Exporters of Indian rapeseed gainer in the wake of US-China tariff war
India is likely to be the gainer of US-China tariff war that continues unabated. Indian rapeseed exporters will soon be restarting rapeseed meal export to its neighbour China, who was India’s biggest buyer of rapeseed, a key ingredient in animal food, until it banned purchases in 2011-12. China was importing 4-5 lakh tonnes of Indian rapeseed when it banned Indian shipments over issues of contamination. Rapeseed meal is used as feed for poultry and livestock.
Consequent to banning Indian oil meal imports in 2012, China had increased its shipments from the US. However, in the aftermath of the ongoing tariff war, shipments from the US have become costlier after China levied a 25 per cent import duty on the commodity in retaliation for US tariffs.
In the wake of escalation in US-China tariff war, Ministry of Commerce & Industry (Govt of India) had tried to convince the Chinese officials that their fear of contamination in rapeseed meal is unfounded as all pests are destroyed when rapeseed meal is processed at extreme heat. In this regard a meeting was held at India’s embassy in Beijing with the aim to lobby China to resume purchases of rapeseed meal and to drum up interest in the country’s other major agricultural products wherein Sanjeev Kumar Chadha (Managing Director of India’s state-run National Agricultural Cooperative Marketing Federation – NAFED) and Rong Weidong (Vice President of China’s Chamber of Commerce of Foodstuffs and Native Produce – CFNA) too participated. It is to be recalled that China had banned Indian imports when its tests showed that some cargoes coming from India were contaminated with malachite green, a dye widely used in Indian to brand grain sacks.
The move is China’s latest effort to reduce its reliance on US soybeans, as China and the US remain locked in an outright trade war. China buys 60% of the soybeans traded worldwide, processing them into soymeal to feed its vast pig herds. Soybeans are the top US agricultural export to China by value.
With tariff hikes implemented on US soybean, China has been looking for alternative meals such as rapeseed meal and sunflower meal. It therefore went ahead with removing the ban on rapeseed import from India.
Consequent to the above mentioned development, the rapeseed meal shipments from India can resume now if they meet certain inspection and quarantine requirements. This is likely to motivate more farmers to go for rapeseed farming, which is India’s main winter-sown oilseed crop. Other than exports to China, which had stopped but will now resume, India also exports rapeseed to South Korea, Vietnam and Thailand.