Required Report - public distribution

**Date:** 9/2/2005

**GAIN Report Number:** TW5028

TW5028

**Taiwan**

**Livestock and Products**

**Annual**

**2005**

**Approved by:**

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

American Institute in Taiwan

**Prepared by:**

Rosemary Kao

**Report Highlights:**

Taiwan's decision to reinstate a suspension of U.S. beef imports
following the June 2005 confirmation of the second BSE case in the
United States halted the swift recovery of U.S. exports. This report
assumes that Taiwan\'s beef market remains closed, and projects that
imports will fall back to fall back to 80,000 metric tons after reaching
88 tons this year. Taiwan's swine sector is undergoing a price-led
recovery and will likely show an increase in swine numbers and slaughter
through 2006. Imports are price-sensitive and are expected to decline
for the balance of 2005 and into 2006.

Includes PSD Changes: Yes

Includes Trade Matrix: No

Annual Report

Taipei \[TW1\]

\[TW\]

Table of Contents

[**Executive Summary 3**](#executive-summary)

[Beef 4](#beef)

[Consumption 4](#consumption)

[Trade 4](#trade)

[Competition 6](#competition)

[Policy 6](#policy)

[Swine 7](#swine)

[Production 8](#production)

[Prices 9](#prices)

[Trade 10](#trade-1)

[Policy 11](#policy-1)

[Internet Resources 11](#internet-resources)

# Executive Summary

Taiwan's decision to reinstate a suspension of U.S. beef imports
following the June 2005 confirmation of the second BSE case in the
United States halted the swift recovery of U.S. market share during the
six weeks Taiwan allowed the entry of U.S. beef. This brief window of
opportunity for U.S. exporters is the primary reason that Taiwan's 2005
beef import estimate was raised 10 percent. Under the assumption the
market will remain closed, Taiwan's beef imports are forecast to fall
back to the 2004 level of 80,000 metric tons.

With the release of the epidemiology report on August 30, Taiwan
authorities can begin the administrative process to remove the current
suspension and once again resume imports of U.S. beef.

Following high pig prices in 2004, Taiwan's swine sector is undergoing a
price-led recovery and, despite government intentions to stabilize or
reduce the size of the swine herd, will likely show an increase in swine
numbers and slaughter through 2006. Porcine Circovirus Infection is
having less of an impact on swine numbers than in prior years, but lower
prices in 2005 and into 2006 will likely lead to poor profitability into
next year.

Given the increase in domestic pork production and declining pork prices
in 2005, price-sensitive imports are expected to decline for the balance
of 2005 and into 2006. The lifting of the tariff-rate quota on pork
belly and pork will not necessarily lead to additional imports of these
items given the price situation and high current stocks, especially for
offal.

# 

# Beef

  ---------------- ------------ ----------------- ---------- ----------------- ----------- ----------------- --------- -------
  **PSD Table**                                                                                                        

  **Country**      **Taiwan**                                                                                          

  **Commodity**    **Meat, Beef                                                (1000 MT                                
                   and Veal**                                                  CWE)(1000                               
                                                                               HEAD)                                   

                   2004         Revised           2005       Estimate          2006        Forecast          UOM       

                   USDA         Post              USDA       Post              USDA        Post                        
                   Official     Estimate\[New\]   Official   Estimate\[New\]   Official    Estimate\[New\]             
                   \[Old\]                        \[Old\]                      \[Old\]                                 

  **Market Year                 01/2004                      01/2005                       01/2006           MM/YYYY   
  Begin**                                                                                                              

  Slaughter        0            0                 0          0                 0           0                 (1000     
  (Reference)                                                                                                HEAD)     

  Beginning Stocks 0            0                 0          0                 0           0                 (1000 MT  
                                                                                                             CWE)      

  Production       5            5                 5          5                 0           5                 (1000 MT  
                                                                                                             CWE)      

  Intra EC Imports 0            0                 0          0                 0           0                 (1000 MT  
                                                                                                             CWE)      

  Total Imports    80           80                80         88                0           80                (1000 MT  
                                                                                                             CWE)      

  TOTAL Imports    80           80                80         88                0           80                (1000 MT  
                                                                                                             CWE)      

  TOTAL SUPPLY     85           85                85         93                0           85                (1000 MT  
                                                                                                             CWE)      

  Intra EC Exports 0            0                 0          0                 0           0                 (1000 MT  
                                                                                                             CWE)      

  Total Exports    0            0                 0          0                 0           0                 (1000 MT  
                                                                                                             CWE)      

  TOTAL Exports    0            0                 0          0                 0           0                 (1000 MT  
                                                                                                             CWE)      

  Human Dom.       85           85                85         93                0           85                (1000 MT  
  Consumption                                                                                                CWE)      

  Other Use,       0            0                 0          0                 0           0                 (1000 MT  
  Losses                                                                                                     CWE)      

  TOTAL Dom.       85           85                85         93                0           85                (1000 MT  
  Consumption                                                                                                CWE)      

  Ending Stocks    0            0                 0          0                 0           0                 (1000 MT  
                                                                                                             CWE)      

  TOTAL            85           85                85         93                0           85                (1000 MT  
  DISTRIBUTION                                                                                               CWE)      

  Calendar Yr.     1            1                 0          10                0           0                 (1000 MT  
  Imp. from U.S.                                                                                             CWE)      

  Calendar Yr.     0            0                 0          0                 0           0                 (1000 MT  
  Exp. to U.S.                                                                                               CWE)      

                                                                                                                       
  ---------------- ------------ ----------------- ---------- ----------------- ----------- ----------------- --------- -------

# 

## Consumption

Taiwan's beef consumption in 2005 is estimated to grow 9%, from the 2004
BSE-affected low level, to 93,000 mt, thanks to the short-term return of
U.S. beef from April to June 2005. In June 2005, Taiwan decided to once
again suspend imports of U.S. beef due to the confirmation of a second
BSE positive case in the U.S. Heavy media coverage for several weeks
over BSE and beef has misled some consumers to shy away from beef,
regardless of its source. Consumers substituted beef largely with
chicken meat, not pork, which had negative food safety reports at about
the same time.

## Trade

The Taiwan market for U.S. beef, which had been closed since the BSE
report in December 2003, was re-opened on April 16, 2005. FSIS Forms
9285-1, 9060-5 and 2630-9 were to accompany the products with the
following certification remarks:

1\) The boneless beef was derived from cattle under the age of thirty
months slaughtered in the United States.

2\) The feeding of ruminants with meat and bone meal and greases derived
from ruminants has been banned and the ban has been effectively
enforced.

3\) Antemortem inspection is carried out on all bovines.

4\) Cattle from which the meat originate were not subjected to a
stunning process, prior to slaughter, with a device injecting compressed
air or gas into the cranial cavity or to a pithing process.

5\) The following material was excluded from products prepared for
export to Taiwan: brain, skull, eyes, trigeminal ganglia, spinal cord,
vertebral column (excluding the vertebrae of the tail, the transverse
processes of the thoracic and lumbar vertebrae, and the wings of the
sacrum), dorsal root ganglia, the tonsils and the distal ileum of the
small intestine.

The April 16, 2005 market re-access was open to only 16 customs codes
including raw, de-boned muscle meat and beef quarter carcass. It did not
include beef trimming or processed products.

On June 24, 2005, following the confirmation of the second BSE case,
Taiwan authorities re-imposed a suspension of U.S. beef imports, pending
the release of the epidemiology report by the USDA. Pipeline products
were permitted entry and U.S beef could still be sold (no need to
recall). The suspension was for administrative reasons not for food
safety concerns. Some people, who were confused by the authority's
initial market opening and the later suspension decisions, vehemently
criticized the policy. These criticisms and debates were widely covered
by the media for several weeks.

On the other hand, Taiwan consumers, who missed the flavor of US beef,
welcomed it in great earnest. Nearly 7,000 mt of U.S. beef was imported
during the permitted period (from April 16 to June 24 plus 3 to 4 weeks
of grace period for the arrival of pipeline shipments.) This equals to
roughly half of the pre-BSE U.S. beef annual imports. Imports were
mostly short ribs, rib finger and some steak cuts (ribeye and strip
loins, etc.). Traders reported that 3,000 mt out of the 7,000 mt imports
was boneless short ribs and restaurants have developed new menus for
this item. U.S. beef is currently not widely exhibited in retail stores
but is available through wholesale channels and still served in
restaurants. Local contacts believe that the stock can last till the end
of 2005.

Total 2005 imports are estimated at 65,000 mt (88,000 CWE), up 10% from
the 2004 level when there was no U.S. beef. For forecasting purposes,
this report assumes that there will be no changes in the suspension on
imports of U.S. beef and products. If U.S. beef is re-permitted entry
while it is still blocked out from other major markets, Japan, Korea,
etc., Taiwan importers will take advantage of the low prices and buy
more, regardless of the current large stocks. Total 2005 imports will
then increase by that quantity and U.S. share will go up accordingly.

The 2006 import forecast in the PSD table is also under the assumption
that there is no U.S. beef. If US beef re-enters, total 2006 imports
will hopefully resume the pre-BSE level, with the U.S. taking its
previous 21% share. Actual 2006 imports are heavily dependent on US
beef's market access into other major markets, such as Japan and Korea.
If the Japanese market is open to U.S. beef, prices will rise and supply
will become short. Taiwan may have to shift to sourcing its beef supply
more to Australia and New Zealand.

Beef imports by country in 2004 and from January to July 2005: (in
metric tons, PWE)

+--------+------+-------+-------+-------+--------+---------+---------+
|        | U.S. | Aust  | New   | P     | Nic    | Others  | Total   |
|        |      | ralia | Ze    | anama | aragua |         |         |
|        |      |       | aland |       |        |         | Imports |
+--------+------+-------+-------+-------+--------+---------+---------+
| 2004   | 645  | 2     | 2     | 791   | 366    | 0       | 58,662  |
|        |      | 7,056 | 9,804 |       |        |         |         |
+--------+------+-------+-------+-------+--------+---------+---------+
| 1-     | 6    | 1     | 1     | 772   | 401    | 1       | 43,045  |
| 7/2005 | ,964 | 5,668 | 9,239 |       |        |         |         |
+--------+------+-------+-------+-------+--------+---------+---------+

Source: Council of Agriculture

## Competition

Before BSE, Taiwan's demand for upper-end steak cuts was met mainly by
U.S. beef. As a result of the market closure to U.S. products, New
Zealand became the largest beef supplier to Taiwan in 2004 and 2005. In
2004, its market share rose to a record high 51% from the 30% level in
2003 but dropped to 45% in 2005 when U.S. beef made a short-time
come-back in April. New Zealand has virtually no grain-fed beef. Its
exports to Taiwan are mostly chilled steak cuts from young bulls for
restaurant use and bone-in short ribs. Australian beef, especially its
grain-fed beef, became too expensive for Taiwan due to competition with
buyers from other markets, such as Japan and Korea. Total beef imports
from Australia declined in 2004, although its market share rose
marginally. Australia will remain Taiwan's second largest beef supplier
in 2005, with market share being dependent on Taiwan policy over US beef
re-entry.

Imports of beef and products from Canada were banned entry on May 21,
2003 in response to the detection of BSE in Canada. Taiwan has not
agreed to lift the ban on Canadian beef like it did for US beef in April
2005 because Canada had several domestic BSE cases while the U.S. had
only one case on imported cattle then. The situation may change if and
after the suspension on US beef is lifted.

Taiwan's FTA with Panama, its only FTA partner, allows free imports (no
quantity limit, zero tariff) of beef beginning January 1, 2004. Although
Taiwan has only approved two packing plants, beef imports from Panama
have doubled in 2004 and 2005, although from a very low base. In July
2003, Nicaragua was approved to supply beef and products to Taiwan but
only 3 packing plants were qualified. Two establishments in Honduras and
certain establishments in Sweden were also qualified for supplying beef
and variety meats to Taiwan but no imports have been recorded in recent
years.

Beef offal imports were liberalized on Jan. 1, 2002 upon WTO accession.
Offal imports are not taken into account in the PS&D table. U.S. beef
offal has been banned since the December 2003 BSE report. The ban
remains in place despite the short-term market reopening for U.S. beef
in April 2005.

## Policy

In order to export meat to Taiwan, a country's meat quarantine
inspection and health certification system must be reviewed and found
acceptable by the Taiwan authorities. Taiwan currently accepts the beef
system of Australia and New Zealand and selected packing plants in
Sweden, Panama, Nicaragua and Honduras.

# Swine

  --------------- ------------ ---------- ---------- ---------- ---------- ---------- --------- --
  **PSD Table**                                                                                 

  **Country**     **Taiwan**                                                                    

  **Commodity**   **Animal                                      (1000                           
                  Numbers,                                      HEAD)                           
                  Swine**                                                                       

                  2004         Revised    2005       Estimate   2006       Forecast   UOM       

                  USDA         Post       USDA       Post       USDA       Post                 
                  Official     Estimate   Official   Estimate   Official   Estimate             
                  \[Old\]      \[New\]    \[Old\]    \[New\]    \[Old\]    \[New\]              

  **Market Year                01/2004               01/2005               01/2006    MM/YYYY   
  Begin**                                                                                       

  TOTAL Beginning 6779         6779       6819       6819       6900       7100       (1000     
  Stocks                                                                              HEAD)     

  Sow Beginning   812          812        828        828        0          830        (1000     
  Stocks                                                                              HEAD)     

  Production (Pig 10300        11895      10500      12000      0          12200      (1000     
  Crop)                                                                               HEAD)     

  Intra EC        0            0          0          0          0          0          (1000     
  Imports                                                                             HEAD)     

  Total Imports   0            0          0          0          0          0          (1000     
                                                                                      HEAD)     

  TOTAL Imports   0            0          0          0          0          0          (1000     
                                                                                      HEAD)     

  TOTAL SUPPLY    17079        18674      17319      18819      6900       19300      (1000     
                                                                                      HEAD)     

  Intra EC        0            0          0          0          0          0          (1000     
  Exports                                                                             HEAD)     

  Total Exports   0            0          0          0          0          0          (1000     
                                                                                      HEAD)     

  TOTAL Exports   0            0          0          0          0          0          (1000     
                                                                                      HEAD)     

  Sow Slaughter   0            0          0          0          0          0          (1000     
                                                                                      HEAD)     

  OTHER SLAUGHTER 9500         9410       9500       9530       0          9800       (1000     
                                                                                      HEAD)     

  Total Slaughter 9500         9410       9500       9530       0          9800       (1000     
                                                                                      HEAD)     

  Loss            760          2445       919        2189       0          2500       (1000     
                                                                                      HEAD)     

  Ending          6819         6819       6900       7100       0          7000       (1000     
  Inventories                                                                         HEAD)     

  TOTAL           17079        18674      17319      18819      0          19300      (1000     
  DISTRIBUTION                                                                        HEAD)     

  Calendar Yr.    0            0          0          0          0          0          (1000     
  Imp. from U.S.                                                                      HEAD)     

  Calendar Yr.    0            0          0          0          0          0          (1000     
  Exp. to U.S.                                                                        HEAD)     

                                                                                                
  --------------- ------------ ---------- ---------- ---------- ---------- ---------- --------- --

  --------------- ------------ ---------- ---------- ---------- ---------- ---------- ---------- --
  **PSD Table**                                                                                  

  **Country**     **Taiwan**                                                                     

  **Commodity**   **Meat,                                       (1000 MT   (1000                 
                  Swine**                                       CWE)       HEAD)                 

                  2004         Revised    2005       Estimate   2006       Forecast   UOM        

                  USDA         Post       USDA       Post       USDA       Post                  
                  Official     Estimate   Official   Estimate   Official   Estimate              
                  \[Old\]      \[New\]    \[Old\]    \[New\]    \[Old\]    \[New\]               

  **Market Year                01/2004               01/2005               01/2006    MM/YYYY    
  Begin**                                                                                        

  Slaughter       9500         9410       9500       9530       0          9800       (1000      
  (Reference)                                                                         HEAD)      

  Beginning       0            0          0          0          0          0          (1000 MT   
  Stocks                                                                              CWE)       

  Production      895          898        895        910        0          935        (1000 MT   
                                                                                      CWE)       

  Intra EC        0            0          0          0          0          0          (1000 MT   
  Imports                                                                             CWE)       

  Total Imports   61           61         68         40         0          30         (1000 MT   
                                                                                      CWE)       

  TOTAL Imports   61           61         68         40         0          30         (1000 MT   
                                                                                      CWE)       

  TOTAL SUPPLY    956          959        963        950        0          965        (1000 MT   
                                                                                      CWE)       

  Intra EC        0            0          0          0          0          0          (1000 MT   
  Exports                                                                             CWE)       

  Total Exports   0            0          0          0          0          0          (1000 MT   
                                                                                      CWE)       

  TOTAL Exports   0            0          0          0          0          0          (1000 MT   
                                                                                      CWE)       

  Human Dom.      956          959        963        950        0          965        (1000 MT   
  Consumption                                                                         CWE)       

  Other Use,      0            0          0          0          0          0          (1000 MT   
  Losses                                                                              CWE)       

  TOTAL Dom.      956          959        963        950        0          965        (1000 MT   
  Consumption                                                                         CWE)       

  Ending Stocks   0            0          0          0          0          0          (1000 MT   
                                                                                      CWE)       

  TOTAL           956          959        963        950        0          965        (1000 MT   
  DISTRIBUTION                                                                        CWE)       

  Calendar Yr.    29           29         30         16         0          12         (1000 MT   
  Imp. from U.S.                                                                      CWE)       

  Calendar Yr.    0            0          0          0          0          0          (1000 MT   
  Exp. to U.S.                                                                        CWE)       
  --------------- ------------ ---------- ---------- ---------- ---------- ---------- ---------- --

(The conversion factor used to derive pork meat to carcass weight
equivalent (CWE) is 1.43. Imports of pork bones are also included in the
PS&D Table at a conversion factor of 1.0. Imports of pork variety meats
(offal) are not included in the PSD table.)

## Production

Fat pigs slaughter in 2005 is estimated to grow 1.5 percent to 9.53
million head. Pig farmers, who made good profits in the past two years,
have tried hard to increase production. In 2005, the industry seems to
make some progress in combating the disease, Porcine Circovirus
Infection (PCV), which has high mortality in pigs weighing between 15 to
30 kg. A recent pig inventory survey conducted in May 2005 showed that,
comparing to previous surveys done in 6 months and a year ago, every
category exhibited significant increase. With larger standing pigs,
total production in the later half of 2005 is estimated to grow 5
percent from the output 6 months before, making total 2005 pig
production at roughly 9.53 million head. Larger breeding pig numbers
have also promised a larger CY2006 pig production, which is estimated at
9.8 million head.

Taiwan Hog Population Data

  --------------------- ---------------- ---------------- ----------------
                        May 2004         Nov. 2004        May 2005

  No. of farms          13,025           13,360           13,463

  Pigs on farm          6,732,991        6,818,970        7,167,559

  Boars                 36,901           35,410           35,771

  Sows/gilts            826,834          827,639          845,945

  Sows                  740,168          738,429          755,894

  Gilts                 86,666           89,210           90,051

  Fattening Pigs        5,869,256        5,955,921        6,285,843

  Piglets               1,014,746        1,023,580        1,081,772

  Under 30 kg           1,728,205        1,687,222        1,835,464

  30-60 kg              1,596,617        1,640,160        1,704,710

  Above 60 kg           1,529,688        1,604,959        1,663,897
  --------------------- ---------------- ---------------- ----------------

*Source: Council of Agriculture*

The same survey also indicated that 90 percent of pig farmers wanted to
maintain the current herd size while 7 percent planned to increase
production. Only 3 percent planned to downsize. To prevent an oversupply
of pork, Council of Agriculture has been continuously urging farmers not
to expand production.

## Prices

Very high pig prices in 2004 encouraged farmers to expand their herd
sizes. Pig prices in 2005 began to decline, following heavy media
coverage in the spring of illegal slaughtering of dead/diseased pigs.
Pig prices gradually recovered after May. Demand in the second half of
2005 will remain strong and peak around the Moon Festival (the full moon
of the eighth lunar month, September 18, 2005), but is expected to
decline afterwards. With larger pig population, CY2006 pig prices may
continue to drop to the level below NT\$4,800/100kg, roughly the
break-even point for pig production.

2004 Pig Production Cost Analysis (NT\$ per head of 115 kg)

  ----------- ----------- ----------- ----------- ----------- -------------
  Feeders     Feed        Other Costs Total Cost  Growth      Loss/Profit
                                                  Income      

  1,217       3,367       812         5,396       6,727       1,331
  ----------- ----------- ----------- ----------- ----------- -------------

*Source: Council of Agriculture*

Taiwan Pig Auction Prices (NT\$/100 kg)

+-------+-------+-------+------+------+------+------+------+------+
| C     | C     | Jan.  | Feb. | Mar. | Apr. | May  | Jun. | Jul. |
| Y2003 | Y2004 |       |      | 2005 | 2005 |      |      |      |
|       |       | 2005  | 2005 |      |      | 2005 | 2005 | 2005 |
+-------+-------+-------+------+------+------+------+------+------+
| 5,298 | 5,912 | 5,931 | 5    | 5    | 4    | 5    | 5    | 5    |
|       |       |       | ,701 | ,272 | ,913 | ,182 | ,355 | ,588 |
+-------+-------+-------+------+------+------+------+------+------+

*Source: Council of Agriculture*

Exchange rate: approximately NT\$34.5=US\$1 in 2003, NT\$33.49=US\$1 in
2004 and roughly NT\$31.5=US\$1 in the first half of 2005.

## Trade

The vast majority of pork meat consumed in Taiwan is produced
domestically, with imports being used mainly for processing or to
supplement occasional shortfalls.

In first half year of 2005, Taiwan pig prices declined from the 2004
high levels and imports slowed accordingly. Till the end of 2005 and
continuing into 2006, Taiwan pig prices are expected to decline further,
with a larger domestic pig supply.

Pork imports are very price sensitive. CY2005 pork imports are expected
at 28,000 mt 40,000 CWE), down 34% from the 2004 level, due to larger
domestic supply and decreased demand, caused by negative reports of
illegal slaughtering of sick and diseased pork. With even larger
domestic supply, CY2006 pork imports are forecast to decline further to
30,000 mt CWE.

Taiwan Pork Meat Imports by Country (mt, PWE)

+-------+-----+------+-------+-------+------+------+---------+------+
|       | U   | Ca   | Aust  | De    | Sw   | Hun  | Neth    | T    |
|       | .S. | nada | ralia | nmark | eden | gary | erlands | otal |
|       |     |      |       |       |      |      |         |      |
|       |     |      |       |       |      |      |         | Imp  |
|       |     |      |       |       |      |      |         | orts |
+-------+-----+------+-------+-------+------+------+---------+------+
| 2004  | 19, | 18   | 154   | 728   | 483  | 548  | 72      | 39   |
|       | 787 | ,209 |       |       |      |      |         | ,981 |
+-------+-----+------+-------+-------+------+------+---------+------+
| 1-7   | 6,  | 6    | 106   | 875   | 25   | 277  | 157     | 14   |
| /2005 | 175 | ,955 |       |       |      |      |         | ,570 |
+-------+-----+------+-------+-------+------+------+---------+------+

Source: Council of Agriculture

Canada replaced the U.S. as the leading pork meat supplier in 2005
because of its cheaper prices. In terms of import value, the U.S. is
still narrowly ahead of Canada.

U.S. Spare rib tips has become the most popular item. U.S. pork picnics,
for processing purpose, is still well-accepted in Taiwan. Pork trimming
supplied by Canada seems to be more competitive, in quality and
specification, than U.S. products.

Pork bone imports totaled only 624 mt from January through July 2005.
They were 354 mt from Canada; 186 mt from US; 77 mt from Hungary and 7
mt from Australia.

Under Taiwan's WTO commitments, Special Safeguards (SSG) came into play
following Tariff Rate Quota (TRQ) liberalization on January 1, 2005.

CY2004 TRQs and imports, 2005 SSG trigger volume for pork belly and pork
offal, are as follows: (mt)

  -------------- -------------- -------------- -------------- ------------
                 2004 TRQ       2004 Imports   2005 SSG       1-8/2005
                                               Volume Trigger Arrivals

  Pork Belly     15,400         13,331         10,066         5,958

  Pork Offal     27,500         25,359         15,177         13,236
  -------------- -------------- -------------- -------------- ------------

*Source: Directorate General of Customs, Ministry of Finance*

SSG volume trigger for pork belly in 2005 is 10,066 mt, price trigger is
NT\$30/kg. Imports totaled 5,958 mt as of August 26, 2005. SSG volume
trigger for pork offal in 2005 is 15,177 mt and there is no price
trigger. If SSG is triggered, the tariff rate will increase by 33.3
percent, making duty for belly to grow from 12.5% to 16.67%, and that
for offal to grow from 15% to 20%. If demand is strong and imports are
profitable, importers are willing to pay the extra duty, which applies
to all importers. However, pork belly imports in 2005 may not reach the
10,066 threshold and SSG may not be triggered. The offal SSG will likely
be triggered in 2005 but total imports are expected at only 19,000 mt,
much less than the 2004 import level of 25,359 mt. Local traders
reported high stocks for imported pig offal. Imports of both pork belly
and pork offal in 2005 will be smaller than the 2004 level.

In 2005, the U.S. remains the leading supplier of pork offal, mainly
hocks, rectum, stomach, and cheek meat. However, its market share is
gradually being undermined by European products, such as pork hocks from
the Netherlands and rectum from Denmark.

## Policy

Although Taiwan has been FMD-free since 2001 and was declared FMD-free
with vaccination in May 2003 by the World Animal Health Organization
(OIE), exports are not likely to recover to pre-FMD levels. Taiwan's FMD
vaccination rate in pig herd reached 89% in 2004. The animal health
authority's plan to do without the FMD vaccination on a couple of
offshore islets beginning July 1, 2005 was postponed to August 1 and
later suspended indefinitely. The initial plan to completely stop
vaccination in 2006 and get OIE recognition of FMD free without
vaccination in 2007 is now being re-evaluated. In the long term, the
very efficient Taiwan swine industry will continue to produce pork for
the local market, with imports mainly used for processing or to
supplement occasional shortfalls.

In order to export meat to Taiwan, a country's meat quarantine
inspection and health certification system must be reviewed and found
acceptable by the Taiwan authorities. Taiwan currently accepts the pork
system of the United States, Canada, Australia, New Zealand, Denmark,
and Sweden and selected packing plants in Japan, Hungary and Finland.

# Internet Resources 

Most Taiwan (.tw) domain websites are only in Chinese, but the amount of
English content is increasing.

[http://www.coa.gov.tw/english/index.htm]{.underline} for agricultural
statistics and general agricultural information (in English).

[http://www.baphiq.gov.tw]{.underline} for Taiwan quarantine
requirements (English version available).

[http://www.trade.gov.tw/english.index.htm]{.underline} for trade
statistics, trade rules, TRQ bidding rules and general trade information
(English version available).

[http://www.wto.org]{.underline} The WTO's website for information about
Taiwan's WTO accession.

[http://www.doca.mof.gov.tw]{.underline} for tariff reduction schedule
(English version available) and TRQ implementation measures.

[http://210.69.119.40/seadb]{.underline} for Special Safeguards
application (Chinese only).

[http://www.naif.org.tw]{.underline} for pig auction prices and pork
retail prices (Chinese only).