Required Report - public distribution

**Date:** 2007/4/30

**GAIN Report Number:** TW7018

TW7018

**Taiwan**

**Grain and Feed**

**Taiwan Grain and Feed Annual**

**2007**

**Approved by:**

![](media/image1.wmf)Alan Hallman

AgTaipei

**Prepared by:**

ChiouMey Perng

**Report Highlights:**

Corn imports are forecast to fall 2 to 3 percent to 4.85 million metric
tons in 2006/07 due to reduced hog production. The Taiwan hog sector is
facing market pressure from high corn prices and low local hog prices.
Taiwan's wheat and rice imports are stable and are forecast to remain at
1.05 million metric tons and 144,720 tons on a brown basis,
respectively, during the forecast period. The United States is expected
to remain the dominant supplier of Taiwan's wheat, rice and corn
imports.

Current exchange rate is \$1 to NT\$33.2 to NT\$33.3.

Includes PSD Changes: Yes

Includes Trade Matrix: No

Annual Report

Taipei \[TW1\]

\[TW\]

**Table of Contents**

[Section I. Summary 4](#section-i.-summary)

[Section II. Wheat Situation & Outlook
4](#section-ii.-wheat-situation-outlook)

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

[Production 5](#production)

[Consumption 5](#consumption)

[Trade 5](#trade)

[Wheat 5](#wheat)

[Feed Wheat 6](#feed-wheat)

[Flour 6](#flour)

[Stocks 6](#stocks)

[Policy 6](#policy)

[Cross-Straits Trade 6](#cross-straits-trade)

[Taiwan Buying Practices and Investment Plans
6](#taiwan-buying-practices-and-investment-plans)

[Section III. Corn Situation & Outlook
7](#section-iii.-corn-situation-outlook)

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

[Corn Production 7](#corn-production)

[Consumption 7](#consumption-1)

[Distillers dried grain (DDGS) 8](#distillers-dried-grain-ddgs)

[Corn Substitutes 8](#corn-substitutes)

[Development of Industrial Uses for Corn
8](#development-of-industrial-uses-for-corn)

[Stocks 8](#stocks-1)

[Trade 9](#trade-1)

[Policy 10](#policy-1)

[Cross-Straits Trade 10](#cross-straits-trade-1)

[Livestock Initiatives 10](#livestock-initiatives)

[Biotechnology Update 11](#biotechnology-update)

[U.S. -- Taiwan Goodwill Missions 12](#u.s.-taiwan-goodwill-missions)

[Section IV. Rice Situation & Outlook
13](#section-iv.-rice-situation-outlook)

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

[Rice Production 13](#rice-production)

[Consumption 13](#consumption-2)

[Stocks 14](#stocks-2)

[Trade 14](#trade-2)

[Import Regime 14](#import-regime)

[Public Sector Imports 14](#public-sector-imports)

[Private Sector Imports 15](#private-sector-imports)

[Import Supply of Glutinous Rice Continues
15](#import-supply-of-glutinous-rice-continues)

[Exports 15](#exports)

[Marketing 16](#marketing)

[Policy 16](#policy-2)

[Stringent Import Inspection 16](#stringent-import-inspection)

[Three Rice Purchase Programs 16](#three-rice-purchase-programs)

[Rice Reform Plan 17](#rice-reform-plan)

[Section V. Statistical Tables 18](#section-v.-statistical-tables)

[Table 4. Corn Domestic Wholesale Prices, 2006-07.
18](#table-4.-corn-domestic-wholesale-prices-2006-07.)

[Table 5. Pork Imports vs Domestic Production and Wholesale Market.
18](#table-5.-pork-imports-vs-domestic-production-and-wholesale-market.)

[Table 6. Total Poultry Meat Imports vs Domestic Production
19](#table-6.-total-poultry-meat-imports-vs-domestic-production)

[Table 7. Feed Production for 2004-2007 in 1,000 mt
19](#table-7.-feed-production-for-2004-2007-in-1000-mt)

[Table 8. Milled Rice Prices 2006-07
20](#table-8.-milled-rice-prices-2006-07)

[Table 9. Rice Imports for 2006 in Metric Tons by HS code (Taiwan
Customs Arrival Data)
20](#table-9.-rice-imports-for-2006-in-metric-tons-by-hs-code-taiwan-customs-arrival-data)

[Table 10. Food Aid Statistics Table for 2006 (on a milled basis)
21](#table-10.-food-aid-statistics-table-for-2006-on-a-milled-basis)

[Table 11. Taiwan's Rice Purchase Programs
21](#table-11.-taiwans-rice-purchase-programs)

[Table 12. Tariff Rates for Grains
22](#table-12.-tariff-rates-for-grains)

[Table 13. Non-Grain & Feed Reports Bibliography
22](#table-13.-non-grain-feed-reports-bibliography)

# Section I. Summary

Reduced hog production, driven by high corn prices and lower domestic
hog prices, are estimated to reduce 2006/2007 Taiwan corn imports by
90,000 Metric tons from 2005/06 levels. Wheat and corn imports in
2006/07 are forecast at 1.05 and 4.85 million metric tons, respectively.
Taiwan has been an important and stable market for U.S. wheat and corn.
Taiwan is the 8^th^ largest market for U.S. wheat exports and the 3^rd^
largest market for U.S. corn exports. In 2005/06 the US supplied 83
percent of wheat imports and 99 percent of corn imports. Since the
January 2002 entry of Chinese Taipei to the World Trade Organization,
Taiwan has allowed the import of 144,720 tons of rice on a brown basis
-- currently via a TRQ. U.S. rice has been a leading supplier of Taiwan
rice imports. Over the four-year period from 2002 to 2005, the United
States supplied 59 percent of Taiwan rice imports. However, Taiwan
delayed its rice tender for the 2006 public sector import quota because
offered bid prices exceeded the ceiling price. U.S. rice exports to
Taiwan are forecast to remain at or over 82,000 tons per year based on
the current market access regime. Rice market access is not expected to
improve without an international agreement.

# Section II. Wheat Situation & Outlook

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

  -------------- ---------- ---------- ----------- ---------- ---------- ----------- ---------- ---------- ----------- ---------
                 2005                              2006                              2007                              UOM
                 Revised                           Estimate                          Forecast                          

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

  **Market Year             07/2005    07/2005                07/2006    07/2006                07/2007    07/2007     MM/YYYY
  Begin**                                                                                                              

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

  Beginning      289        361        289         310        321        289         240        231        289         (1000 MT)
  Stocks                                                                                                               

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

  MY Imports     1197       1100       1050        1100       1050       1050        0          0          1050        (1000 MT)

  TY Imports     1197       1100       1050        1100       1050       1050        0          0          1050        (1000 MT)

  TY Imp. from   986        935        869         0          900        900         0          0          900         (1000 MT)
  U.S.                                                                                                                 

  Total Supply   1486       1461       1339        1410       1371       1339        240        231        1339        (1000 MT)

  MY Exports     26         0          0           20         0          0           0          0          0           (1000 MT)

  TY Exports     26         0          0           20         0          0           0          0          0           (1000 MT)

  Feed           100        100        10          100        100        10          0          0          10          (1000 MT)
  Consumption                                                                                                          

  FSI            1050       1040       1040        1050       1040       1040        0          0          1040        (1000 MT)
  Consumption                                                                                                          

  Total          1150       1140       1050        1150       1140       1050        0          0          1050        (1000 MT)
  Consumption                                                                                                          

  Ending Stocks  310        321        289         240        231        289         0          0          289         (1000 MT)

  Total          1486       1461       1339        1410       1371       1339        0          0          1339        (1000 MT)
  Distribution                                                                                                         

  Yield          0          0          0           0          0          0           0          0          0           (MT/HA)
  -------------- ---------- ---------- ----------- ---------- ---------- ----------- ---------- ---------- ----------- ---------

# Production

Taiwan's wheat production is negligible. All demand is met by imports.

# Consumption

In CY 2006, Taiwan's wheat demand is estimated at 1.05 million metric
tons, of which 1.02 million metric tons is for flour milling, 20
thousand metric tons is for fermentation or brewing, and about 10
thousand metric tons is for feed use. Taiwan's overall wheat consumption
for flour milling is basically stable, whereas wheat for feed use varies
each year. Consumption of wheat food products is increasing slowly,
despite already high per-capita levels. Supporting this increase is high
noodle consumption and a dynamic wheat-based food market driven by
Taiwan's 6,000 bakeries, convenience stores, and supermarkets. Intense
competition between food manufacturers and strong public interest in new
food items encourages a high number of product introductions. This
boosts demand for wheat-based food products, which is supported by
production of specialty flour. There are more than 30 different types of
specialty flour on the Taiwan market. Whole-wheat flour consumption is
anticipated to grow due to increased health consciousness in the current
market and an increase in food safety scandal cases. Whole wheat milled
flours are supplied by imports, whereas locally supplied whole wheat
flour is actually flour with the wheat bran added back in.

# Trade

## 

## Wheat

Since Taiwan does not produce wheat, all demand is met by imports.
Importers sometimes experiment with small imports of feed wheat to
offset high corn prices. The United States is expected to keep an 85+
percent share of the overall wheat market during the forecast period.
However, in 2005/06, the U.S. had an 83 percent share (dropped by 3
percent from a year earlier), while Australia supplied 16 percent (up by
7 percent); and others combined 1 percent. Australian wheat imports to
Taiwan have increased in the recent years. The increase is largely
attributed to the Australia Wheat Board (AWB) Limited's frequent visits
and offers of hospitality to Taiwan wheat importers and users.

As for milling wheat, Taiwan imports mostly U.S. #1 wheat. According to
the Taiwan Flour Millers' Association (TFMA), in CY2006 approximately 58
percent of U.S. imports were HRS or DNS (up by 5 percent from CY2005),
while 29 percent was HRW (up by 3 percent), 12 percent Soft or Western
White Wheat, and one percent hard white. The Australia imports were
Australian prime hard (73 percent) and Australian Hard (27 percent).
This mix varies each year mostly depending on crop quality and price
levels for the different classes of wheat and because of the wheat-food
consumption pattern here.

Despite a 3 percent share decrease in 2005/06 imports, the U.S. market
share has potential to further increase over time if the United States
has supply of U.S. Hard White Wheat. The superior milling
characteristics and price competitiveness of Hard White Wheat are
expected to cut Taiwan imports of Australian hard wheat. Although a
supply constraint has limited Taiwan imports of U.S. Hard White to only
5,000 tons in 2005 and 10,000 tons in 2006 so far, the upward trend for
Hard White is expected to continue. Taiwan wheat importers have
mentioned that a stable wheat supply with reliable gluten quality is
critical for maintaining quality control of flour milling and Chinese
noodle making.

## Feed Wheat

Feed wheat imports are expected to remain small or nil in the upcoming
marketing year, with the forecast at around 10 thousand metric tons,
sourced primarily from India and some from Ukraine, Russia and United
States. Taiwan imposes the same tariffs on milling wheat and feed wheat,
which discourages feed wheat imports. The Taiwan feed millers imported
feed wheat for the first time in 2000 and continued importing in the
following years. However, there was an estimated 8 thousand metric tons
feed wheat imports from Ukraine and Russia in 2005/06. Some feed wheat
arrives in shipments of less than a container, suggesting that it may be
finding use as bird feed.

## Flour

Flour imports will likely remain very low. In general, Taiwan imports a
very small amount of wheat flour that only accounts for about 2 percent
of the total supply. Flour imports in 2005/06 were 24 thousand metric
tons, an increase of one thousand metric tons from a year earlier. Japan
supplied 12 thousand metric tons, Australia and Vietnam supplied 6 and 5
thousand metric tons respectively. Flour exports in 2005/06 were 6
thousand metric tons, primarily to Hong Kong.

# Stocks

Taiwan ending stocks for 2006/07 is expected remained stable along with
stable imports and consumption. Stocks are anticipated to fluctuate some
times along with volatile world wheat prices. Taiwan usually steps up
purchases in response to increasing prices and postpones them when world
grain prices fall; however, with group purchase practice, Taiwan imports
wheat often on a regular schedule to reduce cost on stocks.

# Policy

## Cross-Straits Trade

The most serious potential threat to U.S. wheat exports is an opening to
PRC flour, wheat or processed products. Although liberalization
continues to be delayed by cross-straits relations, local industry
sources expect Taiwan to eventually lift import bans on PRC products.
However, the ruling party's pro-Independence stance and resistance to
integration with the Mainland makes it unlikely that Taiwan will reward
China with wheat or wheat product market liberalization any time soon.
However, opposition party visits to PRC indicate a thaw in cross-straits
relations is possible. In addition, the PRC has shown an increased
willingness to resolve bilateral phytosanitary issues and to provide MFN
for Taiwan's fruit exports. The relative competitive position of the
sector compared with Mainland China may also influence any opening of
the Taiwan flour and instant noodle market.

## Taiwan Buying Practices and Investment Plans

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

# Section III. Corn Situation & Outlook

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

  -------------- ---------- ---------- ---------- ----------- ---------- ---------- ----------- ---------- ---------- ----- --------- ---------- ----------- ---------
                            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 Harvested 9                     9          7           9          9                      7                     0     0                    7           (1000 HA)

  Beginning      893                   762        893         730        682                    738                   653   632                  745         (1000 MT)
  Stocks                                                                                                                                                     

  Production     48                    48         37          48         48                     37                    0     0                    37          (1000 MT)

  MY Imports     4464                  4900       4960        4500       4850                   4850                  0     0                    4800        (1000 MT)

  TY Imports     4464                  4900       4960        4500       4850                   4850                  0     0                    4800        (1000 MT)

  TY Imp. from   4456                  4655       4950        0          4655                   4800                  0     0                    4750        (1000 MT)
  U.S.                                                                                                                                                       

  Total Supply   5405                  5710       5890        5278       5580                   5625                  653   632                  5582        (1000 MT)

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

  TY Exports     0                     0          0           0          0                      0                     0     0                    0           (1000 MT)

  Feed           4450                  4818       4927        4400       4738                   4655                  0     0                    4655        (1000 MT)
  Consumption                                                                                                                                                

  FSI            225                   210        225         225        210                    225                   0     0                    225         (1000 MT)
  Consumption                                                                                                                                                

  Total          4675                  5028       5152        4625       4948                   4880                  0     0                    4880        (1000 MT)
  Consumption                                                                                                                                                

  Ending Stocks  730                   682        738         653        632                    745                   0     0                    702         (1000 MT)

  Total          5405                  5710       5890        5278       5580                   5625                  0     0                    5582        (1000 MT)
  Distribution                                                                                                                                               

  Yield          5.333333              5.333333   5.285714    5.333333   5.333333               5.285714              0     0                    5.285714    (MT/HA)
  -------------- ---------- ---------- ---------- ----------- ---------- ---------- ----------- ---------- ---------- ----- --------- ---------- ----------- ---------

# Corn Production

Nearly all demand for feed grain is met by imports. Taiwan is not
expected to increase corn production for feed use in any significant
quantities. Without a significant production subsidy, domestically
produced corn is not competitive with imported products. Though domestic
imported feed corn wholesale prices surged over NT\$8.30/kg some point
of time in early 2007, compared to previous level between NT\$5 to
NT\$6/kg, imported corn still competitive with domestically produced
feed corn which is priced at a fixed guaranteed price at NT\$15/kg. In
other words, domestic corn production may increase if world corn prices
rise above c.i.f. \$450/mt.

# Consumption

Except 225,000 tons of corn that is wet milled to produce corn syrup,
corn consumption is for feed use.

Taiwan's demand for feed corn is forecast to shrink two to three percent
from 2005/06 in line with an expected reduction in hog production caused
by increasing world corn prices and low hog prices. In March 2007,
Taiwan agricultural authorities tried to boost hog prices by encouraging
farmers to cull 50,000 head of piglets and 20,000 head of sows to reduce
supply. The hog culling projects were implemented in early April. Total
feed demand for 2006/07 and 2007/08 is adjusted accordingly to 7.4
million metric tons (See Table 4-7). Removal of poultry TRQs in 2005
sharply increased imports of poultry meat in CY2005 and CY2006. Industry
sources expect local chicken production to remain at the same level in
CY2006 due partially to higher U.S. chicken meat prices than
domestically produced. Approximately 45 percent of Taiwan's feed
production goes to the poultry sector, with most of the rest going to
swine production.

## Distillers dried grain (DDGS)

Distillers dried grain (DDGS) imports continue to increase, and
substitute for 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.

## Corn Substitutes

Although high corn prices may encourage some small imports of other feed
grains such as feed wheat or barley, it is unlikely that these products
will see large gains in market share. The feed inclusion rate of other
feed grains combined has been 3 to 4 percent in recent years. In 2006
Taiwan imported 124,000 tons of barley (140,000 tons in 2005), 57,000
tons of sorghum (75,000 tons in 2005), and zero tons of Indian wheat
(16,000 tons in 2005). Taiwan also had 130,000 tons of old rice
available for feed use in 2006 and 60,000 tons annually in future years.
In 2006, the feed inclusion rate for other grains combined fell below 3
percent, 2.6 percent, in recent years. However, cassava imports or
inclusion rate had gone up to almost one percent to 4.8 percent from a
year earlier. Estimated feed inclusion rate for corn for 2006 remained
at approximately 65, based on corn supply and feed production estimates.

[]{.mark}

## Development of Industrial Uses for Corn

The U.S. Grains Council (USGC) office in Taiwan has been developing the
Taiwan bioplastics market, which could eventually become a significant
outlet for U.S. corn. USGC is also exploring ways to increase the use of
biodegradable plastics to meet demand created by growing environmental
restrictions on the use of conventional petroleum products. Problems
with the functionality of the bio-plastic in some applications have led
to limited substitution for the use of conventional plastic for some
types of food packaging. In addition, there is no composting system
established for bioplastic wastes, which go to incinerators unlike
petroleum plastics wastes are recycling. This has weakened market
interest in expansion of bioplastic consumption. In 2006, total PLA
exports to Taiwan were 4,800 tons. Though Taiwan cut the tariff on PLA
chips to zero percent in mid 2006, Taiwan's demand for PlA would very
much depend on if there is environmental friendly waste treatment system
in place for biodegradable plastics, which would then endorsed PLA
promotions. Reportedly, there were debates in the Taiwan EPA on the
comparative benefits of burning bioplastics versus recycling petroleum
plastics.

# Stocks

Taiwan is a stable net corn import market, and in general, its stock
levels remain around two and a half months of consumption, including
landed stocks and stocks still on the water, to secure supplies and
reduce costs.

With increasing containerized corn shipments to Taiwan, in September
2006, corn containers arrived at Taiwan ports without photo certificates
and correct shipping documents, which delayed customs clearance. 2005/06
ending stocks were lower due to containers stuck at ports for customs
clearance.

2006/07 ending stocks are anticipated to be lower, too. This is because
Taiwan livestock sector is currently facing double prices pressure from
high world corn prices and lower domestic hog prices (refer to the table
below). This has contributed to hesitation among importers.

  -------------- -------------- -------------- -------------- ---------------
  **Year**       **c.i.f. U.S.  **Domestic     **Commercial   **Hog Auction
                 corn price**   wholesale corn Hog feed price Price in
                                price**        for finisher** 100-kg-head**

  2005 Average   \$144/mt       NT\$6.16/kg    NT\$10.24/kg   NT\$5,364

  2006 Average   \$149/mt       NT\$6.44/kg    NT\$10.39/kg   NT\$4,955

  February 2007  \$205/mt       NT\$8.26/kg    NT\$11.32/kg   NT\$4,795

  Source:                                                     
  Council of                                                  
  Agriculture &                                               
  Taiwan Customs                                              
  (Exchange                                                   
  rate: \$1 =                                                 
  NT\$33)                                                     
  -------------- -------------- -------------- -------------- ---------------

# Trade

Taiwan corn imports for 2006/07 and 2007/08 are forecast at 4.85 and
4.80 million metric tons, which is 2 to 3 percent decrease from the
level of 2005/06 in line with decreases in domestic hog production.

[]{.mark}

The United States has enjoyed at least a 95 percent share of total
imports for number of years and is expected to remain the principle corn
supplier, although high prices may slightly erode market share by
encouraging experimentation with feed wheat or corn from new origins.
High corn prices usually spur small-volume corn imports from non-U.S.
sources, with Argentina being the largest competitor. PRC and Thai corn
are also expected to enter Taiwan in small amounts along with minor
shipments from Southeast Asia.

During the forecast period, the largest potential threats to the U.S.
corn market in Taiwan are increasingly competitive South American corn
exports to Taiwan and a steeper than expected decline in the Taiwan hog
sector. Geographical proximity, the availability of smaller shipments
and improvement in the cross-strait relationship could create
opportunities for PRC corn in the future. However, increasing container
shipments of U.S. corn is likely able to compete with PRC corn in small
shipments. According to local industry, approximately 810,000 MT,
accounting for 16 percent of U.S. corn shipments, were shipped to Taiwan
in containers in CY 2006. This is a 6 percent increase from a year
earlier. In first three months of 2007, approximately 30 to 40 percent
of corn was shipped to Taiwan via containers according to the Taiwan
trade. Containerized shipments provide Taiwan importers and U.S.
exporters market opportunities along with problems in logistics and
document delays. In September 2006, many corn containerized shipments
were stuck at the ports of entry due delays of phyto certificates and
incorrect shipping documents associated with wrong container numbers or
incorrect serial numbers that resulted from logistics problems. This
drove up domestic corn prices and the swine industry petitioned Taiwan
authority for lifting import bans on PRC corn for the period of November
20 to February 28, 2007.

In the short-term, tightening PRC corn supplies and growing domestic
demand have reduced the immediate threat of large-scale corn exports to
Taiwan.

# Policy

## Cross-Straits Trade

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

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

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

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

-   November 20, 2006 -- February 2007, with zero imports

Since February 28 2007, the market has been closed. Taiwan authorities
review imports restrictions of PRC goods every six months. Taiwan also
reviews petitions submitted by industry groups. The story of PRC corn
has been that Taiwan feed millers with investments in China link up with
Taiwan swine producers and petition Taiwan authorities to permanently
end the import ban whenever world corn prices rise.

[]{.mark}

Although periodic market openings to PRC corn may continue, allowing its
entry permanently is a major step that would only likely occur after
lengthy deliberations. There are several reasons for this caution: One,
Taiwan commercial feed millers/corn importers have resisted the
introduction of PRC corn because it will undermine their long-standing
group buying arrangements that have allowed companies to import large
cargoes on favorable terms. Two, the PRC has not proven to be a reliable
supplier to other markets because it has cancelled shipments with little
advance notice. Three, PRC corn is of uncertain quality, which could
complicate attempts to calculate feed rations. Four, China appears to be
subsidizing corn exports, which is contrary to its WTO Accession
Agreement commitments. The export subsidy was the major reason why PRC
corn was competitive in Taiwan in 2002-2004; however it didn't apply to
the last case. From November 20, 2006 to February 2007, the Taiwan Feed
Industry Association (TFIA) on behalf of Taiwan feed millers and hog
farmers expressed to COFCO its intend of purchasing 500,000 tons of PRC
corn, and COFCO offered its quotations a couple times; however, resulted
in no deals due partially to its uncompetitive prices to U.S. corn and
tedious price and tonnage negotiation process between COFCO and TFIA.

[]{.mark}

If the ban were lifted, the geographic proximity of Northeast China to
Taiwan could allow smaller shipments, faster delivery and lower carrying
costs for Taiwan importers relative to U.S. corn. PRC shipments could
also make it possible for small firms to import corn independently of
the traditional major buying groups. On the other hand, China's
advantage in making small shipments may be offset by U.S. feed grain
supplier's ability to use containerized shipments to supply Taiwan. Very
low container backhaul rates to Taiwan from the U.S. could make this an
attractive prospect for U.S. grain exporters.

## Livestock Initiatives

To adjust to post-WTO trade conditions and 2005 import liberalization,
Taiwan livestock and feed industries are working to improve the
competitiveness of Taiwan poultry and swine production. The National
Animal Industry Foundation (NAIF) was formed in January 2000 to support
the differentiation between locally produced chicken and pork products
from imported products by establishing logos related to freshness and
taste. The Taiwan Council of Agriculture (COA) is also attempting to
improve the quality of domestically produced meat and poultry products
in order to compete more effectively with imported products. COA has
also worked to reestablish Food and Mouth Disease (FMD) free status in
order to resume pork exports to Japan. FMD free status without
vaccination is scheduled for April 1, 2007 in trial areas. In addition,
COA is promoting a traceability system to differentiate locally produced
meats from imported products, and to market local products on the basis
of freshness, safety and quality.

In 2006, to easy consumer's fears of local supplied pork adulterated by
diseased pigs, Taiwan agricultural authorities took the initiative to
establish a livestock insurance program. Approximately two thirds of the
hog population has joined the newly initiated livestock insurance
program, which compensates farmers for disposal of diseased pigs in an
effort to prevent illegal pork from dead pigs entering the food supply.

In early 2007, Taiwan agricultural authorities set up a compensation
program for depopulated hogs when the market signals an over supply.
Farmers are required to register the size of their herds in order to
participate in the program. Broilers, hens for egg production and other
crops are also included in this balance supply-and-demand compensation
program. It is anticipated that the Taiwan livestock and poultry sectors
will "stabilize" in 2007.

## Biotechnology Update

The proposed Biotech Basic Law is no longer being considered and Taiwan
is moving toward a U.S. style interagency approach. The new draft
biotech evaluation guidelines will be announced by mid-year, and the
guidelines on stacked traits will be announced during the second half of
the year. Early reports are that the guidelines are similar to codex and
if there is no interaction between stacked events and the events have
already been approved additional reviews will not be required. By the
end of 2008 DOH expects to extend its regulatory regime to biotech crops
other than corn and soybeans. DOH has also funded a Consultative Center
for local crop developers to go to for help in going through the food
safety regulatory process.

The current Taiwan agricultural biotechnology regulations are only
applied to soybeans, corn and products. No bioengineered soybeans or
corn may be produced, processed, prepared, packed, and imported or
exported unless they are registered. All bioengineered varieties of
soybeans and corn must be registered and approved by DOH Food Safety
Bureau (FSB). Taiwan has approved 14 of the most widely commercialized
bioengineered corn and soybean events. A list of these 14 biotech
varieties can be found at:

<http://food.doh.gov.tw/chinese/info/gmo5.htm>

Taiwan implemented regulations for LMOs under the terms of its recently
amended Plant Variety and Plant Seed Act, which went into effect June 9,
2005. Its related regulations and rulings can be found at:

<http://law.moj.gov.tw/eng/fnews/Fnmore.asp?lawType=c>.

The "Rules for Approving Import/Export Transgenic Plants" were announced
on July 7, 2005. Commodities for food, feed and processing use have been
excluded from the ruling and are not required to apply for additional
approval registration to the Taiwan authority at the Bureau of Animal
and Plant Health Inspection and Quarantine (BAPHIQ).

## U.S. -- Taiwan Goodwill Missions

Taiwan is preparing to send another "Goodwill Delegation" in June 2007.

In September 2005, Taiwan bulk commodity importers signed non-binding
Letters of Intent to import a total of at least 1.7 million metric tons
of wheat, 7.5 to 10 million tons of corn and 2.6 to 2.8 million tons of
soybeans in 2006 and 2007.

# Section IV. Rice Situation & Outlook

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

  -------------- ---------- ---------- ----------- ---------- ---------- ----------- ---------- ---------- ----------- ---------
                 2005                              2006                              2007                              UOM
                 Revised                           Estimate                          Forecast                          

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

  **Market Year             01/2005    01/2005                01/2006    01/2006                01/2007    01/2007     MM/YYYY
  Begin**                                                                                                              

  Area Harvested 269        269        269         258        258        263         0          0          258         (1000 HA)

  Beginning      249        437        437         182        382        336         151        390        284         (1000 MT)
  Stocks                                                                                                               

  Milled         1033       1033       1033        1044       1044       1110        0          0          1044        (1000 MT)
  Production                                                                                                           

  Rough          1465       1467       1467        1481       1481       1595        0          0          1500        (1000 MT)
  Production                                                                                                           

  Milling Rate   7049       7041       7041        7049       7049       6960        0          0          6960        (1000 MT)
  (.9999)                                                                                                              

  MY Imports     125        63         65          125        189        101         0          0          166         (1000 MT)

  TY Imports     125        63         65          125        189        101         0          0          166         (1000 MT)

  TY Imp. from   0          21         21          0          127        51          0          0          90          (1000 MT)
  U.S.                                                                                                                 

  Total Supply   1407       1533       1535        1351       1615       1547        151        390        1494        (1000 MT)

  MY Exports     100        26         26          100        100        20          0          0          20          (1000 MT)

  TY Exports     100        26         26          100        100        20          0          0          20          (1000 MT)

  Total          1125       1125       1173        1100       1125       1243        0          0          1173        (1000 MT)
  Consumption                                                                                                          

  Ending Stocks  182        382        336         151        390        284         0          0          301         (1000 MT)

  Total          1407       1533       1535        1351       1615       1547        0          0          1494        (1000 MT)
  Distribution                                                                                                         

  Yield (Rough)  5.446097   5.453532   5.453532    5.74031    5.74031    6.064639    0          0          5.813953    (MT/HA)

                                                                                                TS=TD                  

                                                                                                -390                   
  -------------- ---------- ---------- ----------- ---------- ---------- ----------- ---------- ---------- ----------- ---------

# Rice Production

Under the current WTO agreement, the rice TRQ quota amount is 144,720
tons on a brown rice basis (126,000 tons on a milled basis). Taiwan has
set its targeted rice production remains slightly above 1 million tons
on a targeted production area of 258,000 hectares to accommodate its
rice TRQ imports. There are no out-of-quota imports recorded because of
the very high out-quota-tariff rate of NT\$45/kg. Under the TRQ,
imported rice prices are about half of locally produced rice. In 2006,
domestically grown rice in the wholesale market was priced on average
NT\$25.74/kg, compared to c.i.f. price at NT\$15.40/kg for U.S. rice and
NT\$11.32/kg for Thai rice on a brown basis.

In each year, there only are minor variations in production areas and
yields.

# Consumption

Per capita milled rice consumption in 2005 is 48.60 kilograms, about the
same as previous year, according to Taiwan's Council of Agriculture
(COA). Estimated per capita consumption for 2006 and 2007 remains at
this level.

Market promotions are unlikely to increase total demand, but could shift
rice significantly between varieties and origins. In addition to human
consumption, there are about 11,000 tons for seeding and 60,000 tons in
2005, 130,000 tons in 2006 and estimated 60,000 tons for feed use.
Taiwan feed industry strongly petitioned to Taiwan agricultural
authority for releasing old rice for feed use when the world corn price
surged in 2006.

# Stocks

Estimated Taiwan ending rice stocks are fell in 2005 and 2006 because of
a delay in public rice imports. However, stocks in 2007 are expected to
increase due to 2006 public import shifted to 2007.

# Trade

## Import Regime

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

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

Although Taiwan has switched to a TRQ regime, it has fulfilled its
obligation to import the full quota amount of rice; with virtually 100
percent fill rates for quotas both in public and private trade. It,
however, has been unable to fill its public sector quota by the end of
the calendar year in 2005 and 2006 due to legislated ceiling price
requirements. See Table 6 below for quota fill data.

## Public Sector Imports

In October 2006, Taiwan announced its first Simultaneous-Buy-Sell (SBS)
rice tender for ten thousand tons under the 2006 public sector quota.
The process is designed for multiple winners and contracts are awarded
to bidders who offer the highest mark-ups in terms of the difference
between import and market price. The SBS tender is not associated with a
grain specification so that it is tendered for all types and forms of
rice. In 2006, only 1,480 tons out of target 10,000 tons was
successfully tendered to three importers since SBS was first time
introduced to the rice trade industry. The rest target SBS quota has
been translated into normal tenders. Twenty thousand metric tons of rice
under the 2007 public sector quota will be tendered under (SBS) system.
As of reporting day, Taiwan has contracted 1,500 tons of its 2007 SBS
tender for delivery by December 31, 2007. The tender schedule for the
remaining 74,068 tons under the 2007 public sector quota will be
announced shortly.

About the 2006 public sector quota tender schedule, as of reporting day,
Taiwan has successfully tendered and contracted 78,248 tons or 83
percent of its 2006 public sector rice quota. The remaining 13 percent
of the 2006 public sector quota is divided into two biddings, one for
14,000 tons of medium grain and the other 1,820 tons for short or medium
brown. These two bids failed a couple times due to offered bid prices
exceeded ceiling prices. Taiwan is bound by government purchase
regulations and will continue the tender process until these two tenders
succeed. At this point, the United States has a 75 percent share of the
public sector quota. The United States continues to dominate the public
rice trade, with a 75, 75, 83 and 80 percent shares in 2002-2005 public
imports, respectively.

[]{.mark}

It is anticipated that the remaining 2006 public sector quota rice of
94,068 tons on a brown basis will enter Taiwan during 2007. In 2006,
Taiwan delayed its completion of public rice tenders because offered
bidding price exceeded the set ceiling price. Approximately 65,000 tons
on a brown basis of the 2005 public sector quota rice entered into 2006
imports based on Taiwan Customs data.

## Private Sector Imports

Under the TRQ, importers bid for quota rights that are sold to the
highest bidder. Using the so-called "System Three" quota bidding system,
Taiwan has successfully allocated all 50,652 mt (brown basis) of its
annual private sector import quota rights to local importers since
Taiwan's entry to the WTO in 2002. Taiwan has allocated two-third of it
2007 quota rights to 72 importers with the bid prices ranging from
NT\$7.603/kg to NT\$14.500/kg (brown basis). The remaining one-third of
the 2007 private sector import quota will be allocated on April 30 thru
competitive bidding. The specific quota allocation results for the
private trade were reported in GAIN TW7012. Prices in 2007 were
significantly lower than the level of 2006 due to higher domestic
supply. The cost for quota rights reflects conditions in the local and
international rice markets -- higher local relative prices make import
rights more valuable and vice versa.

[]{.mark}

The private quota has been 100 percent filled. Taiwan did not even have
to use its quota reallocation mechanism in last two years, which
redistributes unused import rights. Only a few quota holders, who failed
to import rice before September 15, had to request extension of their
quota rights to the end of year.

## Import Supply of Glutinous Rice Continues

Taiwan consumed approximately 85,000 tons (milled basis) of glutinous
rice a year in 2005 and 2006, with a respective 29 percent and 16
percent of import supply. Taiwan imported 24,000 tons of glutinous rice
in 2005 and 14,000 tons in 2006, and its domestic production was 60,000
tons (milled basis) in 2005 and 73,000 tons in 2006. With efficient
supply, glutinous rice market has quiet and prices lowered from
approximately NT\$44/kg to NT\$40/kg for both short grain and long grain
milled glutinous, as of reporting day.

With a desire to stabilize prices, Taiwan has continued to tender for
glutinous rice in recent years. (See Table 7 for Taiwan Customs
statistics on HS codes)

## Exports

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

In 2006, commercial exports amounted to 400 mt (milled basis), of which
271 mt or 68 percent was destined for Japan. Taiwan's rice industry was
very proud of entering the Japan market since its exports meet Japan's
sanitary standards, one of the most stringent in the world. Taiwan
authorities and growers have used this Japan trade to promote
domestically grown rice to local consumers.

Taiwan also sent 19,500 tons of rice (milled basis) as food aid to needy
countries in 2006 to control stocks. (See Table 8 for details.)

# Marketing

Since Taiwan's rice production cost is much higher than imported rice,
Taiwan agricultural authorities have been working with local rice
millers/farmers to improve quality under a voluntary Taiwan Good Rice
Program. In September 2004, Taiwan agricultural authority launched its
first rice contest to highlight Taiwan's best rice in terms of specialty
varieties and freshness. The rice contest is held twice a year
designating two harvests, one begins in May and the other in September.
In 2006, Taiwan took another initiative to establish a market platform
for trading domestically grown specialty good quality rice to end users
to ensure profits of rice farmers who devoted to grow quality rice.

Taiwan rice producers have also attempted to gain from other changes in
consumption. With the rise of fusion food, Taiwan rice producers have
aimed to compete with imported rice from various suppliers though exotic
menu promotions.

As imported rice is cheaper than domestically grown rice and local
consumers are used to local rice taste, many Taiwan millers prefer
marketing a 20/80 of imported/Taiwan rice mix to increase profits. In
March 2006, a congressman criticized Taiwan authorities for allowing
mixed origin rice packs to be promoted as domestic rice with county
geographical indication, which has misled consumers. As a consequence,
Council of Agriculture (COA) announced in April, all mixed origin rice
pack should have mix ratio and origins on the front of the package,
effective July 1, 2006.

These marketing endeavors of locally produced rice are becoming market
challenges to the U.S. Rice Export Federation's menu promotions.

# Policy

## Stringent Import Inspection

Imported rice continues to be inspected on a lot-by-lot basis for
pesticide residues, heavy metal and alflatoxin by the Bureau of
Standards, Metrology and Inspection (BSMI).

Taiwan has recently notified the WTO of changes to its food import
inspection regulations and is expected to make its decision on the new
regulations in June, and implement the new regulations in June or July.
The proposed new import inspection regulation is on a risk-based
inspection philosophy. U.S. rice shipments to the Taiwan market have
been one hundred percent compliant with Taiwan's import standards for
rice.

## Three Rice Purchase Programs 

Two voluntary programs existed under which farmers can sell rice to
Taiwan central authorities for pre-established prices: the guaranteed
purchase program since 1974 and guidance purchase program since 1978.
Sales under these programs are limited to certain quantities per
hectare. If a farmer were to sell the maximum per-hectare quantities
allowable under these two programs, program sales would roughly equal
half of production. The actual purchases combined was 23 percent of the
total production in 2005, compared to average wholesale price at
NT\$19.49/kg for Japonica paddy rice and NT\$18.04/kg for Indica paddy
rice.

In October 2003, Council of Agriculture (COA) allocated a NT\$2 billion
(approximately \$600 million) from the Import Relief Measure funds to
purchase additional paddy rice to stabilize the local rice market. This
newly added program is "surplus purchase". The eligible amount of
surplus purchase is set at 3,000 kg/ha for the spring crop and 2,360
kg/ha for the second crop. These were calculated on the five-year,
1998-2002, average production level minus the existing two basic
purchases. The surplus purchases were triggered by declining paddy rice
prices that slipped below the five-year average level of NT\$15.6/kg.
The surplus purchases have pushed up the paddy rice price to NT\$16.2/kg
on December 12, 2003, and keep above ever since. The average paddy price
in March 2007 was NT\$17.89/kg and NT\$18.01/kg for Japonica and Indica
rice, respectively.

# Rice Reform Plan

Taiwan is considering moving to a policy that directly supports farmer
income and away from its current policy of protecting high domestic rice
prices via a rice purchase mechanism and a prohibitive out of quota
tariff.

The direct payment program in Taiwan's proposed rice policy reform plan
consists of a fixed payment and an adjustable payment. The objective of
the rice policy reform is to provide rice farmers with the same level of
income as rice farmers under the current purchase program and to be
compliant with the putative outcome of the Doha Round. The possibility
of switching the current rice purchase program to a direct payment
program was included in Taiwan's agricultural policy new movement,
announced by the Council of Agriculture (COA) Minister Su in July 2006
(refer to TW6022). Rice policy reform has been a topic of discussion in
meetings between Taiwan\'s agricultural officials and Taiwan rice
farmers and industry representatives.

# Section V. Statistical Tables

## Table 4. Corn Domestic Wholesale Prices, 2006-07.

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

  **Commodity**        Corn                                   

  Prices in            NT Dollar     per uom                  100 kg

                                                              

  Year                 2006          2007                     \% Change

  Jan                  607           820                      35%

  Feb                  595           826                      39%

  Mar                  589           842                      43%

  Apr                  593                                    -100%

  May                  600                                    -100%

  Jun                  600                                    -100%

  Jul                  603                                    -100%

  Aug                  616                                    -100%

  Sep                  641                                    -100%

  Oct                  704                                    -100%

  Nov                  762                                    -100%

  Dec                  818                                    -100%

                                                              

  Exchange Rate        33.16         Local Currency/US \$     

  Date of Quote        04/19/2007    MM/DD/YYYY               
  -------------------- ------------- ------------------------ ------------

## Table 5. Pork Imports vs Domestic Production and Wholesale Market.

+--------+-----------+-------------+---------------------+------------+
| Year   | **Pork    |             | **Domestic Pork     | **Auction  |
|        | Imports   |             | Production in 1,000 | Price in   |
|        | in 1,000  |             | head**              | NT\$/10    |
|        | mt**      |             |                     | 0kg-head** |
+--------+-----------+-------------+---------------------+------------+
|        | **Meat**  | **Offal**   |                     |            |
|        |           |             |                     |            |
|        | **(       | *           |                     |            |
|        | HS0203)** | *(HS0206)** |                     |            |
+--------+-----------+-------------+---------------------+------------+
| 2002   | 19        | 10          | 10,060              | 4,336      |
+--------+-----------+-------------+---------------------+------------+
| 2003   | 33        | 23          | 9,460               | 5,298      |
+--------+-----------+-------------+---------------------+------------+
| 2004   | 40        | 38          | 9,410               | 5,912      |
+--------+-----------+-------------+---------------------+------------+
| 2005   | 26        | 24          | 9,500               | 5,364      |
+--------+-----------+-------------+---------------------+------------+
| 2006   | 18        | 23          | 9,650\*             | 4,955      |
+--------+-----------+-------------+---------------------+------------+
| 2007   | 20        | 18          | 9,350\*             | 5,200      |
|        |           |             |                     |            |
| (      |           |             |                     |            |
| fore.) |           |             |                     |            |
+--------+-----------+-------------+---------------------+------------+
| *S     |           |             |                     |            |
| ource: |           |             |                     |            |
| C      |           |             |                     |            |
| ouncil |           |             |                     |            |
| of     |           |             |                     |            |
| Agric  |           |             |                     |            |
| ulture |           |             |                     |            |
| (COA)  |           |             |                     |            |
| and    |           |             |                     |            |
| Taiwan |           |             |                     |            |
| C      |           |             |                     |            |
| ustoms |           |             |                     |            |
| Statis |           |             |                     |            |
| tics.* |           |             |                     |            |
|        |           |             |                     |            |
| \* COA |           |             |                     |            |
| has    |           |             |                     |            |
| not    |           |             |                     |            |
| yet    |           |             |                     |            |
| fin    |           |             |                     |            |
| alized |           |             |                     |            |
| its    |           |             |                     |            |
| 2006   |           |             |                     |            |
| hog    |           |             |                     |            |
| prod   |           |             |                     |            |
| uction |           |             |                     |            |
| n      |           |             |                     |            |
| umber. |           |             |                     |            |
| Hog    |           |             |                     |            |
| prod   |           |             |                     |            |
| uction |           |             |                     |            |
| fo     |           |             |                     |            |
| recast |           |             |                     |            |
| for    |           |             |                     |            |
| 2007   |           |             |                     |            |
| was    |           |             |                     |            |
| ad     |           |             |                     |            |
| justed |           |             |                     |            |
| down   |           |             |                     |            |
| by 3   |           |             |                     |            |
| p      |           |             |                     |            |
| ercent |           |             |                     |            |
| from   |           |             |                     |            |
| 2006   |           |             |                     |            |
| due to |           |             |                     |            |
| an     |           |             |                     |            |
| over   |           |             |                     |            |
| supply |           |             |                     |            |
| from   |           |             |                     |            |
| 2006.  |           |             |                     |            |
+--------+-----------+-------------+---------------------+------------+

## Table 6. Total Poultry Meat Imports vs Domestic Production 

+----------+----------------+--------------------+--------------------+
| Year     | **Chicken Meat | **Domestic Poultry | **Farm Price in    |
|          | Imports in     | Production in      | NT\$/kg**          |
|          | 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             | 394                | 36.81              |
+----------+----------------+--------------------+--------------------+
| 2006     | 105            | 368                | 33.71              |
+----------+----------------+--------------------+--------------------+
| 2007     | 120            | 368                | 33.00              |
|          |                |                    |                    |
| (fore.)  |                |                    |                    |
+----------+----------------+--------------------+--------------------+
| *Source: |                |                    |                    |
| Council  |                |                    |                    |
| of       |                |                    |                    |
| Agr      |                |                    |                    |
| iculture |                |                    |                    |
| (COA)    |                |                    |                    |
| and      |                |                    |                    |
| Taiwan   |                |                    |                    |
| Customs  |                |                    |                    |
| Stat     |                |                    |                    |
| istics.* |                |                    |                    |
+----------+----------------+--------------------+--------------------+

## 

## Table 7. Feed Production for 2004-2007 in 1,000 mt

  -----------------------------------------------------------------------
  Feed Production     2004         2005         2006 (esti.) 2007 (fore.)
  ------------------- ------------ ------------ ------------ ------------
  Total Compound Feed 7,406        7,559        7,580        7,400
  Produced                                                   

  by commercial       5,004        5,099        5,120        5,000
  producers                                                  

  by integrated       2,403        2,460        2,460        2,400
  producers                                                  

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

## Table 8. Milled Rice Prices 2006-07

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

  Country              Taiwan                                 

  Commodity            Rice, Milled                           

  Prices in            NT Dollar     per uom                  100 kg

                                                              

  Year                 2006          2007                     \% Change

  Jan                  3498          3410                     -3%

  Feb                  3503          3403                     -3%

  Mar                  3488          3401                     -2%

  Apr                  3437          3334                     -3%

  May                  3394                                   -100%

  Jun                  3386                                   -100%

  Jul                  3397                                   -100%

  Aug                  3399                                   -100%

  Sep                  3420                                   -100%

  Oct                  3420                                   -100%

  Nov                  3416                                   -100%

  Dec                  3416                                   -100%

                                                              

  Exchange Rate        33.16         Local Currency/US \$     

  Date of Quote        04/19/2007    MM/DD/YYYY               
  -------------------- ------------- ------------------------ ------------

## Table 9. Rice Imports for 2006 in Metric Tons by HS code (Taiwan Customs Arrival Data)

  ----------- ---------- ---------- ---------------- -------------------- ---------------- -------------
  Origin      HS100610   HS100620   HS100630         HS100630-0010        HS100640         Total/Share
              (paddy)    (brown)    (milled-total)   (milled-glutinous)   (broken-milled   (on a milled
                                                                                           basis)

  U.S.A.      0          56,042     2,198            1,604                0                51,515/51%

  Australia   0          2,488      143              0                    0                2,332/2%

  Cambodian   0          0          25               25                   0                25

  Egypt       0          0          4,501            0                    0                4,501/5%

  Thailand    0          7,277      34,469           12,387               661              41,533/41%

  Japan       1          24         446              5                    0                468/0.5%

  Indonesia   0          362        40               0                    0                358/0.4%

  India       0          0          29               0                    0                29

  Vietnam     0          0          105              105                  0                105/1%

  Italy       0          0          4                0                    0                4

  Total       1          66,193     41,960           14,126               661              100,870
  ----------- ---------- ---------- ---------------- -------------------- ---------------- -------------

## 

## 

## 

## 

## 

## Table 10. Food Aid Statistics Table for 2006 (on a milled basis)

  ------------------------------------ ----------------------------------
  Recipient Destination                Tonnage

  Cambodia                             5,000

  Indonesia                            6,000

  Lesotho                              2,500

  Pakistan                             1,000

  Swaziland                            5,000

  Total                                19,500

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

## Table 11. Taiwan's Rice Purchase Programs

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

## Table 12. Tariff Rates for Grains

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

## 

## Table 13. Non-Grain & Feed Reports Bibliography

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

  TW6022    07/09/2006   A New Movement in Taiwan's Agricultural Policy

  TW6039    10/20/2006   Announcement of 1^st^ SBS Rice Tender for Public
                         Sector Imports

  TW7002    01/12/2007   Public Rice Tender Update

  TW7005    02/06/2007   Livestock Report

  TW7012    03/23/2007   Private Rice Tender Update

  TW7014    03/20/2007   Public Rice Tender Update

  TW7015    03/26/2007   Hog Prices and Inventories

  TW7016    03/28/2007   New Import Inspection Regulations
  --------- ------------ -------------------------------------------------