China sets 2021 low tariff import quotas

06 October 20203 min reading

China announced the 2021 low Tariff Rate Quotas (TRQ) for wheat, maize and rice on 17 September 2020. The TRQ was set at 9.6 million tonnes for wheat, of which 90 percent allocated to state-owned firms, at 7.2 million tonnes for maize, of which 60 percent to the state firms, and 5.3 million tonnes for rice, of which 50 percent to the state-owned firms. These volumes are at the same level as in the past years. The government generally charges high import duties on agricultural products to protect farmers from cheaper imports. However, under its WTO commitments, it allows a certain amount of imports at lower duties. Under the TRQ system, import duties on wheat, maize and rice are at 1 percent, while outside the quotas, imports are subject to a 65 percent duty.

CHINA HALTS IMPORTS OF AUSTRALIAN BARLEY China suspended barley imports from CBH Grain Pty. Ltd., Australia’s largest grain-exporting company, saying the grain was contaminated. Chinese authorities have told Australia “to improve its plant export quarantine supervision system,” the customs agency said. But the delay in China’s response to a sanitary issue adds weight to suspicions that CBH has become collateral damage in a political dispute over Australia’s call for an independent inquiry into the coronavirus pandemic. In the latest sign of souring relations between the two countries, China's General Administration of Customs has also issued a notice saying it will apply "enhanced inspection" efforts on shipments of Australian wheat. It comes at a delicate time for wheat growers, who are believed to have forward-sold more than a dozen shipments to China for December and January worth almost $250 million. In May, Australia's barley trade with China — once worth $1.6 billion a year — was all but destroyed after Beijing imposed crippling 80 per cent tariffs. Nick Carracher, chief executive of Geelong-based market analyst Lachstock Consulting, said the decision by China was worrying given the value and volume of wheat already sold. He said the move appeared to be political given China's need for feed grain and the dwindling nature of its own reserves. It also had echoes of Beijing's decision to reject barley shipments sent by giant WA grain handler CBH on grounds the vessels were contaminated with "pests", he added. "It's obviously going to be a huge concern to those people who have forward business in China, the implications for the vessels that haven't unloaded yet. "But one thing that is very clear is that China has this increased willingness to scrutineer the vessels that are coming in. "It's definitely a very nervous time for the guys that have got forward business on." According to Mr Carracher, while the Australian wheat trade with China had been smaller than exports of barley in recent years, activity had been picking up ahead of this year's harvest. Despite minimal flows last year in the face of severe drought in the eastern States, exports amounted to about $300 million in 2017-18 and almost $500 million in 2016-17.

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