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Taiwan Poultry and Products Annual Overview - August 2005

by 5m Editor
25 August 2005, at 12:00am

By the USDA, Foreign Agricultural Service - This article provides the poultry industry data from the USDA FAS Poultry 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 ommited from this article.

Taiwan Poultry and Products Annual Overview - August 2005 - By the USDA, Foreign Agricultural Service - This article provides the poultry industry data from the USDA FAS Poultry 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 ommited from this article.

Report Highlights:

Imports are rising significantly in the wake of Taiwan’s elimination of all tariff rate quota restrictions. Broiler meat imports are expected to rise nearly 50% this year and another 20% next. The United States is currently in a strong supply position, being one of only six countries certified for poultry exports to Taiwan and the only one of these with sufficient volumes and competitive pricing points. Poultry consumption grew during 2004 and may continue to do so in the next year or two due to production and supply issues faced by other meat proteins. Consumption levels should stabilize in the 770~780K mt range, or fall back slightly, once these issues are resolved / overcome.

EXECUTIVE SUMMARY

Poultry meat and eggs are pillars of the traditional Chinese diet. From kungpao chicken, Peking duck, and stir-fries to Cantonese-style air dried duck, "1,000 year-old" eggs, and deep-fried chicken nuggets, Taiwan today consumes approximately 762 thousand metric tons of poultry meat (about 85% of this chicken) and 7.5 billion eggs annually. This translates into around 32.5 kg of poultry and 380 eggs per capita. Local producers currently supply approximately 90% of the overall poultry meat and offal market, 90% of the broiler meat and offal market and 100% of the egg market. The broiler meat and offal market, in particular, present opportunities for continued significant US export growth over the coming 2~3 year period.

The market for broiler meat and certain relatively lucrative poultry offal categories were subject to strict quota volume limitations until January 1s t, 2005, when imports were normalized, although subject to a WTO-permitted special safeguard (SSG) levy (which adds roughly an additional 6.5% to the Customs -cleared cost of imports). Generally high current market prices for meat proteins, coupled with a still relatively inefficient poultry domestic production base, saw imports into the broiler segment rise exponentially in the months immediately following liberalization. Continuing structural problems with domestic producers, high domestic prices, and increasingly sophisticated marketing programs on the part of overseas producers and associations are expected to help boost imports of broiler meat over the 100,000 mt level within 2 years (2007) – at which time imports could account for roughly 15% of broiler meat consumption.

The United States is the predominant supplier of poultry, and one of only nine countries currently eligible to export to Taiwan based on sanitary approvals. The United States (US) is expected to retain a dominant position through the foreseeable future. Taiwan’s current limited beef imports (Taiwan is currently restricted by BSE related bans to importing primarily from Australia and New Zealand) and chronically high market prices for Taiwan’s other two meat protein staples – pork and seafood – has been encouraging consumers to purchase more chicken over the past year plus and given local producers a welcome respite from nearly 5 years of pressure to reduce production and close less efficient producers. High prices for poultry (about 20% above last year on a month-by-month comparison) reflect this higher consumption of broiler meat. Domestic production of broiler meat is up nearly 17 million head (24K mt) from last year (achieved by shifting production over from native (tuji) hens).

Significantly, this windfall broiler meat consumption is currently being shared relatively equally between local producers and importers (5:4). Taiwan currently exports only limited quantities of poultry products, mostly fresh/frozen meat and prepared chicken and duck eggs, to customers in the region. Taiwan broiler producers, in particular, are hoping to see a growing market for processed broiler breast (white) meat in western markets, particularly the United States. The United States Department of Agriculture (USDA)’s Food Safety Inspection Service is in the midst of the fairly lengthy review process to establish the equivalency of Taiwan’s poultry slaughter and processing inspection system.

Despite relative stable year-to-year demand for poultry over the long-term, the outlook for imports is positive in the critical category of broiler meat. With a cost structure that is stacked against local birds, imported frozen chicken meat, particularly leg quarters and drumsticks, is expected to continue earning market share away from local producers through the foreseeable future. By 2007, imports of frozen chicken drumsticks and leg quarters are currently forecast at more than double 2003 levels (around 100K mt). Given continued favorable pricing for turkey, similar opportunities exist for exports of frozen US turkey meat.

Production

While long-term, the poultry meat production sector in Taiwan is on a gradual downward trend and the market share of imports is rising, broiler production rose nearly 9% (24,000 mt) during 2004 to 299 thousand mt. This is attributed to a continued healthy consumer economy and continued high prices for other proteins including pork, beef and seafood. This year’s reverse in the anticipated 2~4% annual decline, while significant, is grounded in historically high prices for alternative meat proteins, and thus represents a windfall not likely sustainable once factors stabilize for other meats (e.g., additional pork production is brought online, restrictions on US / Canadian beef are eased).

During 2004, domestic production in other categories, including non-broiler chickens (i.e., non-standardized varieties known collectively as tuji), ducks, geese, and turkeys either saw mild declines or maintained production levels similar to the previous year. While broiler production through the long-term faces direct threat from imports, these other categories are relatively insulated due to local taste preferences / factors and may slightly increase or decrease from year to year due largely to local demand factors.

Chickens (both broiler and various non-broiler (tuji) varieties) dominate the poultry industry in Taiwan - accounting for 84% (2004) of all poultry raised. Ducks follow a distant second at around 10%, with geese, turkeys, and game birds accounting for the remainder. During 2005, 380 million head of chicken should be channeled into meat & offal production and an average 34 million head will be engaged as layers. In a similar ratio, Taiwan will slaughter 32 million head of duck this year while employing an average 2.5 million head in egg production. Figures are expected to change significantly in 2006. Eggs of poultry other than chickens and ducks are not produced on a commercial scale.

Further Information

To read the full report please click here

Source: USDA Foreign Agricultural Service - August 2005