China’s Commerce Ministry announced yesterday that out-of-quota sugar imports will now be subject to increased tariffs starting August 1, regardless of import origin. This comes just over a year after the country levied tariffs on large exporters like Brazil and Thailand. Smaller producers such as the Philippines and El Salvador were exempt from these original tariffs, but this will no longer be the case starting next month.
China’s World Trade Organization (WTO) commitments currently allow for 1.94 million tonnes of sugar imports per year at a tariff of 15 percent—anything outside of this allowance is considered out-of-quota and was previously subject to a 50 percent tariff. Under the protectionist measures enacted last year, out-of-quota imports from non-exempt exporters were hit with an additional 45 percent tariff, totaling a whopping 95 percent. Now, no exporters will be exempt from this, regardless of their size.
These additional measures are enacted at a time when Chinese sugar prices are quickly dropping due to a large global supply and growing domestic production. Furthermore, many small domestic farmers in poor regions have been hurt by sugar imports and smuggling. The Chinese government hopes these protectionist measures will help support its domestic farmers. Gro Intelligence subscribers can easily access a wide variety of sugar production and trade data to stay current with global market trends.