A Dilemma for Lettuce Buyers in Taiwan

Published 2021년 4월 22일

Domestic lettuce growing season is nearing its end in Taiwan, and local buyers are looking for import sources starting from mid-May. However, local buyers are encountering a dilemma as vessel congestion in the USA, the largest exporter of lettuce to Taiwan, poses unprecedented challenges for the Taiwanese buyers in importing the vegetable.

Key Exporter of Lettuce at an Impasse

The United States has long been a key exporter of lettuce in the Taiwanese market, consistently accounting for more than 90% of both the imported volume and the imported value over the last two decades. US lettuce is popular among local buyers for its competitive prices and capacity to adequately meet Taiwanese demand.

However, recent port congestions have raised severe logistical concerns for local lettuce buyers in Taiwan. Currently, it takes roughly 21 days to deliver the vegetable, an additional seven-day more compared to the usual transit time. Considering the shelf life of lettuce which is 2-3 weeks, this puts the quality of the products at risk of deteriorating during the transportation process.

With domestic lettuce supplies expected to last until mid-May, local buyers are looking for other sources to avoid the risk of delay and potential shortage.

A Closer Look at the Taiwanese Lettuce Market

Lettuce is a cool-season crop and is only produced from October to April in Taiwan due to hot and humid temperatures during the summer months. When the cool-season ends, the local market relies solely on lettuce imported from other countries to meet domestic consumer demand. 99% of the total import value in 2020 occurred during June to October when domestic lettuce supplies were depleted by the end of May.

Lettuce is one of the most popularly consumed vegetables consumed in Taiwan. Imports have gradually increased year on year over the last decade. Taiwan imported a total value of 14.3 million USD in 2020 at a CAGR of 5.8% over the previous five years. According to a recent study, consumers in Taiwan prefer imported lettuce to local ones for its sweeter tastes and hard fibers that give a better texture. One store manager at the Carrefour-Ilan branch in Taiwan remarked on the potential opportunities for imported lettuce in the market for significant differences in quality between imported and domestic lettuce.

What is noteworthy is the price trend of lettuce during the import season in the Taiwanese market. The manager of a local supermarket store, RT-Mart, noted that imported lettuce doesn’t have any price competition with the locals during the import season but consumers have no other choice but to accept the vegetables offered by the supermarket, as the decision of import products is held by suppliers. Indeed, the supply chain for imported lettuce in Taiwan is a fairly direct process without many intermediaries involved, which increases the bargaining power of suppliers.

Source: Taiwan Agricultural Research Institute

Consequently, prices tended to increase during the import season in the past, depending on the price of lettuce imports, and decrease when the domestic lettuce harvest season resumed.

Source: Tridge

Potential Alternative to US Lettuce

As local buyers are looking to diversify their sources for lettuce, South Korea's lettuce stands out as a potential alternative to those of the US. South Korea is the second-largest exporter of lettuce in Taiwan, with a consistent trade history record since 2013. Korean imports have been gradually increasing in the Taiwanese market for their quality despite its high prices. Moreover, the relatively short shipping distance between the two countries allows Korean lettuce to be transported to Taiwan in just 5 to 6 days. A fast transit enables suppliers to provide customers with fresh quality, which, according to research, is a key factor in consumer purchasing decisions.

One drawback to importing Korean lettuce, however, is its price; the prices of Korean lettuce are significantly higher than those of the US, due to high demand coming from the domestic Korean market, which may discourage local buyers in their importing decisions, depending on how elastic of demand in the local market is.

Market Outlook

Taiwan's lettuce importers are planning their decisions conservatively at the moment. They are looking to place an order only when they have firm requests from the local buyers instead of placing import orders in advance to secure supply as they did previously.

For the moment, domestic lettuce supplies are expected to suffice until mid to end of May. Therefore, importing decisions will likely take place in early to mid-May, depending on the prices in the international market as well as how the port congestion in the United States unfolds.