Required Report - public distribution

**Date:** 2006/12/28

**GAIN Report Number:** TW7001

TW7001

**Taiwan**

**Oilseeds and Products**

**Annual Report 2007**

**2007**

**Approved by:**

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

AgTaipei

**Prepared by:**

Chiou Mey Perng

**Report Highlights:**

Taiwan's soybean imports are forecast at 2.2 to 2.3 million metric tons
for the next two years. Taiwan's poultry production is expected to
remain at current levels. Taiwan consumes approximately 1.7 million
metric tons soybean meal for animal feed annually. Locally crushed
soybean meal accounts for about 95 percent of the total. Locally crushed
meal faces market challenges from imported soybean meal and DDGS as a
substitute for soybean meal. Taiwan's demand for soybean oil from
locally crushed beans remains strong, and soybean oil captured a 65
percent share, up by 4 percent, of Taiwan's total vegetable oil
consumption in 2006. However, Taiwan's palm oil consumption is expected
to increase due to trans-fat concerns in the HRI sector and for
biodiesel processing.

Includes PSD Changes: Yes

Includes Trade Matrix: Yes

Annual Report

Taipei \[TW1\]

\[TW\]

**Table of Contents**

[Executive Summary 3](#executive-summary)

[Oilseed Situation and Outlook 3](#oilseed-situation-and-outlook)

[1-1. General 3](#general)

[1-2. Stocks and Containerized Shipments
4](#stocks-and-containerized-shipments)

[1-3. Market Share: U.S. market share is expected to 70-75 percent
4](#market-share-u.s.-market-share-is-expected-to-70-75-percent)

[1-4. PRC Trade 4](#prc-trade)

[1-5. Taiwan's Soybean Import Demand 4](#taiwans-soybean-import-demand)

[1-6. Meat Imports vs. Special Safe Guard (SSG)
6](#meat-imports-vs.-special-safe-guard-ssg)

[Oilmeal Situation and Outlook 6](#oilmeal-situation-and-outlook)

[2-1. General 6](#general-1)

[2-2. Consumption & Trade 7](#consumption-trade)

[2-3. Soybean Meal Inclusion Remains High but with a Minor Decrease due
to Introduction of DDGS
7](#soybean-meal-inclusion-remains-high-but-with-a-minor-decrease-due-to-introduction-of-ddgs)

[2-4. Kitchen Scraps as Renewable Hog Feed
8](#kitchen-scraps-as-renewable-hog-feed)

[Oil Situation and Outlook 8](#oil-situation-and-outlook)

[3-1. General 8](#general-2)

[3-2. Competition between Oils in 2005/06 (percent change compared to
2004/05)
8](#competition-between-oils-in-200506-percent-change-compared-to-200405)

[3-3. Concerns over Trans Fat 9](#concerns-over-trans-fat)

[3-4. Biodiesel 9](#biodiesel)

[Tables 10](#tables)

[Table 1: Soybean PSD 10](#table-1-soybean-psd)

[Table 2: Soybean Meal PSD 11](#table-2-soybean-meal-psd)

[Table 3: Soybean Oil PSD 12](#table-3-soybean-oil-psd)

[Table 4: Soybean Imports 13](#table-4-soybean-imports)

[Table 5: Soybean Meal Imports 14](#table-5-soybean-meal-imports)

[Table 6: Soybean Oil Imports 15](#table-6-soybean-oil-imports)

[Table 7: Soybean Meal Prices 16](#table-7-soybean-meal-prices)

[Table 8: SSG Triggers for imports in 2007
17](#table-8-ssg-triggers-for-imports-in-2007)

[Table 9: Pork Imports vs. Domestic Production and Wholesale Market in
Calendar Year.
17](#table-9-pork-imports-vs.-domestic-production-and-wholesale-market-in-calendar-year.)

[Table 10: Total Poultry Meat Imports vs. Domestic Production in
Calendar Year.
18](#table-10-total-poultry-meat-imports-vs.-domestic-production-in-calendar-year.)

[Table 11: Tariff Rates for Edible Oils and Oil Seeds in Calendar Year
19](#table-11-tariff-rates-for-edible-oils-and-oil-seeds-in-calendar-year)

[Table 12: Oil Prices, CIF Taiwan, USD/Kg
20](#table-12-oil-prices-cif-taiwan-usdkg)

[Table 13: Oil Imports & Production, 1,000 MT
20](#table-13-oil-imports-production-1000-mt)

[References 21](#references)

# Executive Summary

Taiwan's demand for soybean imports is estimated at 2.25 million metric
tons for the coming two years. This is a ten percent decrease from
MY2005/06. The projected decrease in soybean imports is attributed to an
estimated 2 percent decrease in hog production and higher than usual
soybean carry over stocks from MY2005/06. Taiwan advanced its soybean
purchases when world soybean prices were rising in late MY2005/06. U.S.
soybeans are likely to hold a 75 percent market share mainly due to
improvement in 2006 U.S. soybean crop oil and protein content and
partially due to increased use of backhaul containers for shipping.
Containerized shipping provides new opportunities for U.S. producers and
Taiwan importers.

Taiwan's swine sector is expected to remain stable and competitive with
imported pork products. This is demonstrated in consistent levels of
pork meat imports under HS0203 in previous years. An anticipated 2
percent downward adjustment in 2007 hog production is simply a
consequence of an over supply in 2006. The local poultry sector,
however, has been significantly affected by continued growth in poultry
meat imports. U.S. poultry meat exports to Taiwan registered increases
of 30 percent to 200 percent during the 2002-2005 period. Taiwan's
Council of Agriculture reached consensus with the local poultry industry
to strengthen competitiveness with imports by maintaining production at
the current level. In recent years, production was adjusted downward to
accommodate increased imports. Under the scenario that Taiwan's poultry
production is able to remain at the current level, with no further
declines, Taiwan's demand for soybean imports in the near future will
remain at 2.2 to 2.3 million metric tons.

In MY2005/06, Taiwan consumed approximately 1.7 million metric tons of
soybean meal to manufacture 7.58 million metric tons of animal feed.
Locally crushed soybean meal accounted for about 95 percent of the
total. The feed inclusion rate of soybean meal was estimated to decrease
one percent from a year earlier due to a significant increase in
distiller's dried grain soluble (DDGS) imports. Taiwan imported 100
thousand metric tons of DDGS in 2005/06, compared to 40 thousand metric
tons a year earlier. Locally crushed meal faces market challenges from
imported soybean meal and DDGS as a substitute for soybean meal. Any
decrease in locally crushed soybean meal will translate into decreased
demand for soybean imports.

Taiwan's total vegetable oil consumption in 2006 remained at the same
level as the previous year. Soybean oil captured an additional 4 percent
share to reach 65 percent due to an increase in locally crushed soybean
oil supply and a decrease in new-to-market oil imports. In the near
future, palm oil consumption is anticipated to increase. Palm oil will
likely be used as a substitute for soybean oil in the HRI sector use due
to trans-fat concerns over hydrogenated soybean oil. It is anticipated
that Taiwan will have new demand for palm oil for biodiesel processing
in the near future. Currently, there is a new biodiesel facility under
construction.

# Oilseed Situation and Outlook

## 1-1. General

Soybean imports are forecast to 2.20 million metric tons for 2006/07 and
2.25 million metric tons for 2007/08. A lower import forecast for
2006/07 is due a higher than normal carry over stocks from 2005/06.

## 1-2. Stocks and Containerized Shipments 

Ending stocks in 2004/05 were very low due to new opportunities from
containerized grain shipments to Taiwan. In 2005, there were 0.5 million
metric tons of corn and soybean containerized shipments destined for
Taiwan, and approximately 1.5 million metric tons in 2006. Containerized
grain shipments in 2005 were arranged in good order and were highly
praised by Taiwan importers for better quality grain and flexibility in
shipping arrangements. This helped save capital investments by holding
stock only at a level needed to secure import supply. In 2006, the rapid
increase in containerized grain shipments brought new problems of
delayed phyto certificates and shipments. Delays of phyto certificates
led to many grain containers arriving at Taiwan ports of entry that
couldn't clear Taiwan Customs. Rising world soybean price and delays in
containerized shipments led to an increase in soybean imports via vessel
shipments. As a result, 2005/06 end year stocks built up to 1.6 months
of consumption from last year's 0.75 months. Containerized grain
shipments in coming years are anticipated to adjust to a level between
2005's 0.5 million metric tons and 2006's 1.5 million metric tons.

## 1-3. Market Share: U.S. market share is expected to 70-75 percent

The United States had a 75 percent share of total 2005/06 imports, a 3
percentage-point increase from 2004/05, which was an 11 percentage-point
increase from the prior year. In recent years, U.S. soybeans have been
facing strong competition from South American soybeans. Price
competition may stimulate additional interest in South American beans,
or in less expensive soybean meal from India or the U.S. to substitute
for locally crushed meal from imported soybeans. Despite these changes,
the United States is expected to retain its leading position in the
Taiwan soybean market because of increasing U.S. attention to quality,
the year-round availability of U.S. soybeans, the reliability of U.S.
supplies, and the new shipment method via backhaul containers. In
addition, local crushers said, U.S. soybean quality in MY 2005/06 crop
was improved in terms of higher oil and protein content.

## 1-4. PRC Trade 

Taiwan still bans imports of PRC feed grains and soybean meal, but
Taiwan hog farmers remain interested in alternative import supply from
China in order to depress the local feed grain and soybean meal market
prices whenever those prices are volatile. In September 2006, Taiwan hog
farmers petitioned COA and succeeded in gaining permits to import feed
corn from China during the period from November 28, 2006 to February 28,
2007. Although, soybean meal is not listed in the petition, Taiwan has
allowed industrial associations of soybean food processors to import a
small quantity of PRC soybeans for use in food processing on a special
import permit basis. Taiwan imported 40 mt and 42 mt of soybeans from
Mainland China in 2003 and 2004, respectively. Although no PRC soybean
meal has been imported, Taiwan temporarily lifted the import ban on PRC
soybean meal from November 18, 2003 to January 31, 2004. Over the next
few years, these restrictions on soybeans and meal and/or other PRC
agricultural products may be gradually relaxed.

##  

## 1-5. Taiwan's Soybean Import Demand

Taiwan imports almost all of its soybeans, and its demand for soybeans
is divided between food use, which is relatively constant, and crushing,
which is getting more variable after Taiwan liberalized its meat import
market in January 2005. Nevertheless, Taiwan still made the top four
foreign market for U. S. soybean exports in 2005/06 and its locally
crushed meal from imported soybeans still accounts for 95 percent of
total soybean meal consumption.

### 1-5.1. Food Soybeans vs. Biotech Regulations

Although about 87 percent of soybeans are used for animal feed, Taiwan
has a strong market for food use soybeans that is estimated at about 260
thousand metric tons. This represents a 5 thousand metric ton increase
of IP beans to meet a new demand for fermenting "natto", healthy
Japanese style fermented soybeans, and its further processed product,
natto kainase. In addition to newly introduced natto products, most food
use soybeans are consumed as tofu and soymilk, and the estimate is based
on sales by crushers of sorted US#2 beans. Approximately 25 thousand
metric tons of food beans were identity-preserved (IP), non-GM "food
grade", and/or organic beans. Of this total, the US supplied about 16
thousand metric tons (a 33% increase over last year), Canada 6 thousand
metric tons (a 50% increase), Australia 2 thousand metric tons
(constant), and all other countries combined supplied the remaining one
thousand metric tons (constant).

The market for non-biotech food grade soybeans grew at about 25 percent
in 2005/06, due to a new use in natto and natto kitase manufacturing. It
has been driven by adoption of mandatory bio-engineered food labeling
requirements that came into effect on January 1^st^ 2004 for some
products and on January 1^st^ 2005 for more processed products made of
soybean and corn. Taiwan's draft biotechnology act requires that all GM
products, in addition to current regulated corn and soybeans and
products, be labeled. However, the draft act is still pending further
interagency discussions. This draft act is unlikely to be finalized in
the coming year.

It is anticipated that local demand for Non-GM, or IP beans will
continue to increase. Reportedly, some major #2 bean distributors will
occasionally enter the non-GM bean market in 2007. Taiwan's demand for
IP beans for 2006/07 is anticipated to increase to 30 thousand metric
tons - according to local tofu, soymilk and natto manufacturers.

### 1-5.2. Soybeans for Crushing vs. Situation and Outlook of Taiwan Livestock Sectors

The demand for soybeans for crushing is forecast to remain at about 2
million metric tons in 2006/07 and 2007/08, in line with local livestock
production adjustments. Trade sources said that consumption of chicken
drumsticks is increasing due to increasing import supply, which has
depressed consumption demand for pork chops in the HRI sector. An
increase in 2006 import of poultry meat products has not only depressed
the local pork market, it also led to a 3 percent decline in poultry
production.

However, the local swine sector has demonstrated it can compete with
imported pork products, as imports have not increased in the past year
(see table 9). Local hog production accounts for about 15 percent of
Taiwan's total agricultural output and has been an important and
profitable agricultural sector on Taiwan. The Council of Agriculture
(COA) conducts hogs consensus survey twice a year, in May and November,
respectively, to monitor the domestic pork market situation. According
to survey results from November 2005 and May 2006 and auction market
data, total hog production in CY2006 is predicted at 9.65 million heads,
a 2 percent increase from a year earlier. Hog production increased along
with an increase in the consumption of poultry meat as a substitute for
pork meat, which led to declining domestic hog auction prices. Domestic
per 100 kilogram-head hog auction prices started off at NT\$5,246 in
January then continued to decline to the current price level at
NT\$4,670, reaching the COA set break-event point of NT\$4,500. Hog
farmers started complaining to COA since last September about poor
margins due to the declining hog market price and increasing feed cost
driven by high world feed grains prices. According to hog farmers, the
break-even point should be adjusted upward to NT\$4,800. They believe
domestic hog auction prices should fall in the range of NT\$5,000 and
NT\$5,500. The decreasing local hog market price will depress imports of
pork meat in early 2007 and adjust local hog production to a more
comfortable level in 2005.

# 

Despite the pessimistic atmosphere around Taiwan's livestock sector, COA
announced its 2007 target poultry production to remain at the level of
2006, with no further adjustment downward to accommodate any potential
increase of imports. Taiwan's poultry production strategic plan has
changed to compete with imports by maintaining the current domestic
production scale. However, industry views that both swine and poultry
sectors will face further downward adjustments from COA target
production levels to 9.5 million heads of hog and 368 million birds (see
Table 9 & 10).

###  

## 1-6. Meat Imports vs. Special Safe Guard (SSG)

### 

Imported poultry meat is expected to be limited to HRI use. Imports of
poultry meat are forecast to remain at 120 thousand metric tons, based
on an estimated production level at 368 million birds, following
consecutive steady import increases. U.S. poultry meat imports were
valued at \$24 million in 2001 and increased to \$83 million in 2005.
However, concerns over bird flu directed Taiwan authorities set a policy
prohibiting killing and marketing birds at traditional wet markets. The
prohibition on killing and marketing birds at wet markets is anticipated
to take effect in April 2007. The COA production target of poultry for
2007 is likely to be adjusted downward further from the target
production when the prohibition on wet markets begins in April 2007.
This will also likely change local poultry consumption pattern to
increase acceptance of imported high quality chilled poultry meat.

SSG triggers for poultry imports in 2007 are adjusted to higher import
levels according to Table 8. However, trade sources said imports of
poultry and pork meat products are not related to SSG triggers. The
competitiveness of locally produced poultry and pork meat products are
the key element. This means Taiwan needs a competitive feed industry,
efficient livestock production technology and strong marketing tools and
strategies to support local livestock sectors.

On the marketing side, in addition to promoting the freshness of locally
produced meats, the local poultry and swine sectors are trying to
increase their competitiveness with imported meat and poultry products
by introducing a traceability system. Consumers can use an
identification code to trace production information about the packaged
poultry or meat products, such as who was the producer, where the animal
was raised and processed, date of processing and the sanitary quality of
the meat product, and what kind of feed was used etc. The traceability
system is now applied to value added production.

# Oilmeal Situation and Outlook

## 2-1. General

On Taiwan, locally crushed meal from imported soybeans accounted for 95
percent of total soybean meal consumption in the last two years, with a
3 percent decrease from the historical baseline. Crushers and feed
millers, aiming to reduce feed cost, had imported larger than normal
quantities of soybean meal from the United States and India over the
last two years. They import soybean meal when locally crushed meal
market prices are higher than world soybean meal prices and they
increase usage of full fat soybean meal in their feed manufacturing when
the global soybean price is comparatively lower than locally crushed
soybean meal, and vice versa. It is anticipated that the market space
for imported soybean meal as a substitute for locally crushed meal is
likely to expand. In addition to imported soybean meal, locally crushed
soybean meal is facing a market challenge from increasing imports of
distiller's dried grain soluble (DDGS).

## 2-2. Consumption & Trade

## 

Total feed demand is estimated at 7.58 million metric tons in 2005/06,
and is forecast at 7.4 million metric tons in 2006/07 and 2007/08. These
estimates are consistent with a 2 percent increase in hog production and
a 3 percent reduction in poultry production in 2005/06, and forecast
that hog production in 2006/07 and 2007/08 will fall back to the level
of 2005. Forecast 2006/07 and 2007/08 poultry production remain at the
level of 2005/06.

(Note: Feed demand is estimated based on a feed efficiency factor of 3.2
for hog and 1.7 for poultry, and a constant feed demand for other minor
sectors in cattle and dairy and fishery combined.)

Taiwan's demand for feed in terms of soybean meal is forecast at 1.68
million metric tons in 2006/07 and 2007/08. Feed millers and livestock
farmers source soybean meal from the lowest cost local supplies and they
import when imported prices are competatitive with locally crushed meal.
In the previous two years, Taiwan imported approximately 60 thousand
metric tons of high protein meal from the United States and 30 thousand
metric tons of normal soybean meal from India. It is anticipated that
Taiwan will continue to import about 90 thousand metric tons of soybean
meal when world soybean meal prices are competitive with locally crushed
meal. Soybean meal imports in recent years represent approximately 5
percent of total consumption and has potential to increase in the
future.

Full fat meal and dehulled high protein meal with CP 47.5% or above
remained popular, with a premium of NT\$0.7/kg over conventional soy
meal with CP at 42.5%. The production of full fat soybeans is estimated
at 300 thousand metric tons, unchanged from a year earlier, and dehulled
soy meal is estimated to remain at 200 thousand metric tons because of
imported high protein meal from the United States were at about the same
in last two years.

(Note: Full fat soy soybeans are included as beans for crushing. Oil
extraction rate is adjusted lower accordingly.)

## 2-3. Soybean Meal Inclusion Remains High but with a Minor Decrease due to Introduction of DDGS

The feed inclusion rate of soybean meal is estimated to decrease to 22.7
percent from a previous 24 percent of feed production in 2004/05. The
feed inclusion rate of soybean meal is adjusted downward due to increase
in distiller's dried grain soluble (DDGS) import supply, which
substitutes for soybean meal and full fat soybean meal. In 2005/06 total
DDGS imports are estimated at 100 thousand metric tons, of which only 17
thousand metric tons were imported under HS2303.30 on 3 percent tariff
rate and the other 83 thousand metric tons were imported under HS2306.70
and HS2302.10 at a zero percent tariff rate. Taiwan Feed Industry
Association has petitioned Taiwan authorities for zero tariffs on DDGS
under HS2303.30, and it is expected that Taiwan authorities will grant
zero tariff rate on DDGS imports soon to benefit local livestock sectors
by increasing their competitiveness with pork and poultry meat imports.

In 2005/06, the use of other oil meals under HS2306 (note: DDGS imports
under HS2306 were excluded) and HS2305 remains low and is estimated at
2.86 percent. This is a 0.06 percent decrease from a year earlier due to
an estimated 60 thousand metric ton increase of DDGS over last year. The
feed inclusion rate of fishmeal under HS2301.20 is estimated at 2.82
percent, a 0.34 percent decrease from a year earlier. A decrease of
fishmeal imports or consumption indicates a possible decrease in fishery
feed production in MY2005/06 due in part to chemical scandals in fishery
products in 2006. Local feed mills have also started to introduce
fermented full fat meal as a substitute for dairy products in feed
rations. There are no import statistics for milk powder under
HS0402.2910 and whey under HS0404.1010 for feed use.

## 

## 2-4. Kitchen Scraps as Renewable Hog Feed

An official survey on the hog inventory conducted in May 2005 revealed
that 10 percent of Taiwan's 7.2 million head hog population is fed
kitchen scraps. One year of observation found that kitchen scraps used
as hog feed has existed for a long time on Taiwan. It is considered no
immediate market threat to U.S. feed grain exports to Taiwan because
Taiwan Animal Health and Inspection authority does not encourage further
expansion of kitchen scraps to feed swine and Taiwan's environmental
agency has agreed to not to promote kitchen scraps as a hog feed, due to
concerns over animal health and safe pork meat supply.

## 

# Oil Situation and Outlook

## 3-1. General

Vegetable oil consumption in 2005/06 in Taiwan is estimated at 570
thousand metric tons, about the same level as the previous year (see
Table 13). Soybean oil's market share increased 4 percentage points to
fill the market gap created by decreased imports of new-to-market oils,
while palm oil's share remained at about the same level due to
relatively same market prices, compared to a year earlier (see Table
12). However, Taiwan's palm oil consumption is anticipated to increase
due to growing trans fat concerns over hydrogenated soybean oil in the
HRI sector use and a new use in biodiesel processing. Of the total
soybean oil supply, imported soy oil decreased to 10 thousand tons due
mainly to increased locally crushed supply taking away import
opportunities. Total vegetable oil consumption for the coming two years
is forecast to remain at the current level. It is anticipated that
Taiwan maintains its relatively high level of oils and fats consumption
of 25.11 kg per capita in the coming years. However, it has a potential
cut back in a long run because a local diet survey conducted in 2004
revealed its Protein:Fat:Carbohydrate (PFC) ratio was 13:39:48, compared
with the recommendation of 12:25:63.

## 3-2. Competition between Oils in 2005/06 (percent change compared to 2004/05)

There are three segments in the Taiwan vegetable oil market:

1)  Market leaders: these are soybean oil and palm oil, with market
    shares of 65% (up 4%) and 25% (no change) respectively in 2005/06.

2)  New-to-market oils: olive, canola, corn, sunflower, and safflower
    oils with a combined 7% share (down 4 %).

3)  Traditional Chinese oils: peanut and sesame oil with a combined 3%
    share (no change).

Despite post-WTO tariff reductions for new-to-market oils (see Table
11), soybean oil and palm oil are expected to retain their market
leading positions because of their widespread use in the HRI and food
processing sectors and because of their competitive prices to
new-to-market oils.

The relatively high prices of new-to-market oils have prevented them a
gaining market share. In 2005/06, imports of new-to-market oils dropped
by 4% due partially to conservative consumption attitude by general
consumers who were affected by negative press reports about political
and economic conditions. It is hoped that recent rising stock prices in
the Taiwan exchanges and a better-than-anticipated economic performance,
with an above 4 percent economic growth estimate for the coming year,
will foster a more optimistic consumption attitude.

The tariff rates on soybean oil, sunflower oil, safflower oil, and corn
oil are fixed at 5 percent, however the tariff rates on olive and canola
oil will be reduced gradually to 0 and 4 percent, respectively, by 2007.
This is unlikely to increase market competition for olive oil and canola
oil. This is because it a small size of the tariff reduction. In
addition, olive oil is not well suited to Chinese cuisine and canola oil
is under increasing scrutiny since it is derived from biotech crops.
However, the increasingly health conscious Taiwan consumer may demand
increasing quantities of NuSun oil, which is non-GM and has lower
saturated fats, if their is sufficient supply for export markets.

## 3-3. Concerns over Trans Fat 

Due to gradually increasing concern over trans fats, Taiwan may develop
new demand for new soybean varieties characterized low linoleic acid
soybeans to reduce trans fat content in soybean oil refining. The local
press has picked up trans fat stories since 2005, and Taiwan's Bureau of
Food Safety is currently working with academia and industry to establish
standards for trans fat inspection methodology and labeling for fat and
oils and food products. In mid 2006, Taiwan Sugar Company launched the
first "No Trans Fat" labeled soybean oil. Reportedly, Kentucky Fried
Chicken Chains on Taiwan announced it will gradually switch its oil to
palm oil from hydrogenated soy oil beginning the end of 2006. The food
industry's reaction to trans fat issue provides market potential for an
expansion of palm oil imports to Taiwan.

## 3-4. Biodiesel

Taiwan has three small-scale batch type biodiesel facilities with a
combined production capacity of 13 billion liter. The plants are running
at about 10 percent capacity using recycled cooking oil and a small
amount of feedstocks from government subsidized soybeans, rapeseeds and
sunflower seeds produced on fallow rice land. Reportedly, there is a new
continuous type facility under construction. This new facility is going
to create a new use of palm oil in Taiwan's biodiesel processing.

At the present time, imports of biofuels are not subject to import
regulations on petroleum products, but manufacturers and sellers of
biofuels are subject to the same rules as that of petroleum products.
Reportedly, the Taiwan Environmental Protection Administration is
drafting Taiwan standards for biofuels. This movement further endorses a
for-go signal in Taiwan biofuel policy.

# Tables

## Table 1: Soybean PSD

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

  **Country**     **Taiwan**                                                                                              

  **Commodity**   **Oilseed,                                                            (1000                             
                  Soybean**                                                             HA)(1000                          
                                                                                        MT)                               

                  2005         Revised                2006       Estimate               2007       Forecast               UOM

                  USDA\        Post\      Post\       USDA\      Post\      Post\       USDA\      Post\      Post\       
                  Official     Estimate   Estimate\   Official   Estimate   Estimate\   Official   Estimate   Estimate\   
                                          New                               New                               New         

  **Market Year                10/2005    10/2005                10/2006    10/2006                10/2007    10/2007     MM/YYYY
  Begin**                                                                                                                 

  Area Planted    0            0          0           0          0          0           0          0          0           (1000 HA)

  Area Harvested  0            0          0           0          0          0           0          0          0           (1000 HA)

  Beginning       71           146        71          130        141        269         145        0          209         (1000 MT)
  Stocks                                                                                                                  

  Production      0            0          0           0          0          0           0          0          0           (1000 MT)

  MY Imports      2400         2210       2498        2400       0          2200        0          0          2250        (1000 MT)

  MY Imp. from    0            1540       1867        0          0          1650        0          0          1685        (1000 MT)
  U.S.                                                                                                                    

  MY Imp. from EU 0            0          0           0          0          0           0          0          0           (1000 MT)

  Total Supply    2471         2356       2569        2530       141        2469        145        0          2459        (1000 MT)

  MY Exports      0            0          0           0          0          0           0          0          0           (1000 MT)

  MY Exp. to EU   0            0          0           0          0          0           0          0          0           (1000 MT)

  Crush           2081         1960       2040        2120       0          2000        0          0          2000        (1000 MT)

  Food Use Dom.   260          255        260         265        0          260         0          0          265         (1000 MT)
  Cons.                                                                                                                   

  Feed Waste Dom. 0            0          0           0          0          0           0          0          0           (1000 MT)
  Cons.                                                                                                                   

  Total Dom.      2341         2215       2300        2385       0          2260        0          0          2265        (1000 MT)
  Cons.                                                                                                                   

  Ending Stocks   130          141        269         145        0          209         0          0          194         (1000 MT)

  Total           2471         2356       2569        2530       0          2469        0          0          2459        (1000 MT)
  Distribution                                                                                                            

  CY Imports      2446         2210       2446        0          0          2300        0          0          2200        (1000 MT)

  CY Imp. from    1769         1540       1769        0          0          1750        0          0          1700        (1000 MT)
  U.S.                                                                                                                    

  CY Exports      0            0          0           0          0          0           0          0          0           (1000 MT)

  CY Exp. to U.S. 0            0          0           0          0          0           0          0          0           (1000 MT)

                                                                 TS=TD                                                    

                                                                 -141                                                     
  --------------- ------------ ---------- ----------- ---------- ---------- ----------- ---------- ---------- ----------- ---------

## Table 2: Soybean Meal PSD

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

  **Country**     **Taiwan**                                                                                                  

  **Commodity**   **Meal,                                                               (1000                                 
                  Soybean**                                                             MT)(PERCENT)                          

                  2005         Revised                2006       Estimate               2007           Forecast               UOM

                  USDA\        Post\      Post\       USDA\      Post\      Post\       USDA\          Post\      Post\       
                  Official     Estimate   Estimate\   Official   Estimate   Estimate\   Official       Estimate   Estimate\   
                                          New                               New                                   New         

  **Market Year                10/2005    10/2005                10/2006    10/2006                    10/2007    10/2007     MM/YYYY
  Begin**                                                                                                                     

  Crush           2081         1960       2040        2120       0          2000        0              0          2000        (1000 MT)

  Extr. Rate,     0.788083     0.816327   0.79902     0.787736   0          0.795       0              0          0.795       (PERCENT)
  999.9999                                                                                                                    

  Beginning       29           123        29          50         123        29          60             0          29          (1000 MT)
  Stocks                                                                                                                      

  Production      1640         1600       1630        1670       0          1590        0              0          1590        (1000 MT)

  MY Imports      90           10         90          80         0          90          0              0          90          (1000 MT)

  MY Imp. from    0            0          57          0          0          60          0              0          60          (1000 MT)
  U.S.                                                                                                                        

  MY Imp. from EU 0            0          0           0          0          0           0              0          0           (1000 MT)

  Total Supply    1759         1733       1749        1800       123        1709        60             0          1709        (1000 MT)

  MY Exports      10           0          0           10         0          0           0              0          0           (1000 MT)

  MY Exp. to EU   0            0          0           0          0          0           0              0          0           (1000 MT)

  Industrial Dom. 0            0          0           0          0          0           0              0          0           (1000 MT)
  Cons.                                                                                                                       

  Food Use Dom.   0            0          0           0          0          0           0              0          0           (1000 MT)
  Cons.                                                                                                                       

  Feed Waste Dom. 1699         1610       1720        1730       0          1680        0              0          1680        (1000 MT)
  Cons.                                                                                                                       

  Total Dom.      1699         1610       1720        1730       0          1680        0              0          1680        (1000 MT)
  Cons.                                                                                                                       

  Ending Stocks   50           123        29          60         0          29          0              0          29          (1000 MT)

  Total           1759         1733       1749        1800       0          1709        0              0          1709        (1000 MT)
  Distribution                                                                                                                

  CY Imports      0            10         94          0          0          90          0              0          90          (1000 MT)

  CY Imp. from    0            0          70          0          0          60          0              0          60          (1000 MT)
  U.S.                                                                                                                        

  CY Exports      0            0          0           0          0          0           0              0          0           (1000 MT)

  CY Exp. to U.S. 0            0          0           0          0          0           0              0          0           (1000 MT)

  SME             1699         1610       1720        1730       0          1680        0              0          1680        (1000 MT)

                                                                 TS=TD                                                        

                                                                 -123                                                         
  --------------- ------------ ---------- ----------- ---------- ---------- ----------- -------------- ---------- ----------- -----------

## Table 3: Soybean Oil PSD

  ------------ ---------- ----------- ---------- ---------- ----------- -------------- ---------- ----------- -----------
  **Taiwan**                                                                                                  

  **Oil,                                                                (1000                                 
  Soybean**                                                             MT)(PERCENT)                          

  2005         Revised                2006       Estimate               2007           Forecast               UOM

  USDA\        Post\      Post\       USDA\      Post\      Post\       USDA\          Post\      Post\       
  Official     Estimate   Estimate\   Official   Estimate   Estimate\   Official       Estimate   Estimate\   
                          New                               New                                   New         

               10/2005    10/2005                10/2006    10/2006                    10/2007    10/2007     MM/YYYY

  2081         1960       2040        2120       0          2000        0              0          2000        (1000 MT)

  0.171072     0.153061   0.177941    0.171226   0          0.1775      0              0          0.1775      (PERCENT)

  30           40         30          26         40         30          39             0          30          (1000 MT)

  356          300        363         363        0          355         0              0          355         (1000 MT)

  25           80         10          35         0          18          0              0          18          (1000 MT)

  0            0          0           0          0          0           0              0          0           (1000 MT)

  0            0          0           0          0          0           0              0          0           (1000 MT)

  411          420        403         424        40         403         39             0          403         (1000 MT)

  0            0          0           0          0          0           0              0          0           (1000 MT)

  0            0          0           0          0          0           0              0          0           (1000 MT)

  15           15         15          15         0          15          0              0          15          (1000 MT)

  370          365        358         370        0          358         0              0          358         (1000 MT)

  0            0          0           0          0          0           0              0          0           (1000 MT)

  385          380        373         385        0          373         0              0          373         (1000 MT)

  26           40         30          39         0          30          0              0          30          (1000 MT)

  411          420        403         424        0          403         0              0          403         (1000 MT)

  0            0          41          0          0          0           0              0          0           (1000 MT)

  0            0          22          0          0          0           0              0          0           (1000 MT)

  0            0          0           0          0          0           0              0          0           (1000 MT)

  0            0          0           0          0          0           0              0          0           (1000 MT)

                                                 TS=TD                                                        

                                                 -40                                                          
  ------------ ---------- ----------- ---------- ---------- ----------- -------------- ---------- ----------- -----------

## Table 4: Soybean Imports

  ------------------ ------------------------- --------------- -----------
  **Import Trade                                               
  Matrix**                                                     

  **Country**        Taiwan                                    

  **Commodity**      Oilseed, Soybean                          

  Time Period        10/2005                   Units:          1,000 mt

  Imports for:       2005                                      **2006**

  U.S.               1867                      U.S.            1650

  Others                                       Others          

  Brazil             604                       Brazil          500

  Argentina          19                        Argentina       42

  Canada             6                         Canada          6

  Australia          2                         Australia       2

                                                                

                                                                

                                                                

                                                                

                                                                

                                                                

  Total for Others   631                                       550

  Others not Listed                                             

  Grand Total        2498                                      2200
  ------------------ ------------------------- --------------- -----------

## Table 5: Soybean Meal Imports

  ------------------- ----------------------- ---------------- -----------
  **Import Trade                                               
  Matrix**                                                     

  **Country**         Taiwan                                   

  **Commodity**       Meal, Soybean                            

  Time Period         10/2005                 Units:           1,000 mt

  Imports for:        2005                                     **2006**

  U.S.                57                      U.S.             60

  Others                                      Others           

  India               32                      India            30

  Others              1                                         

                                                                

                                                                

                                                                

                                                                

                                                                

                                                                

                                                                

                                                                

  Total for Others    33                                       30

  Others not Listed                                             

  Grand Total         90                                       90
  ------------------- ----------------------- ---------------- -----------

## Table 6: Soybean Oil Imports

  -------------------- --------------------- ----------------- ------------
  **Import Trade                                               
  Matrix**                                                     

  **Country**          Taiwan                                  

  **Commodity**        Oil, Soybean                            

  Time Period          10/2005               Units:            1,000 mt

  Imports for:         2005                                    **2006**

  U.S.                                       U.S.               

  Others                                     Others            

  Argentina            9                     Argentina         15

  Brazil               1                     Brazil            3

                                                                

                                                                

                                                                

                                                                

                                                                

                                                                

                                                                

                                                                

  Total for Others     10                                      18

  Others not Listed                                             

  Grand Total          10                                      18
  -------------------- --------------------- ----------------- ------------

## Table 7: Soybean Meal Prices

  ------------------- ---------------- ----------------------- -----------
  **Country**         Taiwan                                   

  **Commodity**       Meal, Soybean                            

  Prices in           NT Dollar        per uom                 100 kg

                                                               

  Year                2005             2006                    \% Change

  Jan                 1069             1047                    -2%

  Feb                 1052             1025                    -3%

  Mar                 1061             1005                    -5%

  Apr                 1070             1006                    -6%

  May                 1068             1007                    -6%

  Jun                 1058             999                     -6%

  Jul                 1054             997                     -5%

  Aug                 1060             1002                    -5%

  Sep                 1056             1006                    -5%

  Oct                 1063             1014                    -5%

  Nov                 1052                                     -100%

  Dec                 1052                                     -100%

                                                               

  Exchange Rate       NT\$32.22        Local Currency/US \$    

  Date of Quote       12/15/2006       MM/DD/YYYY              
  ------------------- ---------------- ----------------------- -----------

## Table 8: SSG Triggers for imports in 2007

  ----------------- ----------------- ---------------- ------------------
  Category/Year     2007 Trigger      Current Tariff   2007 Trigger Price
                    Volume (MT)       Rate (%)         (NT\$/kg)

  Pork Belly        11,563.6          12.5             30

  Pork Offal        21,979.6          15               Not-established

  Poultry Meat:     55,367.5          20               30
  legs & wings                                         

  Poultry Meat:     3,633.0           20               42
  other cuts                                           

  Poultry Offal     1,394.4           25               Not-established

  Source: Taiwan                                       
  Council of                                           
  Agriculture                                          
  ----------------- ----------------- ---------------- ------------------

## Table 9: Pork Imports vs. Domestic Production and Wholesale Market in Calendar Year. 

+---------+-----------+-----------+---------------------+------------+
| Year    | **Pork    |           | **Domestic Pork     | **Auction  |
|         | Imports   |           | Production in 1,000 | Price in   |
|         | in 1,000  |           | head**              | NT\$/10    |
|         | mt**      |           |                     | 0kg-head** |
+---------+-----------+-----------+---------------------+------------+
|         | **Meat    | **Offal   |                     |            |
|         | (         | Meats     |                     |            |
|         | HS0203)** | (         |                     |            |
|         |           | HS0206)** |                     |            |
+---------+-----------+-----------+---------------------+------------+
| 2002    | 19        | 17        | 10,060              | 4,383      |
+---------+-----------+-----------+---------------------+------------+
| 2003    | 33        | 28        | 9,460               | 5,354      |
+---------+-----------+-----------+---------------------+------------+
| 2004    | 40        | 34        | 9,410               | 5,960      |
+---------+-----------+-----------+---------------------+------------+
| 2005    | 26        | 24        | 9,500               | 5,364      |
| (r      |           |           |                     |            |
| evised) |           |           |                     |            |
+---------+-----------+-----------+---------------------+------------+
| 2006    | 20        | 18        | 9,650               | 4,900      |
|         |           |           |                     |            |
| (es     |           |           |                     |            |
| timate) |           |           |                     |            |
+---------+-----------+-----------+---------------------+------------+
| 2007    | 20        | 18        | 9,500               | 5,200      |
|         |           |           |                     |            |
| (fo     |           |           |                     |            |
| recast) |           |           |                     |            |
+---------+-----------+-----------+---------------------+------------+
| *       |           |           |                     |            |
| Source: |           |           |                     |            |
| Council |           |           |                     |            |
| of      |           |           |                     |            |
| Agri    |           |           |                     |            |
| culture |           |           |                     |            |
| (COA)   |           |           |                     |            |
| for     |           |           |                     |            |
| revised |           |           |                     |            |
| data.*  |           |           |                     |            |
+---------+-----------+-----------+---------------------+------------+

## Table 10: Total Poultry Meat Imports vs. Domestic Production in Calendar Year. 

+------------+--------------+--------------------+--------------------+
| Year       | **Chicken    | **Domestic Poultry | **Farm Price in    |
|            | Meat Imports | Production in      | NT\$/kg**          |
|            | in 1,000 mt  | 1,000,000 birds**  |                    |
|            | (HS0207)**   |                    |                    |
+------------+--------------+--------------------+--------------------+
| 2002       | 31           | 415                | 34.55              |
+------------+--------------+--------------------+--------------------+
| 2003       | 49           | 409                | 30.96              |
+------------+--------------+--------------------+--------------------+
| 2004       | 67           | 417                | 33.70              |
+------------+--------------+--------------------+--------------------+
| 2005       | 88           | 378                | 36.81              |
| (Revised)  |              |                    |                    |
+------------+--------------+--------------------+--------------------+
| 2006       | 118          | 368                | 34.00              |
|            |              |                    |                    |
| (Estimate) |              |                    |                    |
+------------+--------------+--------------------+--------------------+
| 2007       | 120          | 368                | 33.00              |
|            |              |                    |                    |
| (Forecast) |              |                    |                    |
+------------+--------------+--------------------+--------------------+
| *Source:   |              |                    |                    |
| Council of |              |                    |                    |
| A          |              |                    |                    |
| griculture |              |                    |                    |
| (COA ) for |              |                    |                    |
| revised    |              |                    |                    |
| data.*     |              |                    |                    |
+------------+--------------+--------------------+--------------------+

## Table 11: Tariff Rates for Edible Oils and Oil Seeds in Calendar Year

+------------------+----------------+--------------+---------+--------+
| HS Code          | Seed/Oil       | Tariff       | Current | Tariff |
|                  |                | before WTO   | Tariff  | in     |
|                  |                | accession    |         |        |
|                  |                |              |         | 2007   |
+==================+================+==============+=========+========+
| 1201.00          | Soybeans       | 0            | 0       | 0      |
+------------------+----------------+--------------+---------+--------+
| 1507             | Soybean Oil    | 6            | 5       | 5      |
+------------------+----------------+--------------+---------+--------+
| 1513.21.10 &     | Palm Kernel    | 1.25         | 0       | 0      |
| 1513.29.10       | Oil            |              |         |        |
+------------------+----------------+--------------+---------+--------+
| 1511             | Palm Oil       | 2.5          | 0       | 0      |
+------------------+----------------+--------------+---------+--------+
| 1513.11 &        | Coconut Oil    | 3            | 0       | 0      |
| 1513.19          |                |              |         |        |
+------------------+----------------+--------------+---------+--------+
| 1509 & (1510)    | Olive Oil      | 5            | **0.8** | 0      |
|                  |                |              | (5)     |        |
+------------------+----------------+--------------+---------+--------+
| 1205.00.10       | Rape Seeds     | 3.5          | 0       | 0      |
+------------------+----------------+--------------+---------+--------+
| 1514             | Rape (Canola)  | 6            | **4.3** | 4      |
|                  | Oil            |              |         |        |
+------------------+----------------+--------------+---------+--------+
| 1515.21 &        | Corn Oil       | 7.5          | 5       | 5      |
| 1515.29          |                |              |         |        |
+------------------+----------------+--------------+---------+--------+
| 1207.60.00       | Safflower      | 9            | 0       | 0      |
|                  | Seeds          |              |         |        |
+------------------+----------------+--------------+---------+--------+
| 1512.11.20 &     | Safflower Oil  | 12.5         | 5       | 5      |
| 1512.19.20       |                |              |         |        |
+------------------+----------------+--------------+---------+--------+
| 1206.00.00       | Sunflower      | 11           | 0       | 0      |
|                  | Seeds          |              |         |        |
+------------------+----------------+--------------+---------+--------+
| 1512.11.10 &     | Sunflower Oil  | 15           | 5       | 5      |
| 1512.19.10       |                |              |         |        |
+------------------+----------------+--------------+---------+--------+
| *Source: Taiwan  |                |              |         |        |
| Customs Tariff   |                |              |         |        |
| Schedule*        |                |              |         |        |
+------------------+----------------+--------------+---------+--------+

## Table 12: Oil Prices, CIF Taiwan, USD/Kg 

  -------------------------------------------------------------------------
  Type of Edible Oil        MY 2003/04      MY 2004/05      MY 2005/06
  ------------------------- --------------- --------------- ---------------
  Palm Oil (HS1511)         \$0.50          \$0.44          \$0.44

  Canola Oil (HS1514)       \$0.72          \$0.64          \$0.64

  Sunflower Oil             \$0.70          \$0.70          \$0.66
  (HS1512.1110, Crude)                                      

  Soybean Oil (HS150710,    \$0.62          \$0.52          \$0.53
  Crude)                                                    

  *Source: Taiwan Customs*                                  
  -------------------------------------------------------------------------

## Table 13: Oil Imports & Production, 1,000 MT

  -------------------------------------------------------------------------
  Type of Edible Oil        MY 2003/04      MY 2004/05      MY 2005/06
  ------------------------- --------------- --------------- ---------------
  Palm Oil (HS1511)         109.5           138.3           140.5

  Coconut Oil & Palm Kernel 6.7             8.4             8.5
  Oil (HS1513)                                              

  Olive Oil                 4.5             4.5             4.2

  Canola Oil (HS1514)       25.2            27.0            15.2

  Sunflower Oil (HS1512)    26.3            24.2            13.2

  **Total Non-Soy Imports** **172.3**       **202.4**       **181.6**

  Soybean Oil Imports       61.0            34.6            10.2
  (HS1507)                                                  

  Taiwan Soybean Oil        315.0           310.0           363.0
  Production                                                

  Chinese traditional oil:  8.1             8.1             8.8
  Peanut Oil (use calendar                                  
  year data)                                                

  Chinese traditional oil:  13.2            13.5            6.5
  Sesame Oil (use calendar                                  
  year data)                                                

  *Source: Taiwan Customs                                   
  Statistics and Post                                       
  estimates*                                                
  -------------------------------------------------------------------------

## 

# References

TW6002 on Kitchen Scrape as Renewable Hog Feed

TW6017 on Taiwan Bio-Fuels Policy

TW6022 on A New Movement in Taiwan's Agricultural Policy

TW6037 on Containerized Grain Shipment Opportunities