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China Rumored to Impose Anti-Dumping Tariffs on Soybeans | KTIC Radio

China Rumored to Impose Anti-Dumping Tariffs on Soybeans

China Rumored to Impose Anti-Dumping Tariffs on Soybeans
Reuters Image/Stringer

Bloomberg reported over the weekend that China “could be on the brink of imposing measures to protect its soybean industry.” The concerns arose following remarks by a leading figure in the country’s agricultural ministry.

The main development was that Ni Hongxing, head of the Agricultural Trade Promotion Center at the Ministry of Agriculture, said it may be necessary to introduce antidumping tariffs and other measures to curb imports and protect domestic production. The statement was reported by the country’s state-run Xinhua news agency late last week.

The U.S. soybean industry is highly export focused and China is a huge market, so the reports of major policy changes there are having an unsettling effect across the sector. Since 2005, Chinese soy imports have more than tripled and now account for more than 60 percent of the global total. In addition, the United States is the second largest soy exporter, behind Brazil with Illinois and Iowa the main producing states, Bloomberg says.

According to Erlend Ek of the advisory firm China Policy, Chinese soybean farmers have suffered in recent years due to poor domestic support. New policies aimed to correct these problems are being planned, but have yet to take shape. As a result EK thinks China may feel it necessary to introduce “some short term protection to the domestic sector,” he told Bloomberg “although it would likely resist doing so.”

The Ministry’s Ni has long talked about a need to protect China’s agricultural industries, both to ensure food security and to alleviate poverty, which is most pronounced in China’s rural areas. In addition to antidumping tariffs, he wrote recently, China might attempt to stimulate domestic production by increasing compensation for farmers.

He also suggested that imports of genetically modified soybeans should be strictly supervised in packing, transport, processing and labeling. Such measures could mean problems for U.S. exporters since, according to Ek, “imports are mainly genetically modified soy while domestic products are not.”

While there is considerable discussion just now of possible future Chinese policies, there also are suggestions that the government has other goals in mind than protectionism. Previous statements from the Ministry of Agriculture have envisioned a complimentary system, Ni added.

“Rather than aiming for self-sufficiency or forcing imports out of the market, the Ministry of Agriculture’s ‘guiding opinions’ on soybean production laid out in April called for developing complementary niches for domestic and foreign soybeans,” Ni told the press.

“Imported soybeans are to fill the lack of feed protein and edible plant oil, while domestic soy beans will be processed into tofu, soy milk and other classic foodstuff,” Ek said. To meet demand, the recent document called for a 40 million mu [one square meter is equal to 0.0015 mu] increase in soybean areas by 2020.”

In the meantime, Ek thinks that China is likely to support “rotation policies and new policies towards domestic genetically modified crops” as well as efforts to find dedicated production sources overseas. “Looking ahead, I think Chinese companies will seek to invest in soy production globally to serve domestic demand,” he said.


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