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Taipei, (CENS)--Seeing the drastic volatility in bulk commodity prices worldwide, domestic fodder suppliers are jointly procuring corn from China so as to cut purchasing cost.

Domestic farms and fodder suppliers recently procured approximately 500,000 metric tons of corns, about one-tenth of the nation`s overall annual import of such agricultural product. China-grown corn will likely start to be shipped to Taiwan from the beginning of July, which will ease strain on domestic fodder suppliers.

The procurement partnership includes listed leading fodder suppliers as Greatwall Enterprise Corp., Uni-President Enterprises Corp., Taisun Enterprise Co., and Fwusow Industry Co.

An industry insider said domestic fodder suppliers currently spend NT$11 to buy a kilogram of corn, despite selling the same between NT$9.4 and NT$9.5 per kilogram, which has put them in the red.

With the China-exported corn and the coming of peak selling season, domestic fodder suppliers will see product prices stabilize to enable breaking even from the third quarter of this year.

A survey by FoodChina.com shows that corn shipped from North America is set at US$330 and US$360 per metric ton, while China-grown corn is between US$10 and US$15 less. Including shipment costs, domestic fodder suppliers can cut costs by between 5% and 10% per kilogram to buy corn from China than North America. FoodChina.com is a B2B (business to business) e-marketplace and professional service provider based in Greater China aiming to serve the agribusiness community.

The Taiwan Feed Industry Association says the joint procurement launched by domestic fodder suppliers is effective monthly from the beginning of July till the end of this year, with such partnership to help wean domestic suppliers from relying on North American growers.

Taiwan`s demand for corn reaches five million metric tons per year; while China exports about eight million to 10 million metric tons or corn per year. In the wake of reported food shortages internationally, China has banned exports of agricultural products, except Hong Kong, Macao and Taiwan.
(by Ben Shen)