Soybean Oilmeal Situation and Outlook

Meal, Soybean

2013/2014

2014/2015

2015/2016

Market Begin Year

Oct 2013

Oct 2014

Oct 2015

Taiwan

USDA Official

New post

USDA Official

New post

USDA Official

New post

Crush

1,925

1,925

1,970

1,900

0

2,000

Extr. Rate, 999.9999

1

1

1

1

0

1

Beginning Stocks

10

10

10

10

0

15

Production

1,512

1,513

1,550

1,490

0

1,570

MY Imports

22

21

35

30

0

25

MY Imp. from U.S.

7

1

5

2

0

2

MY Imp. from EU

0

0

0

0

0

0

Total Supply

1,544

1,544

1,595

1,530

0

1,610

MY Exports

20

20

22

25

0

25

MY Exp. to EU

0

0

0

0

0

0

Industrial Dom. Cons.

0

0

0

0

0

0

Food Use Dom. Cons.

0

0

0

0

0

0

Feed Waste Dom. Cons.

1,514

1,514

1,563

1,490

0

1,570

Total Dom. Cons.

1,514

1,514

1,563

1,490

0

1,570

Ending Stocks

10

10

10

15

0

15

Total Distribution

1,544

1,544

1,595

1,530

0

1,610

1000 MT, PERCENT

General

Soybean meal demand continues to be the driving force behind Taiwan's soybean imports. Taiwan's demand for soybean meal is met by local crushing of imported soybeans and extremely limited soybean meal imports - around 25 TMT, annually. Based almost exclusively on domestic livestock production, Taiwan's annual demand for soybean meal for forecast year will resume to the level of 1,570 TMT from estimated 1,490 TMT for current year due mainly to impact of current HPAI outbreaks in commercial poultry farms.

Locally crushed soybean meal faces minor market challenges from imports of distiller's dried grain soluble (DDGS) and other oilseed or protein meals, especially during periods of high world soybean prices. In general, feed inclusion rate for these other meals combined is stable at 13.8%.

Other Protein Meals Substitute for Soybean Meal, TMT

Meal/HS Code

MY2011/12

MY2012/13

MY2013/14

HS2301.10: Meat and offal meal

56

49

59

HS2301.20: Fish meal

177

145

152

HS2302: Grain bran

(HS2302.10: corn gluten meal)

51

(10)

38

(10)

26

(12)

HS2303.30: DDGS

243

216

213

HS2305: peanut meal

6

9

8

HS2306: other oilseeds meal

184

228

244

HS2309.90: others for animal feeding

83

68

60

HS1214: alfalfa & Lucerne

216

224

219

Total supply

( Est. inclusion rate in commercial feed)

1,016

(14.8%)

977

(13.8%)

981

(13.8%)

Sources: Taiwan Customs Statistics

Note: According to industry sources, Taiwan uses minimal milk powder or whey products in feed formulation because of the high cost.

Domestic Livestock Production

The local poultry sector is competitive with imports since Taiwan liberalized its market as part of its 2002 WTO accession. Trade barriers prevent significant pork imports, including U.S. product, into the island. There are no significant poultry or pork exports, at this time.

Hog Sector, Recovery Mode

Porcine epidemic diarrhea virus (PEDv) outbreaks in Taiwan forced the culling of hundreds of thousands of piglets in spring 2014 and lower overall slaughter numbers. According to COA preliminary data, 2014 hog production, slaughtered, was 7.99 million head and target production for 2015 is set at 8.35 million head. As of November 2014, the standing hog population is 5.55 million head, a 4.5% drop from pre-PEDv status in November 2013, but showing continued recovery. Hog feed demand for current year is estimated at 3% lower from CY2013.

Despite disease setbacks, the Taiwan hog sector is very lucrative, with the supply chain highly controlled by (reportedly colluding) producers, processors, and wholesalers. Taiwan 2014 pork prices were near-record high with COA forced to monitor live actions, encourage limited inventories, and increase imports. Reportedly, a local cooking oil scandal also contributed to high domestic pork prices as demand for locally-processed lard increased (due to incorrect perceptions that imports were solely to blame). However, hog auction prices have fallen recently to below NT$65/Kg, compared to record NT$ 85/kg in March 2014.

Pork Imports, Domestic Production, and Wholesale Market Auction Prices

Year

Pork Imports, (TMT)

Domestic pork production, per 1,000 head slaughtered

Auction Price, NT$/kg

Meat [HS0203]

Offal [HS0206]

2010

44

29

8,575

$69.36

2011

44

27

8,786

$71.99

2012

24

29

8,965

$63.35

2013

30

27

8,720

$64.50

2014 (preliminary)

48

33

7,990

$78.09

2015 (estimate)

44

29

8,500

NA

2016 (forecast)

24

27

8,600

NA

Source: Council of Agriculture (COA) and Taiwan Customs Statistics

Poultry Sector, HPAI Outbreaks

Starting January 8, 2015, there have been continuing outbreaks of HPAI in Taiwan commercial poultry farms. Subtypes of HPAI H5N2, H5N3 and H5N8 strains were all detected. Waterfowl, goose and duck farms are the most impacted. As of March 16, COA's Bureau of Animal and Plant Health Inspection and Quarantine (BAPHIQ) confirmed that 873 poultry farms were infected with a total of 6.4 million birds lost. The HPAI situation seems to be slowing as the temperature becomes warmer; there have been no new outbreak reported for a couple of days.

Total Taiwan 2013 poultry production was 347 million birds, slaughtered, of which broiler 186 million, native Tugi bird 103 million, ducks 34 million and geese 5 million and 19 million made by other birds. While official 2014 numbers are unavailable as of reporting date, the HPAI impact is estimated to be a 6% decrease in total poultry production, slaughtered. According to BAPHIQ, approximately all Taiwan goose farms and goose breeder operations are infected. Taiwan authorities are worried about a short supply of goose meat and have started looking for import supply.

Poultry feed demand for current year is estimated at a 6% decrease from CY 2013, accordingly.

Poultry HPAI Incidences

Broilers

Colored Broiler

Duck

Geese

Production(slaughtered) in 1,000 bird in 2013

185,650

102,947

32,460

5,160

Birds on farm in 1,000 at end of CY2013

21,486

28,647

5,988

1,953

Number of birds infected HPAI

1,159

2,357

218

1,912

Percentage of infection per farming scale

5%

8%

4%

98%

Poultry Meat Imports, Domestic Production and Farm Prices

Year

Imports of poultry meat and products, 1,000 MT [HS0207]

Domestic poultry production, million birds slaughtered

Farm Price, NT$/kg

(Broiler)

2010

115

370

$41.85

2011

113

386

$44.04

2012

130

359

$42.99

2013

115

347

$44.70

2014 (Preliminary)

143

356

$47.80

2015 (estimate)

130

327

NA

2016 (forecast)

110

360

NA

Source: Council of Agriculture (COA) and Taiwan Customs Statistics

Total Feed Demand Estimates and Soybean Meal Consumption in Feed Rations

In line with the domestic hog and poultry situations, total feed demand for MY2014/15 and MY2015/16 are estimated at 7.0 MMT and 7.3 MMT. Soybean meal inclusion in feed are 1,490 TMT and 1,570 TMT, estimated at the same inclusion rate at 21.3%.

Taiwan Feed Production for CY2013-2016 in TMT

2013

2014 (Estimate)

2015 (Forecast)

2016 (Forecast)

Total Feed

7,288

7,100

7,020

7,375

Hog Feed

3,191

2,920

3,110

3,150

Poultry Feed

3,269

3,350

3,080

3,390

Others

828

830

830

835

Trade

In MY2013/14, Taiwan imported a total of 21 TMT of soybean meal, 14 TMT under HS-2304 and 7 TMT under HS-1208, of which only 1,000 MT were imported from the United States and others mostly from India and Brazil. Soybean meal imports for upcoming years are anticipated to remain at the current low levels.

Both of Taiwan's two main crushers have invested in de-hulling equipment to increase production of high protein de-hulled meal. In addition to conventional soybean meal, full fat soybeans and de-hulled high protein meal, with crude protein (CP) of 47% or above, remain popular. Soybean meal is traded according to CNS (Chinese National Standards), with a 43% CP national standard for soybean meal. For this reason, Taiwan crushers typically complain about lower protein content in U.S. soybeans.