The private sector previously was allotted 205,000 tonnes in annual imports, but 98 percent of that will be given to state-run Taiwan Sugar Corp (Taisugar) to ensure sufficient supplies, said Tsai Shu-chuan, a director at the economics ministry.
The private sector share will fall to 4,100 tonnes, or the remaining two-percent, she said. "We hope to fully liberalise the market as soon as possible. But for now, the quota system will remain in place," Tsai said. Faced with that sharp cutback, industry officials have begun pushing for a liberalisation plan that would open the market to unlimited imports by both private companies and Taisugar, a position the economics ministry also favours.
"We plan to hand our plan to the cabinet for approval, but as implementation requires legislative approval, there is no way to estimate when it may happen," Tsai said. "The sooner the better."
Taiwan consumes roughly 600,000 tonnes of sugar per year, of which Taisugar imports 320,000 tonnes and another 60,000-70,000 tonnes are produced locally by Taisugar. Taiwan imported 519,538 tonnes of sugar in the year through October, a 25.3 percent increase over the same period in 2003. The bulk of the sugar came from Thailand, followed by Australia, according to government data. Sugar supply was choked this year as private importers failed either to bring in the sugar or, as government officials contend, they failed to sell their full allotment. Taisugar effectively had to supply 100 percent of the market with only two-thirds of the amount, leading it to import an additional 50,000 tonnes to ease the shortage.
Taiwan had planned to scrap the import quotas at the beginning of this year, but the reform required the passage of legislation that was held up by lawmakers eager to protect farmers and employees of Taisugar, say industry executives.
"Without free imports and as the current amount permitted under the quota system is just even with demand, if there is a shortage the price increases, adding to costs," said Simon Hung, spokesman for UI-President Enterprises Corp, the island's largest sugar user. "If the market is opened, then this problem would be reduced," he said.