BITTERSWEET REALITY: CHINA DOUBLES TARIFFS ON SUGAR IMPORTS

China said on May 22 that it will impose hefty penalties on sugar imports after a six month probe that began last year by the government at the request of domestic mills resulted in a finding that imports were seriously damaging its domestic market

bittersweet reality china doubles tariffs on sugar imports

The ruling by the Chinese ministry of commerce will affect about one third of the annual sugar imports into the country and impose an extra tariff for the next three years on out-of-quota shipments.

China currently allows a quota of 1.94 million metric tons of imports at a tariff of 15% as part of its commitment to the World Trade Organization. It also imports an estimated additional out-of-quota three million metric tons a year for which the tariff imposed was 50%.

The duty on out-of-quota sugar imports will now raise effective this year from 50% to 95%, said the ministry and is a move aimed at stemming the tide of imports that began flooding the market in 2011.

After a year, the rate will fall to 90%; after two years, to 85%. The tax on the in-quota imports of 1.94 million tons will remain 15%, according to the ruling by the Chinese ministry.

The ruling exempted about 190 smaller countries and regions from the new duty including those producers such as the Philippines and Pakistan as well as Myanmar on its southern border.

China is the largest sugar importer in the globe, say leading industry analysts.

Chinese farmers and factories can produce roughly one-half of the country’s needs but because of antiquated technologies their costs are much higher making imported sugar more attractive due to its lower more competitive selling price.

In fact, it has been profitable to import and resell sugar even with 50% tariffs on out-of-quota sugar imports, said Charles Clack, a sugar analyst at Rabobank, adding that this tax increase is aimed at discouraging imports.

But traders said the higher tariffs will also likely spur increased smuggling across the Chinese porous southern border, while some imports from major producers may be shipped through third-party nations excluded from the tariffs.

The impact of the Chinese ruling on the Vietnam sugar segment is not clear, as Vietnamese experts have yet to fully weigh in on the issue, but it is expected by some industry analysts to be bittersweet news.

Nguyen Thanh Long, chair of the Vietnam Sugarcane and Sugar Association said local farmers and sugar producers are in much the same predicament as their Chinese counterparts as they use outdated technology that results in a much higher production cost when compared to Thailand and Cambodia.

He noted sugar and sugarcane production by Vietnamese farmers is approximately one-half of that in Thailand and Cambodia who produce 120 metric tons of sugarcane and 12 metric tons of sugar per hectare.

As a result, even at record soaring prices amid an ongoing sugar shortage in Vietnam, local farmers and producers aren’t profiting and many are still losing money and have been forced to shutter their doors and go out of business.

The price of sugar in Vietnam is roughly US$50 per ton, almost at par with the most expensive sugar in the world, while the price in Thailand and Cambodia is US$25 per metric ton.

This disparity in price has encouraged illegal imports of sugar into Vietnam by unscrupulous criminal enterprises.

As recently as last week the HCM City Market Management Department discovered 70 metric tons of smuggled sugar into a province in the Mekong Delta that housed inventories from both Thailand and Cambodia.

Beijing has been cracking down on such shipments from both Myanmar and Vietnam over recent months, helping push down overall imports as one of a series of steps taken to make sending exports there less appealing.

It is too early to know how the Vietnamese farmers and sugar mills will adapt to this latest move by Chinese officials, the doubling of import tariffs, or how they will adjust their commercial strategies but many analysts are already indicating the news is bittersweet.

Source: VOV

Source: http://customsnews.vn/

APL ENHANCES CHINA-INDONESIA COVERAGE

Singapore-based container shipping company APL, part of French CMA CGM, is launching the China Southeast Asia Service 6 (CS6), a new weekly service connecting North and Central China with Indonesia.

The company said that the new CS6 service complements its China-Southeast Asia Service 1 (CS1) that serves the South China-Indonesia trade lane.

The service will offer shippers a direct connection from key North China exports areas in Lianyungang and Qingdao to the major Indonesian cities of Jakarta and Surabaya, according to APL.

The first sailing of the new CS6 service will commence from Lianyungang on April 26, 2017.

The CS6 service will call the ports of Lianyungang, Qingdao, Shanghai, Ningbo, Shantou, Hong Kong, Jakarta, Surabaya, North and South Manila.

Source: http://worldmaritimenews.com/

VEGETABLE EXPORTS REACH NEARLY 190 BILLION VND PER DAY

VCN- Vegetable exports continue to be an impressive bright spot in the export activities of the first two months of 2017 in Vietnam with a high growth of double-digit, bringing the amount of nearly 190 billion vnd per day.

vegetable exports reach nearly 190 billion vnd per day
The Tan Thanh border gate – exporting point of vegetables in fruits to China. Photo: Thai Binh.

73% of vegetable exports to China

According to the latest statistics from the General Department of Vietnam Customs, by 15th April 2017, the total value of fruit and vegetable exports reached $US 857 million, an increase of nearly 30% compared to the same period in 2016 (reaching $US 661 million), equivalent to an increase of $US 196 million.

Thus, on average, each day vegetable exports brought about $US 8.2 million, equivalent to the amount of nearly 190 billion vnd per day.

As a result, vegetables and fruits continue to maintain the third largest commodity exports in agricultural and aquatic products in Vietnam (after seafood and coffee).

Notably, vegetables and fruits had a stronger growth rate than seafood (only 7.8%) and coffee (21%). Thus, the difference between vegetables and the two above commodity groups was narrowed down.

Regarding the export market, Vietnamese vegetables have been exported to many countries and regions in the world such as Asia, Europe, and America. In particular, there have been many markets requiring high quality such as the United States, Japan, Australia, South Korea and European countries such as Germany and Netherlands.

However, the biggest market of Vietnamese vegetables and fruits was still China. According to the latest statistics from the General Department of Vietnam Customs, exported fruits and vegetables to China reached $US 512 million, accounting for 73% of the total export value of this commodity in the same period.

At the local border near China, the area of exported vegetables and fruits were concentrated mainly at Tan Thanh border gate area (Lang Son) and Lao Cai border gate area.

Diversifying the market

Regarding the results on the export of vegetables recently, on 24th April 2017, speaking to a reporter of the Customs Newspaper, Dr. Nguyen Huu Dat – the executive of the Vietnam Fruit and Vegetable Association (VINAFRUIT) said that the results of fruit and vegetable exports were very positive.

According to Dr. Nguyen Huu Dat, the fruit and vegetable exports have been increasingly flourishing for many reasons.

Firstly, the trade promotion and market expansion by State management agencies have been creating positive results. As a result, Vietnamese vegetables and fruits have started to promote in the fastidious markets such as the United States, Japan, South Korea or EU countries.

“Although the value of export turnover to these markets is not high, but the export of vegetables to the fastidious markets with a high quality will increase the prestige for Vietnamese vegetables and fruits”, Dr. Dat said.

On the other hand, according to Dr. Nguyen Huu Dat, an increase in the demand for fruits and vegetables in the world was an opportunity for export growth of this product in Vietnam now as well as in the coming time.

In particular, an important cause which was emphasized by Dr. Nguyen Huu Dat was the role of scientists, the business community, producers and farmers in the effort to diversify the design and quality, brand promotion for Vietnamese vegetables and fruits.

“Although the fruit and vegetable export businesses have limited financial resources, they have efforts in promoting the brand and seeking the export markets. On the other hand, in the past two years, there has been a close connection among the exporters, the farmers, and the producers. Therefore, the quality and design of the products have been increasingly improved, thereby creating the prestige for Vietnamese vegetables and fruits in the world market”, the VINAFRUIT leader said.

In 2016, vegetables and fruits brought $US 2.457 billion, with a growth rate of 33.6% compared to 2015. This was the third largest export commodity in the field of agriculture (after fishery and coffee) and was the second fastest growing commodity group in the total of 45 key export categories which were listed by the General Department of Vietnam Customs (after gemstones, precious metals and products with a growth rate of 44.4%).

By Thai Binh/ Hoang Anh

Source: http://customsnews.vn/

 

280 TRILLION VND FOR IMPORTING GOODS FROM CHINA

VCN- According to the latest information of the General Department of Vietnam Customs, by the end of the first quarter of 2017, the total value of imports from China reached nearly $US 12.7 billion, equivalent to about 280 trillion vnd, an increase of 19.5% compared to the same period in 2016.

280 trillion vnd for importing goods from china
280 trillion vnd for importing goods from China.

The uptrend

This is a very notable news, as imports from China appear to be slow in 2016 after years of strong gains. In 2016, Vietnam even spent $US 49.929 billion to import goods from China, but this figure only increased by $US 431 million compared to 2015.

However, in the first 3 months of 2017, imports from China have shown signs of recovery.

The latest statistics from the General Department of Vietnam Customs showed that in March 2017, Vietnam spent $US 5.072 billion importing goods from China. The turnover of imports this month from China was even much bigger than the total turnover of imports from Japan – the third largest market in our country in the first quarter of 2017 (in the first quarter of 2017, Vietnam only imported goods from Japan with a turnover of $US 3.709 billion).

Only in the first quarter of 2017, there were 5 commodity groups of imports from China with a turnover of $US 1 billion or more. The leading commodity group included machinery, equipment, tools and spare parts with a turnover of $US 2.526 billion, followed by telephone and accessories with a turnover of $US 1.609 billion; computers, electronic products and components with a turnover of $US 1.582 billion; fabrics with a turnover of $US 1.197 billion; and iron and steel with a turnover of $US 1.176 billion.

Notably, out of the 5 commodity groups of imports with a turnover of “billions of dollars” from China mentioned above, there were 4 commodity groups of imports from China maintaining the leading position in the Vietnamese market (except for imported computers and electronic products from Korea at No. 1).

In particular, imported telephone and accessories from China accounted for nearly 55% of the total import turnover of Vietnam; imported fabrics from China accounted for 51% of the total import turnover of Vietnam; imported iron and steel from China accounted for nearly 50% of the total import turnover of Vietnam; imported machinery, equipment, tools and spare parts accounted for 31.3% of the total import turnover of Vietnam.

With a total import turnover of nearly $US 12.7 billion in the first quarter of 2017, imports from China accounted for 27.3% of the total import turnover of Vietnam at the same time.

China takes advantage of opportunities

Regarding an increase in imports from China, on 17th April 2017, a reporter of the Customs Newspaper exchanged with Assoc. Prof. Pham Tat Thang – the senior researcher (the Ministry of Industry and Trade) who knows very clearly about foreign trade relations between Vietnam and China.

Assoc. Prof. Pham Tat Thang said that the problem of imports and trade deficit from China had existed for many years with controversial analysis. But in fact, import activities and trade deficit from China are still rising and there is no sign of stopping.

Regarding this issue, Assoc. Prof. Pham Tat Thang said that there were 2 main reasons.

The first reason is that China has taken advantage of opportunities from the ASEAN – China Free Trade Agreement (ACFTA) and the Vietnam-China Border Trade Agreement.

The second reason is that there has been an increase in imports from China with a large number of investment projects in Vietnam implemented by Chinese contractors. Through these projects, Chinese contractors imported a large amount of machinery, materials, and equipment from China to produce in Vietnam.

“Therefore, if there is no breakthrough in management solution, especially the management of investment projects, the control of import activities and the trade deficit from China will be very difficult”, Assoc. Prof. Pham Tat Thang said.

In addition to analyzing the causes of massive imports from China, which led to a large trade deficit, Mr. Pham Tat Thang also said that Vietnamese authorities should have solutions for these problems and further promote Vietnam’s exports to China.

Assoc. Prof. Pham Tat Thang stated: In fact, Vietnamese goods have not penetrated into the Chinese market and have not been able to access large distribution channels through the main roads. The export activities mainly occur through cross-border trade, which is regulated by China. For example, from early 2017 to date, China has restricted imports through Quang Ninh, Lang Son and changed to promote import-export through Lao Cai, Cao Bang and we have to depend on China. Therefore, this weakness should be solved soon.

By Thai Binh/ Hoang Anh

Source: http://customsnews.vn/

Imported Iron and Steel from China increase nearly 50 %

VCN- Although the volume of imported Iron and Steel from China sharply reduced compared to the same period in 2016, the total value of turnover increased, leading to the average imported price of these commodities soaring by 48%.

imported iron and steel from china increase nearly 50
The chart compares volume and total value of turnover and the average price of imported Iron and Steel from China in January, 2017 and January, 2016. Chart by: T.B

According to the latest information from the General Department of Vietnam Customs, there was 678,865 tons of all kinds of Iron and Steel imported from China with a total value of turnover of $US 343 million in January 2017.

Compared to the same period in 2016, the volume of imported Iron and Steel fell 224,048 tons, equivalent to 25%. However, the total value of turnover increase by $US 34 million, equivalent to 11%.

Thus, the average price of imported Steel and Iron from China in January was $US 505/ton, increasing by 48% compared to the average price of January, 2016 ($US 342/ton).

Besides the notable information mentioned above, the statistical results of the General Department of Vietnam Customs showed that China still remained a stable volume of imported goods to Vietnam between January 2017 and January 2016.

Specifically, the country’s total imported goods from China in January, 2017 was $US 3,943 billion turnover which was $US 9 million higher than the import turnover of $US 3,934 billion in the same period last year.

In particular, the stability of turnover value of imported goods from China took place in January, 2017 which included the Tet holidays (from January 28, 2017), meanwhile Vietnam’s import and export activity still took place normally in January 2016, because the Tet holidays of 2016 started from February 6, 2016).

imported iron and steel from china increase nearly 50 Iron and steel imports from China accounting for 59.1%VCN- According to the statistics on import and export goods from the General Department of Customs, iron …

To the end of January, 2017, besides Iron and Steel, other imported commodities with large turnover value are: Machine, equipment, tools and instrument were $US 857 million; telephones, mobile phones and parts thereof were $US 493 million, computers, electrical products and parts thereof were $US 482 million and fabric was $US 374 million.

By Thai Binh/Hoang Loan

Source: http://customsnews.vn/