive to increase
production further, creating more downward pressure on the rice market
while pushing up stocks levels and complicating plans to dispose of
domestically produced rice.

## Table 8. Taiwan's Rice Purchase Programs

+------------+------------------+------------------+------------------+
|            | **Guaranteed     | **Guidance       | **Import Relief  |
|            | Purchase**       | Purchase**       | Purchase**       |
|            |                  |                  |                  |
|            | **(paddy         | **(paddy         | **(paddy         |
|            | basis)**         | basis)**         | basis)**         |
+------------+------------------+------------------+------------------+
| Variety    | Price NT\$/kg    | Price NT\$/kg    | Price NT\$/kg    |
+------------+------------------+------------------+------------------+
| Japonica   | 21               | 18               | 16.6             |
| rice       |                  |                  |                  |
+------------+------------------+------------------+------------------+
| Indica     | 20               | 17               | 15.6             |
| rice       |                  |                  |                  |
+------------+------------------+------------------+------------------+
|            | Quantity kg/ha   | Quantity kg/ha   | Quantity kg/ha   |
+------------+------------------+------------------+------------------+
| Spring     | 1,920            | 1,200            | 3,000            |
| Crop       |                  |                  |                  |
+------------+------------------+------------------+------------------+
| Fall Crop  | 1,440            | 800              | 2,360            |
+------------+------------------+------------------+------------------+

Source: Taiwan Council of Agriculture

# SECTION II. STATISTICAL TABLES

## Table 9. Rice Retail Prices, 2004-5

  ---------------------------- ------------ ------------------- ----------
  Prices Table                                                  

  Country                      Taiwan                           

  Commodity                    Rice, Milled                     

  Prices in                    NT Dollar    per uom             100 kg

                                                                

  Year                         2004         2005                \% Change

  Jan                          2994         3474                16%

  Feb                          3239         3477                7%

  Mar                          3285         3486                6%

  Apr                          3493         3489                0%

  May                          3418                             -100%

  Jun                          3343                             -100%

  Jul                          3221                             -100%

  Aug                          3171                             -100%

  Sep                          3163                             -100%

  Oct                          3234                             -100%

  Nov                          3459                             -100%

  Dec                          3474                             -100%

                                                                

  Exchange Rate                31.44        Local Currency/US   
                                            \$                  

  Date of Quote                04/25/2005   MM/DD/YYYY          
  ---------------------------- ------------ ------------------- ----------

## Table 10. Market Releases of Public Rice, as of April 21, 2005

+-------------+------------+-----------+--------------+----------------+
| types of    | origins    | released  | released     | \*Wholesale    |
| grains/crop |            | quantity  | price        | market price   |
| year        |            | in mt     |              | in April 2005  |
+=============+============+===========+==============+================+
| Medium      | U.S.A.     | 100       | NT\$23.31/kg | NT\$25.96/kg   |
| brown/ 2002 |            |           |              |                |
+-------------+------------+-----------+--------------+----------------+
| Medium      | U.S.A.     | 2,090     | NT\$23.63/kg | NT\$25.96/kg   |
| brown/2003  |            |           |              |                |
+-------------+------------+-----------+--------------+----------------+
| Medium      | U.S.A.     | 1,600     | NT\$24.94/kg | NT\$25.96/kg   |
| brown/2003  |            |           | (cold        |                |
|             |            |           | storaged     |                |
|             |            |           | rice)        |                |
+-------------+------------+-----------+--------------+----------------+
| Medium      | U.S.A.     | 200       | NT\$26.25/kg | NT\$25.96/kg   |
| brown/2004  |            |           |              |                |
+-------------+------------+-----------+--------------+----------------+
| Short       | Australia  | 391.94    | NT\$23.63/kg | NT\$25.96/kg   |
| brown/2003  |            |           |              |                |
+-------------+------------+-----------+--------------+----------------+
| Long milled | Thailand   | 400       | NT\$27.00/kg | NT\$36.23/kg   |
| glu         |            |           |              |                |
| tinous/2003 |            |           |              |                |
+-------------+------------+-----------+--------------+----------------+
| Long milled | Thailand   | 100       | NT\$30.00/kg | NT\$36.23/kg   |
| glu         |            |           |              |                |
| tinous/2004 |            |           |              |                |
+-------------+------------+-----------+--------------+----------------+
| Short       | U.S.A.     | 200       | NT\$35.82/kg | NT\$39.36/kg   |
| milled      |            |           |              |                |
| glu         |            |           |              |                |
| tinous/2004 |            |           |              |                |
+-------------+------------+-----------+--------------+----------------+
| \*The       |            |           |              |                |
| quoted      |            |           |              |                |
| wholesale   |            |           |              |                |
| prices are  |            |           |              |                |
| Japonica    |            |           |              |                |
| brown rice, |            |           |              |                |
| milled long |            |           |              |                |
| and short   |            |           |              |                |
| grain       |            |           |              |                |
| glutinous   |            |           |              |                |
| rice,       |            |           |              |                |
| re          |            |           |              |                |
| spectively, |            |           |              |                |
| which are   |            |           |              |                |
| official    |            |           |              |                |
| prices      |            |           |              |                |
| published   |            |           |              |                |
| by COA and  |            |           |              |                |
| are a       |            |           |              |                |
| general     |            |           |              |                |
| average     |            |           |              |                |
| price, with |            |           |              |                |
| no          |            |           |              |                |
| indication  |            |           |              |                |
| of crop     |            |           |              |                |
| year or     |            |           |              |                |
| grade. The  |            |           |              |                |
| COA set     |            |           |              |                |
| market      |            |           |              |                |
| released    |            |           |              |                |
| prices do   |            |           |              |                |
| reflect     |            |           |              |                |
| crop years  |            |           |              |                |
| and storage |            |           |              |                |
| conditions  |            |           |              |                |
| etc market  |            |           |              |                |
| value       |            |           |              |                |
| factors.    |            |           |              |                |
|             |            |           |              |                |
| Source:     |            |           |              |                |
| Council of  |            |           |              |                |
| A           |            |           |              |                |
| griculture. |            |           |              |                |
+-------------+------------+-----------+--------------+----------------+

## Table 11. Tariff Rates for Grains

+---------------------+---------------------+--------------------------+
| HS Code             | Grains              | Current Tariff (%)       |
+=====================+=====================+==========================+
| 1001.10 & 1001.90   | Wheat               | 6.5                      |
+---------------------+---------------------+--------------------------+
| 1101.00             | Wheat Flour         | 17.5                     |
+---------------------+---------------------+--------------------------+
| 1005.10             | Corn                | 0                        |
+---------------------+---------------------+--------------------------+
| 1007.00             | Sorghum             | 0                        |
+---------------------+---------------------+--------------------------+
| 1003.00             | Barley              | 0                        |
+---------------------+---------------------+--------------------------+
| 1006                | Rice                | NT\$49 per kg\*\*        |
+---------------------+---------------------+--------------------------+
|                     | Source: Taiwan      |                          |
|                     | Customs Tariff      |                          |
|                     | Schedule            |                          |
|                     |                     |                          |
|                     | \*\*Out of Quota    |                          |
|                     | rate for            |                          |
|                     | unprocessed rice.   |                          |
|                     | Private Sector rice |                          |
|                     | imports will enter  |                          |
|                     | through the System  |                          |
|                     | 3 auction quota     |                          |
|                     | allocation system   |                          |
|                     | with a price        |                          |
|                     | ceiling at          |                          |
|                     | NT\$23.26 per kg    |                          |
+---------------------+---------------------+--------------------------+

## 

## Table 12. Meat Production for 2001-2005 in 1,000 mt

  -----------------------------------------------------------------------
  Production    2001       2002       2003       2004       2005
                                                            (forecast)
  ------------- ---------- ---------- ---------- ---------- -------------
  Pork          962        935        893        895        884

  Poultry       697        697        685        638        621
  -----------------------------------------------------------------------

Source: Council of Agriculture

## Table 13. Feed Production for 2001-2005 in 1,000 mt

+-----------------+---------+---------+---------+---------+----------+
| Feed Production | 2001    | 2002    | 2003    | 2004    | 2005     |
|                 |         |         |         | (es     | (f       |
|                 |         |         |         | timate) | orecast) |
+=================+=========+=========+=========+=========+==========+
| Total Compound  | 7,730   | 7,563   | 7,544   | 7,460   | 7,200    |
| Feed Produced   |         |         |         |         |          |
+-----------------+---------+---------+---------+---------+----------+
| by commercial   | 5,015   | 4,921   | 5,083   | 5,060   | 4,851    |
| producers       |         |         |         |         |          |
+-----------------+---------+---------+---------+---------+----------+
| by integrated   | 2,715   | 2,642   | 2,461   | 2,400   | 2,349    |
| producers       |         |         |         |         |          |
+-----------------+---------+---------+---------+---------+----------+
| Note: Feed      |         |         |         |         |          |
| production      |         |         |         |         |          |
| estimates are   |         |         |         |         |          |
| based on the    |         |         |         |         |          |
| preliminary     |         |         |         |         |          |
| official data   |         |         |         |         |          |
| for 2003        |         |         |         |         |          |
|                 |         |         |         |         |          |
| Source: Data    |         |         |         |         |          |
| for 2000-2001   |         |         |         |         |          |
| feed production |         |         |         |         |          |
| are official    |         |         |         |         |          |
| numbers from    |         |         |         |         |          |
| the Council of  |         |         |         |         |          |
| Agriculture     |         |         |         |         |          |
+-----------------+---------+---------+---------+---------+----------+

## Table 14. Non-Grain & Feed Reports Bibliography

  --------- ------------ -------------------------------------------------
  Report \# Date         Title

  TW4040    9/22/2004    Poultry Annual

  TW4043    10/13/2004   Bioplastics

  TW4054    12/17/2004   2005 Public Rice Tenders

  TW5001    12/29/2004   Oilseeds and Products Annual

  TW5003    02/03/2005   Livestock Semi-Annual
  --------- ------------ -------------------------------------------------