Ministry of Economy Increases Cooking Oil Production to Stabilize Market Supply

China Alliance Oil has suspended operations for mechanical maintenance, resulting in a shortage of salad oil supply in the domestic market. The Ministry of Economic Affairs announced today that it has coordinated with the three major refining plants—Dantongyi, Changhui, and Formosa Sugar and Chemical Corporation—to increase monthly salad oil production by 4,400 tons starting immediately to stabilize market supply. Furthermore, Formosa Sugar and Chemical Corporation will add an additional 700 tons of salad oil to its monthly output beginning in December. By accelerating the procurement of crude oil and expanding refining capacity, the company aims to bridge the supply gap caused by the suspension. This initiative not only alleviates immediate supply pressures but also provides a more stable source of raw materials for consumers and food service operators.

The primary reason for the suspension at China Alliance Oil is the conduct of mechanical maintenance and upgrades, a long-standing necessity to ensure refining quality and safety. However, the supply gap created during the downtime quickly transmitted to the retail market, driving up salad oil prices. According to statistics from the Taiwan Oil Industry Association, salad oil prices rose by an average of approximately 8% to 10% before and after the suspension, imposing a noticeable burden on the costs for food service operators and household cooking. The Ministry of Economic Affairs intervened to coordinate production with the aim of mobilizing capacity in the short term to prevent further escalation of market volatility.

The plan to increase production by 4,400 tons encompasses the capacities of the three major refining plants. Dantongyi and Changhui, leveraging their mature refining technologies and sufficient storage capacities, are able to boost output in the short term. Formosa Sugar and Chemical Corporation, benefiting from its dual advantages in the sugar and oil industries in Taiwan, possesses a more flexible mechanism for adjusting production capacity. The Ministry of Economic Affairs stated that the three plants have established specific production schedules and quality standards in the agreement to ensure that the increased production does not compromise product quality and safety.

Formosa Sugar and Chemical Corporation’s decision to add 700 tons of monthly salad oil supply starting in December is driven primarily by two measures: first, accelerating the procurement of crude oil from abroad to utilize relatively lower import costs in the international market, thereby reducing raw material costs; and second, expanding its refining capacity, particularly by increasing the processing proportion of high-melting-point oils. The company’s capacity expansion plan, which included partial facility upgrades completed last year, is expected to reach 1.5 times its annual production volume by the end of this year. This strategy not only addresses the short-term gap left by China Alliance Oil’s suspension but also enhances Formosa Sugar and Chemical Corporation’s competitiveness in the domestic oil market.

From a long-term perspective, the Ministry of Economic Affairs’ coordination efforts demonstrate the government’s proactive intervention in the fields of energy and food security. As a nation with a high degree of import dependency, any disruption in the supply chain can trigger cascading effects on the domestic market. By coordinating production capacity, accelerating imports, and expanding local processing, the government can reduce sensitivity to international market price fluctuations to a certain extent. This approach also aligns with the government’s dual policy objectives of "energy security" and "food security," further consolidating public confidence in daily necessities.

In summary, while the suspension at China Alliance Oil has created short-term supply pressure, the coordinated actions between the Ministry of Economic Affairs and the three major refining plants have mobilized an additional 4,400 tons of production in a short period, with plans to add another 700 tons starting in December. These measures not only alleviate immediate market demand but also provide a solid foundation for the long-term stability and development of Taiwan’s oil industry. As capacity expansion and import strategies are implemented, market prices are expected to gradually decline, allowing consumers and food service operators to operate in a more stable environment. (Source: Central News Agency)