Sorghum, barley and other imports must be licensed, intent to strengthen regulation is obvious

Starting from September 1, imports of four categories of goods - barley, sorghum, cassava and corn distillers' grains - will require an additional procedure——obtaining an automatic import license.

On August 6, the Ministry of Commerce and the General Administration of Customs issued Joint Announcement No. 34 of 2015, deciding to include barley, sorghum, cassava and corn distillers' grains under automatic import licensing administration, effective from September 1.

Industry insiders and experts said that placing the above four categories of commodities under automatic import licensing administration is intended to effectively monitor these categories of commodities, and the intent of relevant departments to strengthen regulation of related agricultural trade is obvious.

⟦NL> Additional procedures for imports

According to the joint announcement issued by the Ministry of Commerce and the General Administration of Customs, the four categories of commodities - barley, sorghum, cassava and corn distillers' grains - were included in the catalog of goods under automatic import licensing administration starting from September, meaning that imports of these four categories of products must obtain an automatic import license.

With reference to the "2015 Catalog of Goods under Automatic Import Licensing Administration" issued by the Ministry of Commerce and the General Administration of Customs, other agricultural by-products such as vegetable oil, soybeans, edible sugar and rapeseed are also included.

The so-called automatic import license refers to the licensing document granting permission to import, issued in accordance with the law by the licensing authority authorized by the Ministry of Commerce for goods under automatic import licensing administration. Article 11 of the "Measures for the Administration of Automatic Import Licensing of Goods," implemented from January 1, 2005, clearly stipulates that where the consignee meets the requirements of relevant national laws and regulations on engaging in automatic import licensed goods, it may apply for and obtain an "Automatic Import License."

According to relevant provisions, the administration of goods under automatic import licensing and the issuance of relevant documents are the responsibility of the Ministry of Commerce and its subordinate competent departments and agencies.

Before being included in the catalog of goods under automatic import licensing administration, imports of the four categories of commodities - barley, sorghum, cassava and corn distillers' grains - only required an inbound goods notice in terms of regulatory documents.

“Before importing, an inbound goods customs clearance form approved and issued by the inspection and quarantine department is required. You must first obtain the customs clearance form before you can go to customs to complete the customs declaration procedures.” a customs officer who declined to be named explained to the reporter.

Starting from September 1, in addition to the inbound goods notice, imports of these four categories of commodities must first apply to the commerce department for an automatic import license before customs declaration procedures can be completed at customs.

“Simply put, for these four categories of commodities in the import process, a regulatory department has been added.” the above-mentioned customs source said, “As long as the issuance of automatic import licenses is stopped, these four categories of commodities cannot be imported.”

According to Article 15 of the "Measures for the Administration of Automatic Import Licensing of Goods," where the state adopts temporary import prohibition or import quantity restriction measures for goods under automatic import licensing administration, the issuance of automatic import licenses shall cease from the date the temporary measures take effect.

During interviews, several industry insiders also told the reporter that due to the added automatic import license procedure, relevant departments have in effect strengthened supervision over related imports. Although no clear next-step measures have been introduced at present, the attitude of strengthening control is very clear.

Imports of four categories of commodities surge

Regarding the introduction of the new import management policy, relevant industry insiders said they were not surprised.

Behind the introduction of the new policy and the strengthening of control is the large volume of imports of barley, sorghum, cassava and corn distillers' grains over the past one to two years.

In 2014, imports of barley and sorghum expanded severalfold, leading to an increase in total grain imports. According to statistics, sorghum imports last year reached 5.776 million tonnes, a year-on-year increase of 4.4 times. According to forecasts by relevant analysis institutions, China may import more than 10 million tonnes of sorghum in 2015. Customs data for 2015 show that in May this year, China imported more than 1 million tonnes of sorghum. In 2014, barley imports were about 5.41 million tonnes, a year-on-year increase of about 130%.

The surge in imports of sorghum, barley and other crops is due on the one hand to gaps in domestic demand, and on the other hand to price advantages.

Zhang Jing, chief scientist of the National Modern Agriculture Barley and Highland Barley Industrial Technology System, told reporters that in previous years, barley imports did not exceed 3 million tonnes at most. “Most of the barley imported before was malting barley, 90% used for beer brewing.” Zhang Jing pointed out that in the past one to two years domestic beer production has been stable and demand has not increased, “the growth came from demand in the domestic feed industry.”

In recent years, because the temporary corn purchase and storage price rose year after year, domestic corn prices remained high, and corn imports were also subject to quota restrictions, downstream enterprises in the corn industry turned to seeking corn substitutes.

Zou Jianqiu, chief scientist of the National Modern Agriculture Sorghum Industrial Technology System, told reporters that sorghum is divided into feed sorghum, food sorghum and liquor sorghum, “mainly imported from Australia and the United States, and most of the imports are feed sorghum, flowing to feed enterprises.”

Compared with domestic supplies, the import prices of barley and sorghum are lower. “Imported barley is about 10% lower per jin than domestic barley.” Zhang Jing said. At the same time, compared with imported corn prices, their prices are also competitive.

According to data, the cost of imported corn in China is about 380 US dollars per tonne, while the import cost of sorghum is only 284 US dollars. Against the backdrop of a widening cost gap, more and more merchants will turn to using sorghum.

Chaotic import practices abound

The surge in imports of sorghum and barley has not only changed the structure of grain imports, but also brought shocks to the production of these minor crops.

In the view of experts, sorghum, barley and other crops are themselves minor crops. Compared with staple grain crops, their planting area is not large, and in terms of price they do not enjoy policies such as the minimum purchase price and temporary purchase and storage price. If import volumes continue to increase, it will dampen farmers' enthusiasm for planting, and the development of the industry will also suffer a severe setback.

In addition to affecting domestic production, the large increase in import volumes has also brought other hidden risks.

Zou Jianqiu revealed that previously a customs officer consulted her on how to distinguish sorghum for different uses. “Some importers import feed sorghum as liquor sorghum, or claim that what is imported from Australia is liquor sorghum and what is imported from the United States is feed sorghum,” she told reporters. “In fact, this is wrong. The tannin content of imported sorghum cannot meet the standards for domestic liquor sorghum.” When these substandard sorghum are transported to distilleries, the quality of the liquor produced is also greatly affected.

In addition, as import volumes surge, cases of weeds and diseases detected during import inspection and quarantine are also increasing.

For example, last year the Xiamen Haicang Inspection and Quarantine Bureau inspected a batch of imported sorghum in which quarantine weed seeds seriously exceeded the standard. In July this year, the Lianyungang Inspection and Quarantine Bureau intercepted foreign harmful organisms from containers of imported dried cassava from Vietnam.

The introduction of the new policy, which releases a signal of strengthened control, also leads experts to believe that the new policy will bring a certain constraint on the chaos in the import market.