The protocol includes new import standards requiring soybeans exported to China to be free from live pests and not mixed or contaminated with other grain, minerals or soil. According to local press reports, this new protocol was spurred by quality issues found in select shipments that arrived in China, the FAS said.
Local producers and exporters said the protocol is more stringent, especially with the inclusion of new pests and fungi. They are also concerned supplies may not be able to meet the requirements, which could lead to a significant decline in soybean exports to China, the FAS said.
“The protocol warns that if non-compliance is found and if the problem is ‘serious enough,’ the exporter and elevator could be suspended immediately until corrective measures are taken,” the FAS said.
The FAS said the next few months will be critical for the Uruguayan soybean sector, as it will accelerate shipments to China. The 2016-17 marketing season will be the first season Uruguay ships under these new requirements.
If Uruguayan soybean exports encounter significant problems entering China, it could lead to a dramatic reduction of soybean area for the 2017-18 season, the FAS said. So far the planted area is expected to remain stagnant at 1.2 million hectares. This area and a return to historical yields means production is forecast at 3 million tonnes, the FAS said.
Production for 2016-17 is estimated at 3.4 million tonnes due to record yields from excellent conditions throughout the season.
In late February, Uruguay’s agriculture department met with soybean producers and exporters to discuss the protocol. They recognized that greater controls are needed to curb pests, but there is concern over the monetary risk exporters would assume without any guarantees, the FAS said.
The agriculture department has said it will implement a monitoring program to minimize the occurrence of pests, fungi, and weeds. Chinese authorities will also be supervising the companies handling and exporting these soybeans and determine if they are taking steps to clean the beans and reduce debris, impurities, weeds and pests.
