SHANGHAI - China has issued the bulk of low-duty import quotas on agricultural imports for its freshman year in the WTO, but some issues need to be sorted out before it sees quick arrivals of foreign farm produce, traders said. Bioengineered farm products like soyoil and corn will find it difficult to enter China without temporary safety permits, while private importers, allocated with paltry quotas of other crops like wheat, have to grapple with logistic problems, they said.
"Some people are still waiting to receive their quotas, while others still need to wait for safety certificates to import farm products like corn and soyoil," said a trader with a global trading firm.
Although most private firms and joint ventures have received the quotas, China's Ministry of Agriculture requires foreign suppliers to obtain permits to import genetically modified organisms (GMO) according to rules that took effect on March 20.
No firm has received a certificate yet, but some traders said they hoped China would start handing these out as early as this week, paving the way for Chinese importers to exercise quotas.
China has given private firms long-awaited tariff-rate-quotas (TRQs) for farm products, opening its doors to millions of tonnes of foreign imports at low duties, traders said.
Private firms were given wheat TRQs of 846,000 tonnes, or 10 percent of the total, and corn TRQs of 1.87 million tonnes, or 32 percent of the total. The rest of the low-duty quotas will be given to state-owned firms.
Some traders said Jilin Grain Group, one of China's authorised corn exporters, was given 60,000 tonnes. Group officials were not available for comment.
SOYOIL YIELDS GOOD PROFITS
In the edible oil market, China dished out private quotas totalling 1.66 million tonnes of soyoil - or 66 percent of the full soyoil TRQs. For rapeseed oil, 66 percent of the full amount, or 580,000 tonnes, was given out.
"We have been informed by many firms that they have already received soyoil import quotas, and there are already a lot of arrivals at bonded zones," said an industrial official, though he was unaware of the exact amount.
Traders are eager to import soyoil because of lucrative margins, but they need to receive safety certificates to ship the oil if it is crushed from bioengineered beans.
South American soyoil was quoted this week at about $365 a tonne C&F, yielding a profit margin of about 500 yuan ($60.41) per tonne when sold in China at a higher domestic price.
Logistics problems loom for private importers that were allocated small quotas but have to fill up sizeable cargoes.
For wheat, hundreds of private firms share the 846,000 tonnes in quotas, meaning some firms would only get a few thousand tonnes each, traders said.
"Grain imports will face slightly more problems than edible oils because they are usually shipped in bigger cargoes like Panamax," said a trader with a global trading firm in Shanghai. "Edible oils can come in smaller Handymax shipments."
A Panamax cargo can carry 50,000 to 55,000 tonnes, while a Handymax cargo takes less than 30,000 tonnes.
"Since there are so many applicants, each firm is only given a small amount and it will be difficult to organise a Panamax shipment," the trader in Shanghai said.:
