Taiwan’s beef imports in the first half of 2014 set a record pace despite very high beef prices, according to just-released preliminary import data. Record-high U.S. prices took a toll on frozen beef shipments of traditional Asian beef items to Taiwan, such as boneless short ribs. However, the volume of chilled U.S. beef imports still increased 16 percent from a year ago as demand expanded beyond traditional retail and five-star hotel channels.
“Despite a slight loss in U.S. market share during the past six months due to aggressive Australian supply availability and pricing, we are encouraged by the direction of the market and the success we have had with chilled beef,” said Davis Wu, USMEF-Taiwan director.
Imported beef from New Zealand also gained an advantage this year due to reduced tariffs under a new free trade agreement with Taiwan.
Taiwan’s total first-half beef imports reached 53,623 metric tons (mt), a year-over-year increase of 9.7 percent. Import value also increased by nearly 10 percent to $357 million.
According to government statistics, Taiwan’s consumer expenditures on food reached a five-year high in June, with double-digit increases reported for meat products. The Taiwanese economy is pegged to grow more than 3 percent this year, about a full percentage point more than in 2013. Firm consumer spending is encouraging investment in higher-end foodservice concepts, which anecdotal evidence suggests are enjoying good consumer response. Taiwan beef noodle chain Mercuries and Associates has launched a premium traditional beef noodle shop concept featuring U.S. ribeye, rather than the traditional rib finger or shin shank, and pricing the dish at $16 – significantly above the standard Taiwan beef noodle bowl price of $6-$7. Attractive consumer fundamentals are also encouraging outside investment in the market. Japanese beef bowl giant Sukiya opened its first outlet in Taiwan earlier this month.
While the market is solid, importers and end-users are hoping for U.S. beef price relief while also exploring new beef item options. In early June, USMEF held seminars on new U.S. beef cuts in Taipei and Taizhong, and there has already been movement by importers and distributors to explore several items introduced at these events.
“While market conditions are decent for the most part, buyers continue to seek value,” said Alex Sun, USMEF-Taiwan marketing manager. “Retailers and foodservice operators are under constant pressure to hold down price increases.”
While introducing new cuts to price-sensitive, large-volume foodservice chains, USMEF continues to provide momentum for U.S. chilled beef sales. In mid-August, USMEF will hold a seminar with major U.S. packers and exporters and Taiwanese importers, focused on U.S. beef branding opportunities.
On the pork side, first-half imports (including both muscle cuts and variety meat) increased 36 percent year-over-year, due in part to domestic herds being reduced by porcine epidemic diarrhea virus (PEDV). Import volume reached 41,586 mt (23,516 mt for pork, 18,070 mt for variety meat), the fastest import pace in 10 years. Import activity was slow in the first quarter despite tight supplies, but has recently surged – setting a monthly record in May with imports of nearly 13,000 mt. This record import pace has been largely driven by increased shipments from European countries, especially the Netherlands and Denmark. From 2009 through 2013, EU suppliers accounted for only 14 percent of Taiwan’s pork imports. But during the first half of this year, EU market share reached 40 percent. (This is also due in part to Russia’s suspension of pork imports from the EU, which is now in its sixth month. With Russia historically the EU’s largest export destination, EU exports have increased significantly to most Asian markets during the suspension.)
Despite larger imports, Taiwan’s pork prices have soared this summer. On July 5, a new record high was established of NT 84.73/kg (about $128/cwt, live). Prices have since settled near the NT 80/kg level ($121/cwt). On July 6, Taiwan’s Council of Agriculture (COA) issued instructions for the release of approximately 2,100 mt of frozen pork imported earlier this spring under a government import procurement program. COA claimed in late June that there were inventories of 11,000 mt of imported product, and such stocks would help keep prices stable in the July-September quarter. But this assessment has proven to be overly optimistic.
“Pork demand will pick up in advance of the mid-August Ghost Festival,” Wu explained. “Through the festival dates, prices will likely stay on the high side.”
According to the latest reports, PEDV has killed more than 380,000 piglets in Taiwan, representing an estimated 6.3 percent of Taiwan’s total live swine inventory. In June, Taiwan’s domestic hog slaughter was down 15 percent from a year ago while carcass weights increased 5 percent. Similar to the U.S., producers clearly took advantage of strong prices (up 25 percent year-over-year) and more affordable feed.
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