Taiwan Livestock and Products Annual - September 2005
By USDA, Foreign Agricultural Service - This article provides the pork industry data from the USDA FAS Livestock and Products Annual 2005 report for Taiwan. A link to the full report is also provided. The full report includes all the tabular data which we have omitted from this article.Report Highlights:
Taiwan’s decision to reinstate a suspension of U.S. beef imports following the June 2005 confirmation of the second BSE case in the United States halted the swift recovery of U.S. exports. This report assumes that Taiwan's beef market remains closed, and projects that imports will fall back to fall back to 80,000 metric tons after reaching 88 tons this year. Taiwan’s swine sector is undergoing a price-led recovery and will likely show an increase in swine numbers and slaughter through 2006. Imports are price-sensitive and are expected to decline for the balance of 2005 and into 2006.
Executive Summary
Taiwan’s decision to reinstate a suspension of U.S. beef imports following the June 2005
confirmation of the second BSE case in the United States halted the swift recovery of U.S.
market share during the six weeks Taiwan allowed the entry of U.S. beef. This brief window
of opportunity for U.S. exporters is the primary reason that Taiwan’s 2005 beef import
estimate was raised 10 percent. Under the assumption the market will remain closed,
Taiwan’s beef imports are forecast to fall back to the 2004 level of 80,000 metric tons.
With the release of the epidemiology report on August 30, Taiwan authorities can begin the
administrative process to remo ve the current suspension and once again resume imports of
U.S. beef.
Following high pig prices in 2004, Taiwan’s swine sector is undergoing a price-led recovery
and, despite government intentions to stabilize or reduce the size of the swine herd, will
likely show an increase in swine numbers and slaughter through 2006. Porcine Circovirus
Infection is having less of an impact on swine numbers than in prior years, but lower prices
in 2005 and into 2006 will likely lead to poor profitability into next year.
Given the increase in domestic pork production and declining pork prices in 2005, pricesensitive
imports are expected to decline for the balance of 2005 and into 2006. The lifting
of the tariff-rate quota on pork belly and pork will not necessarily lead to additional imports
of these items given the price situation and high current stocks, especially for offal.
Production
Fat pigs slaughter in 2005 is estimated to grow 1.5 percent to 9.53 million head. Pig
farmers, who made good profits in the past two years, have tried hard to increase
production. In 2005, the industry seems to make some progress in combating the disease,
Porcine Circovirus Infection (PCV), which has high mortality in pigs weighing between 15 to
30 kg. A recent pig inventory survey conducted in May 2005 showed that, comparing to
previous surveys done in 6 months and a year ago, every category exhibited significant
increase. With larger standing pigs, total production in the later half of 2005 is estimated to
grow 5 percent from the output 6 months before, making total 2005 pig production at
roughly 9.53 million head. Larger breeding pig numbers have also promised a larger CY2006
pig production, which is estimated at 9.8 million head.
The same survey also indicated that 90 percent of pig farmers wanted to maintain the
current herd size while 7 percent planned to increase production. Only 3 percent planned to
downsize. To prevent an oversupply of pork, Council of Agriculture has been continuously
urging farmers not to expand production.
Prices
Very high pig prices in 2004 encouraged farmers to expand their herd sizes. Pig prices in
2005 began to decline, following heavy media coverage in the spring of illegal slaughtering of
dead/diseased pigs. Pig prices gradually recovered after May. Demand in the second half of
2005 will remain strong and peak around the Moon Festival (the full moon of the eighth lunar
month, September 18, 2005), but is expected to decline afterwards. With larger pig
population, CY2006 pig prices may continue to drop to the level below NT$4,800/100kg,
roughly the break-even point for pig production.
The vast majority of pork meat consumed in Taiwan is produced domestically, with imports
being used mainly for processing or to supplement occasional shortfalls.
In first half year of 2005, Taiwan pig prices declined from the 2004 high levels and imports
slowed accordingly. Till the end of 2005 and continuing into 2006, Taiwan pig prices are
expected to decline further, with a larger domestic pig supply.
Pork imports are very price sensitive. CY2005 pork imports are expected at 28,000 mt
40,000 CWE), down 34% from the 2004 level, due to larger domestic supply and decreased
demand, caused by negative reports of illegal slaughtering of sick and diseased pork. With
even larger domestic supply, CY2006 pork imports are forecast to decline further to 30,000
mt CWE.
Canada replaced the U.S. as the leading pork meat supplier in 2005 because of its cheaper
prices. In terms of import value, the U.S. is still narrowly ahead of Canada.
U.S. Spare rib tips has become the most popular item. U.S. pork picnics, for processing
purpose, is still well-accepted in Taiwan. Pork trimming supplied by Canada seems to be
more competitive, in quality and specification, than U.S. products.
Pork bone imports totaled only 624 mt from January through July 2005. They were 354 mt
from Canada; 186 mt from US; 77 mt from Hungary and 7 mt from Australia.
Under Taiwan’s WTO commitments, Special Safeguards (SSG) came into play following Tariff
Rate Quota (TRQ) liberalization on January 1, 2005.
SSG volume trigger for pork belly in 2005 is 10,066 mt, price trigger is NT$30/kg. Imports
totaled 5,958 mt as of August 26, 2005. SSG volume trigger for pork offal in 2005 is 15,177
mt and there is no price trigger. If SSG is triggered, the tariff rate will increase by 33.3
percent, making duty for belly to grow from 12.5% to 16.67%, and that for offal to grow
from 15% to 20%. If demand is strong and imports are profitable, importers are willing to
pay the extra duty, which applies to all importers. However, pork belly imports in 2005 may
not reach the 10,066 threshold and SSG may not be triggered. The offal SSG will likely be
triggered in 2005 but total imports are expected at only 19,000 mt, much less than the 2004
import level of 25,359 mt. Local traders reported high stocks for imported pig offal. Imports
of both pork belly and pork offal in 2005 will be smaller than the 2004 level.
In 2005, the U.S. remains the leading supplier of pork offal, mainly hocks, rectum, stomach,
and cheek meat. However, its market share is gradually being undermined by European
products, such as pork hocks from the Netherlands and rectum from Denmark.
Policy
Although Taiwan has been FMD-free since 2001 and was declared FMD-free with vaccination
in May 2003 by the World Animal Health Organization (OIE), exports are not likely to recover
to pre-FMD levels. Taiwan’s FMD vaccination rate in pig herd reached 89% in 2004. The
animal health authority’s plan to do without the FMD vaccination on a couple of offshore
islets beginning July 1, 2005 was postponed to August 1 and later suspended indefinitely.
The initial plan to completely stop vaccination in 2006 and get OIE recognition of FMD free
without vaccination in 2007 is now being re-evaluated. In the long term, the very efficient
Taiwan swine industry will continue to produce pork for the local market, with imports mainly
used for processing or to supplement occasional shortfalls.
In order to export meat to Taiwan, a country’s meat quarantine inspection and health
certification system must be reviewed and found acceptable by the Taiwan authorities.
Taiwan currently accepts the pork system of the United States, Canada, Australia, New
Zealand, Denmark, and Sweden and selected packing plants in Japan, Hungary and Finland.
Further Information
To read the full report please click here (PDF format)
Source: USDA, Foreign Agricultural Service - Annual Livestock and Products Report - September 2005