December 26, 2018

China removes tariffs on alternative feed that will replace soy
 

China's import taxes on alternative meals used in animal feed will be removed in 2019 - a move that is part of efforts to secure raw material as trade tensions between the country and the US show little signs of abating, Reuters reported.

The decision also affects a range of other goods as China plans to remove import and export tariffs next year in order to stimulate the export of cargoes.

From January 1, 2019, import tariffs on alternative meals including rapeseed meal, cotton meal, sunflower meal and palm meal, will be abrogated, said the Chinese Finance Ministry on December 24.

While China has resumed some purchases of US soybeans in the midst of unresolved trade disputes with Washington, tariffs on US oilseed are still in place. According to analysts, China can help improve the reliability of feed meal supply in the country by taking away tariffs on alternative meals. 

"This is basically getting ready for a rainy day, as commercial purchases of US soybeans haven't kicked off and so far it's been just the state-owned firms that have done the buying," said Monica Tu, an analyst with Shanghai JC Intelligence Co. Ltd.

"Though the volume of alternative meal imports is not that huge, they can substitute soy. [The tax removal] is basically offering end users more options," Tu said.

China's trade war with the US this year has significantly disrupted the global soy market. The former suspended much of its import of US soybeans, as both nations engages in tit-for-tat responses involving tariffs imposed on each other.

The US is the second-biggest soybean supplier to China and that component of the trade between the countries was worth $12 billion in 2017.

- Reuters