The USDA Foreign Agricultural Service (FAS) in China has kept its import forecast for corn at 22 million metric tons for 2020-21, indicating that the country will likely use imports of sorghum, barley and other grains in feed rations.
But the report also addressed the issue of China's corn imports, which FAS pegs at 4.5 mmt more than the official USDA level. The calendar year 2020 corn imports by China surpassed the 7.2 mmt tariff-rate quota (TRQ), the report noted, “with no slowdown in sight.”
But the issue of the 65% tariff that is applied to imports above the TRQ remains a question, as the report said, “It remains unclear if the 65% out of quota duty was applied to imported corn or if additional TRQs were quietly issued as official government agencies remain silent on the matter. In addition, there is rampant industry speculation of a 'special TRQ' that will be used for China to import U.S. corn to meet its purchase commitments under the U.S.-China Phase One Economic and Trade Agreement.”
It is interesting that even USDA's on-the-ground offices in China are unable to unearth additional details on the 65% tariff that applies to imports above the TRQ levels, a key question given that China's appetite continues strong for U.S. corn, including 1.36 mmt of purchases announced Tuesday by USDA.