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China Holds Grain Import Quotas Steady
Thursday, December 18, 2014 3:52PM CST

By Lin Tan
DTN China Correspondent

BEIJING (DTN) -- Chinese grain companies are currently applying for the import quota for 2015, and while the quota level remains the same as last year, actual imports may not meet the quota.

"The import quota did not change for more than 10 years in China, but the requirement for companies to make application is changing. Small companies may not be qualified for the import quota," said Wenge Fu, a professor at China Agricultural University.

According to China National Development and Reform Committee (NDRC), the country will allocate its grain import quota according to regulations in place since 2003. Grains such as wheat, corn and rice are under the control of the quota system, while other crops, like soybeans and sorghum, have no quota restrictions.

The wheat quota will be set at 9.64 million metric tons (354.2 million bushels), 90% of which will be allotted to state-owned companies.

Sixty percent of the corn quota, at 7.2 mmt (283.4 mb), will be given to state-owned companies. And on rice, 50% of the 5.32 mmt quota will go to state-owned companies.

"Though there is some portion of the quota open to private importers, it could also be given to state-owned companies as the allocation of this portion is flexible," Fu said.

While the import quotas haven't changed in a decade, China announced new application rules. "The regulations used to require wheat mills to have a daily capacity of 500 (metric) tons, but now require a company to have processed 100,000 (metric) tons of wheat in 2013 or 2014," Fu said. "This means the importer needs a historical production record, not only a processing capacity." Newly established processors could not apply for the quota.

The Chinese government will still have a strong impact on corn imports since only 40% of the import quota can be allocated to private importers. Fu said the recent unofficial announcements of China's approval of corn with the MIR 162 trait for import will make trade with the U.S. easier, "But we do not expect China to import a huge amount of corn in the following year because of the historically high government storage pileup in China."

China has rejected more than 1.25 mmt of U.S. corn cargoes since last year because the shipments contained MIR 162. According to statistics, the country imported 1.73 mmt of corn from the U.S. before the trait issue arose in November in 2014.

"The government is worried about corn imports because it may impact its policy of food self-sufficiency," Fu said. Some officials were worried that China will become the world's largest corn importer, following the soybean market. But he said the quota program will be one of the key tools the Chinese government uses to keep that from happening.


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