Meeting the Demand for Organics

Current regulations have the effect of discouraging imports.

Taiwan last year imported US$27.6 million worth of organic foods and beverages, making it one of the largest markets in that category in the region.

Despite what is considered to be strong market potential, however, import growth is expected to slow in the years ahead due to a number of stringent regulatory requirements in Taiwan. As a result, the Washington, D.C.-based Organic Trade Association forecasts that other Asia Pacific countries as China, Japan, India, and South Korea will all surpass Taiwan in the total value of sales of organic packaged foods and beverages over the next few years. 

The biggest obstacle to developing the market has been Taiwan’s procedures governing the amount of allowable pesticide on products labeled as organic. The Council of Agriculture (CoA) has responsibility for deciding what pesticides are approved for use in Taiwan and determining which products can be called organic.  It maintains a strict zero tolerance for pesticides determined safe for conventional use, but which are not registered separately for use on organics.

Observers have criticized the process for not adhering to the practice in most other major markets, such as the United States or the European Union.  For example, the U.S. default for organic foods and beverages is automatically set at 5% of the MRL for conventional products – a standard that recognizes that crops not treated directly with pesticides may pick up trace amounts of chemicals due to environmental drift. 

Caleb Chuang, regulatory affairs manager at Costco Wholesale, cites difficulty in importing organic oils in recent years due to these regulations. “In the past three years, organic oils like olive oil have been very limited for import because of the minute traces of chemicals that were found in oils deemed organic elsewhere,” he says. The oils met the criteria set by the exporting countries but could not meet Taiwan’s strict near zero-tolerance on organics.

A further complication is that a new application is required each time the product is imported, cutting into the already short shelf life for organic products. “It means there is very little time for the product to be sold,” Chuang says. He notes that this time constraint is particularly problematic for imported organic raw materials for other organic products.

An additional new development is Taiwan’s Organic Agriculture Promotion Act, which took effect on May 30 this year and is expected to have wide implications for international trade. For other countries to be allowed to export organic products to Taiwan, the act requires that they must either have signed a bilateral agreement with Taiwan that recognizes Taiwan’s organic produce for import into their own market, or else certify their products to Taiwanese standards. The 22 countries currently allowed to sell organic produce to Taiwan were given a one-year grace period to meet the new requirements.

The American Institute in Taiwan (AIT) is actively engaging Taiwan on organic equivalency. Mark Petry, chief of the Agricultural Section at AIT, noted that “we understand the value of Taiwan as an important market for U.S. organic producers and continue to engage with Taiwan authorities ahead of the May 2020 deadline so as to prevent undue trade disruption.”

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