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Thursday, August 25, 2016

China's Zika Rules Raise Fears for U.S. Exporters

(Dow Jones) -- China's recent move to add the U.S. to a list of Zika-infected countries is worrying U.S. exporters, who fear they will be required to fumigate all containers destined for Chinese ports. The cost to fumigate a container ranges from between $100 and $200.
Exporters who ship everything from agricultural products and chemicals to engine parts say they fear that conflicting information from Chinese custom officials about the new requirements could result in delays, added cost and lost business.
Since creating the list earlier this year, China has required that all containers be fumigated either at the country of origin with documentation or upon arrival in China. But exporters say some Chinese ports may accept the fumigation documents from abroad and others may not. Exporters from Brazil said they found that it depends on the local customs officers.
It is unclear whether China-bound containers should be fumigated in the U.S. or in China and if the rules will be applied across the board, said Peter Friedmann, executive director of the Agriculture Transportation Coalition, a Washington-based trade body. U.S. exporters are also concerned that fumigation by the Chinese could damage cargo.
Small and medium exporters say they stand to be hurt the most from any supply-chain disruptions.
"Oregon doesn't have the Zika problem, but we still have to fumigate and it's a significant expense," said Scott Harer, vice president of Oregon-based Columbia Seeds LLC, noting that seeds have low margins.
Columbia Seeds ships about 100 containers to China a year. It can't pass on the cost to customers because it has existing contracts, said Mr. Harer, who is also president of the Oregon Seed Association.
If exporters fumigate in China, he is concerned authorities there won't treat the boxes in a timely matter. But if they fumigate in the U.S., he said, "We fear that won't be acceptable in China and then costs pile up very quickly."