Grain exporters warned of tighter controls at Chinese ports

Speaking in Melbourne, policy expert Erlend Ek told the members of the Australian grains industry that one Australian shipment of grain had been stopped at a Chinese port last month due to standards that came into effect at the end of June.

These standards relate to ergot, a fungal disease that reduces yields and can be toxic to animals and humans. 

China had brought in a new maximum tolerance level for any shipments that might harbour the ergot fungus at a time when Chinese policy on food production has been moving from self-sufficiency to a more market-based approach. 

Beijing’s emphasis has now been placed on food quality and environmental concerns, Ek said as “China wants to be seen as a quality producer​”. 

Because of “massive changes​” in food and agriculture policy, hundreds of standards have been updated.

“They have just revised 6,000 national standards for food​,” Ek said. “The ergot issue comes as a result of this​.”

Chinese authorities have also wound back high subsidies and price support for local farmers, in a bid to drive efficiency. 

“[The government is saying] let’s make farming professional and more of an industry, and we need to allow other sectors to invest in agriculture​,” Ek said. 

It is expected that this will involve changing the current collective ownership structure of agricultural land to allow companies and individuals to trade in collective ownership. 

There remain opportunities for Australian grain exporters, albeit under higher quality standards, as demand exceeds supply in China.

Chinese grain production is expected to reach 600m tonnes by 2020, in the face of demand estimated at 700m.

The country imported some 105m tonnes last year, rising to a predicted 120m tonnes this year, mostly of soybeans.