BEIJING - China will remove import tariffs on animal feed ingredients including soybeans, soymeal and rapeseed from five Asian countries, the Ministry of Finance said on Tuesday, a sign Beijing is seeking alternative supplies of the commodities as a trade dispute escalates with the United States.
China will drop tariffs on soybeans, soymeal, soybean cake, rapeseed and fishmeal originating from Bangladesh, India, Laos, South Korea and Sri Lanka from July 1, the ministry said.
Tariffs on soybeans are currently at 3 percent, rapeseed at 9 percent, soybean meal and cake at 5 percent and are 2 percent on fishmeal.
Even though the government had planned the tariff cuts since March, the cuts indicate that China is taking steps to reduce its dependence on U.S. soybeans amid the mounting trade dispute between the two countries. Soybeans are China's biggest agricultural import from the United States by value.
"It demonstrates the government's attitude that we will import from other countries. The market will understand from this that it's a signal," said Monica Tu, analyst at Shanghai JC Intelligence Co Ltd.
Apart from India, the countries included are relatively small soybean producers. None of them exported any of the oilseed to China in 2017.
India grew 11 million tonnes of beans in the 2016/17 marketing year, but only exported 269,000 tonnes, according to data from the U.S. Department of Agriculture.
However, the country exported just over 2 million tonnes of soymeal globally.
India produced 7 million tonnes of rapeseed that year too, but did not export any of the crop.
China agreed to drop the tariffs on more than 2,000 items as part of the Asia-Pacific Trade Agreement signed in Thailand in January 2017. The finance ministry said in March this year it would introduce the tariff cuts from July 1.
Still, the move occurs less than two weeks after Beijing said it would impose additional 25 percent tariffs on 659 U.S. goods worth $50 billion, including soybeans, as a prolonged trade spat between the world's top two economies grows.
The extra penalties were in retaliation for Washington's decision to levy tariffs on Chinese goods and have raised concerns that they will inflate costs and cut supplies of ingredients used in animal feed for the nation's vast livestock sector.