October 1, 2013

In 2014, China will issue low-tariff import quotas for key grains and cotton at the same level as it allocated this year, keeping a lid on imports of lower-priced overseas imports.

This is according to the National Development and Reform Commission (NDRC) on Friday (Sep 27).

The wheat import quotas are capped at 9.6 million tonnes, corn at 7.2 million tonnes, rice at 5.3 million tonnes and cotton at 894,000 tonnes.

The low-tariff rate is 1% while grains imported without the quota allocation would be charged a 65% 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.

According to a USDA forecast, corn imports may reach the full quota level this year, 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% higher than new US corn.

Some analysts say that China's wheat imports could also reach full quota levels, as it has already imported more than six million tonnes of wheat this year after bad weather damaged domestic crops.