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China keeps 2014 import quotas for grains, cotton at this year’s levels
The wheat import quotas are capped at 9.6 million tons, corn at 7.2 million tons, rice at 5.3 million tons and cotton at 894,00 tons.
China is keen to protect its farmers and levies high import duties on agricultural products, effectively limiting imports of staple grains. However under its WTO commitments it is obliged to allow for a certain amount of imports with lower duties.
The low-tariff rate is 1 percent while grains imported without the quota allocation would be charged a 65 percent import duty.
Beijing typically allocates a larger share of the grain quotas to state-owned companies, a policy which has seen private feed mills seeking alternatives to corn in recent weeks after they ran out of import quotas for this year.
Corn imports may reach the full quota level this year, according to a forecast by the U.S Department of Agriculture, as Chinese importers take advantage of the wide price gap between overseas and domestic markets.
Domestic corn prices have rallied on stockpiling by Beijing, which has pushed Chinese corn prices nearly 20 percent higher than new U.S. corn.
China’s wheat imports could also reach full quota levels, according to some analysts.
It has already imported more than 6 million tons of wheat this year after bad weather damaged domestic crops, said an official think-tank this month. (Reuters)
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