As China’s taste for cheese is increasing constantly, the country has faced some new trade policies in recent times. Import tariffs are going to be decreased, while spontaneous import bans lead to uncertainty for exporters of cheese to China.
China has recently lowered the import tariff rate on many cheese sorts by 4%, dropping from 12% previously down to 8%. To be more specific, rated and powdered cheese, processed cheese, not grated or powdered and other cheese, traded under different HS codes, will enjoy the 4% lower tariff rate. Blue-veined cheese is even to witness a higher tariff cut, falling from 15% down to 8%. The new tariffs have been coming into effect on December 1, 2017.
The country is responding with this measurement to the booming demand for cheese domestically, which can’t be met by domestic production alone currently. After all, China is on a good way to become the largest cheese importer in the coming years ahead. A representative of the Ministry of Finance in China has announced that the tariff reduction is aimed at increasing domestic product supply to better satisfy the people’s demand.
For example, China imported more than USD400 million of cheese in 2016, mostly foreign varieties such as mozzarella destined for use in pizzas. The dislike of strongly flavoured varieties in China means mould-ripened cheese is mostly consumed by foreign residents.
The new tariffs will likely have a significant effect on the prices in China’s cheese market, leading to more competitive products from different exporters around the world. It especially benefits exporters of those nations, that don’t have a free trade agreement with China yet, like the USA or countries of the European Union. Hence, the largest exporters of dairy products to China, Australia and New Zealand, are still in a competitive advantage over other countries they enjoy duty-free access on a certain quantity of their products and diminishing tariffs for various products.
A list of all free trade agreements of China can be seen here
The middle kingdom is on pace to become the largest cheese importer in the world in the coming years. The price of cheese has not really changed significantly during the last years, but with higher competition in China’s market, decreasing prices seem possible.
China
had banned the import of soft cheese from Europe in early September as a result
of finding harmful bacteria in some of the imported cheese.
However,
the European cheese industry is still very concerned about the ban, as it is
not the first time that China is banning imports on cheese and such a case
could happen likely again in the future, bringing uncertainties for exporters
and traders. The industry players are concerned that potentially many other
types of cheeses may be affected in the future in the same way.
It
happened several times in the past, that Chinese authorities will block one
type of cheese for a short period of time. For example, in 2014, imports of British
cheese were banned complaining about hygiene standards in UK dairy farms. In
2008, Italy’s mozzarella was banned amid concerns it contains harmful dioxin.
CCM is China’s market intelligence provider for the industries of agriculture, chemicals, and food & feed.