Sun, Feb 27, 2022 page2

• Supplies, prices stable amid war

  DIVERSIFIED SOURCES: Wheat, corn and soybean orders are being ramped up as the government said the nation has large reserves of oil and semiconductor components

  • Staff writer, with CNA
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  The Executive Yuan yesterday said it has drafted measures to stabilize supplies of critical material as well as product prices amid escalating geopolitical tensions after Russia launched a full-scale invasion of Ukraine.

  In a statement, the Cabinet said that President Tsai Ing-wen (蔡英文) has instructed the executive branch to assess economic variables resulting from Russia’s attack on Ukraine and ensure that effective responsive measures are in place so that Taiwan can maintain raw material supplies, price stability and a stable financial market.

  The Executive Yuan said that Premier Su Tseng-chang (蘇貞昌) has asked Vice Premier Shen Jong-chin (沈榮津) to discuss the invasion’s possible economic domino effects with relevant agencies administered by the Cabinet.

  

  The Executive Yuan building in Taipei is pictured in an undated photograph.

  Photo: CNA

  Shen has instructed agencies to conduct inventories of the nation’s critical industrial materials, and assess the resilience of domestic financial markets, the Executive Yuan said, adding that the government plans to diversify its sources of oil to avoid supply disruptions.

  As crude oil prices rise sharply, the Executive Yuan said that it plans to continue a mechanism to mitigate any increase in domestic prices and ensure consumer price stability.

  State-owned oil supplier CPC Corp, Taiwan, already has a diversified order of crude purchases and a 145-day inventory of crude oil, the Cabinet said.

  CPC is to discontinue purchases of liquefied natural gas from Russia after its agreement expires in March, with reliable supplies being sourced elsewhere, the Executive Yuan said.

  The government is prioritizing orders for soybeans, wheat and corn, and lower import tariffs and business taxes to stabilize the local commodity market, it added.

  Taiwanese importers did not buy soybeans and wheat from Russia or Ukraine last year, but Taiwan has 1 million tonnes of soybeans and 540,000 tonnes of wheat, enough for five months of consumption in the local market, it said.

  Taiwan last year did not buy corn from Russia, and bought only a small amount from Ukraine, it added.

  The Cabinet said that Ukraine is not a major steel supplier to Taiwan, but the government has promised to help China Steel Corp, the largest steelmaker in Taiwan, rein in price spikes if the war pushes up prices globally.

  Russia and Ukraine are also not major suppliers of palladium, a critical ingredient in semiconductor production, the Executive Yuan said.

  Taiwan is well stocked with neon and hexafluorobutadiene, which are also used in making semiconductors, and come from a diverse range of suppliers, the Executive Yuan said.

  The invasion has prompted many foreign investors to move their funds into US dollar-denominated assets, which pushed up the greenback’s value, it said, adding that the Taiwan dollar remains stable against other currencies such as the euro.

  The central bank is closely watching fund flows in the foreign exchange market, and is to introduce policies to avoid volatility in the local currency if necessary, it said.

  The TAIEX, the weighted index on the Taiwan Stock market, encountered headwinds on Thursday, dropping 2.55 percent in the wake of the Ukraine invasion. However, the index staged a rebound the following session, rising 0.33 percent.

  The commission that supervises the National Stabilization Fund is likely to convene a meeting to stabilize share prices if the geopolitical crisis continues to adversely affect the market, it said.

  The government set up the NT$500 billion (US$17.84 billion) stabilization fund in 2000 to serve as a buffer against unexpected external factors that might disrupt the local bourse.
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