After China, Vietnam likely to ban agri imports from India

Dilip Kumar Jha / Mumbai Feb 24, 2012
Source: Business-standard

After China removed India from the list of its oilmeal importing countries from January 1, Vietnam has laid down impossible phytosanitary regulations for Indian exporters, thereby threatening one of the largest agri-commodities export markets in India. Vietnam may suspend the import of agri-commodities from India.

China reacted harshly and suspended the import of oilmeals from India in response to India’s ban on import of milk and milk products from China, announced late last year. Traders believe Vietnam’s threat is supported by genuine quality problems and is not politically driven, as in the case of China.

“Since last year, Vietnamese Plant & Quarantine Authority has been complaining about infestation of khapra beetle in agriculture commodities imported from India. They detected a number of cases with presence of khapra beetle and live weevils in Indian cargo and had warned the Indian authorities of their intent to ban the exports of agricultural commodities from India, if immediate corrective measures were not taken,” said Sushil Goenka, president of the Solvent Extractors’ Association of India (SEA).

On receipt of a series of complaints from Vietnamese authorities on the quality of maize imported from India, a trade delegation visited Vietnam and inspected several Indian consignments, between February 5 and 10. The delegation found large number of live weevils and other infestations, indicating a serious lapse on the part of fumigation agencies.

“It is evident that specific fumigation agencies have hideously failed to comply with the phytosanitary regulations laid down by the importing country. Disappointingly, exporters also do not seem to have taken this issue seriously,” Goenka added.

India is exporting various agriculture commodities, like maize, millet, soybean meal, ricebran extraction and rapeseed extractions to Vietnam totaling over 1.5 million tonnes per annum and worth Rs 3,000 crore. Thus, Vietnam is the largest market for Indian maize and the second-largest for oilmeals constituting over 18 per cent of annual trade.

To resolve the issue, a meeting was convened by the Union ministry of commerce with leading trade representative bodies on Tuesday here. However, the meeting was postponed.

Meanwhile, India’s commerce ministry has assured the Vietnamese Quarantine Authority of tightening the phytosanitary regulations to ensure strict compliance of the quality norms.

Taiwanese auth-orities, however, have rejected several consignments of maize and oilmeals originating from India in the past, which were later diverted to Malaysia and Indonesia.

According to trade sources, the level of aflatoxin should be below 50 parts per billion (ppb), which is acceptable for other countries also, including Taiwan. But, high moisture can lead to higher aflatoxin of 120 ppb, which is not acceptable for these Asian countries.

Meanwhile, Shantilal Lunkad, a Mumbai-based exporter, said, “The phytosanitary regulation is impossible to meet. Yet we feel, the move may not be politically driven, being China’s closest neighbour and important trade partner.”

Meanwhile, SEA has appealed to exporters not to risk the rejection of the entire cargo just to save a small amount on fumigation and to deploy services of reputed and well-established fumigation agencies.

“Giving the responsibility of proper fumigation, both on the fumigator and the cargo surveyors, will prevent recurrence of such problems in future. We sincerely hope all stakeholders in the export of agri-commodities to Vietnam would take this matter with utmost seriousness and strive towards exporting well-fumigated cargo and restore the pristine trade glory of India of being a supplier of quality goods,” Goenka said.

Last year, authorities in Vietnam had quarantined two shiploads of oilmeal from India after very high levels of methyl bromide – a fumigant used for pest control – were found in the commodity. After keeping the shipment on hold for two months, Vietnam rejected it and Indian exporters were forced to sell the commodity at a discount to Vietnamese traders.

The current global industry norm allows up to 30 gm per sq meter of methyl bromide for 72 hours, which Indian oilmeal exporters are maintaining. Including demurrages for over a month, Indian exporters lost nearly $0.5 million in two shipments.