May 15, 2020


China allocates more grain import quotas to boost purchases



In a bid to step up US farm purchases and comply with global trade rules, China is allotting more low-tariff import quotas for corn this year and may expand its use of wheat quotas, three sources reported to Reuters.


China has a 95% self-sufficiency target for its rice, corn and wheat consumption, but allows a certain volume of imports through a tariff rate quota (TRQ) system.


The quotas allow importers to buy specified volumes with duties as low as 1%, compared with 65% without the quotas.


However the opaque system has been widely criticised by grain exporters who say Beijing does not issue the promised volume of quota, limiting purchases from overseas.


As part of a Phase 1 trade deal with the US in January, China pledged to allow for the full use of its TRQs and it has issued more than six million tonnes of low-tariff corn quotas in 2020 so far, said two sources familiar with the matter.


The sources did not want to be identified due to the sensitivity of the matter.


That includes 1.5 million tonnes of quota issued in the last month, in addition to the batch issued at the start of the year when most quota is normally allocated.


Beijing may issue a total of 7.2 million tonnes of corn quotas, added one of the sources, briefed on the government plan, which would be the first time it has fully allocated its corn quota.


China's state planner, the National Development and Reform Commission, did not immediately respond to a fax seeking comment out of office hours.