Mapa negotiates new rules with China to facilitate orange juice exports

The world's largest producer and exporter of orange juice, Brazil wants to increase the product's share in the Chinese market. Last year, China represented 3% of Brazilian orange juice exports, which shows that there is room to expand sales. Therefore, the Secretariat of International Agribusiness Relations (SRI) Ministry of Agriculture, Livestock and Supply (Mapa) intensified actions to facilitate product shipments to that country.

One of Mapa's main negotiations with the Chinese authorities was the review of microbiological limits for the presence of molds and yeasts in orange juice, which began in September 2014. They intensified over the last year and resulted in the adoption of standards used by the majority of importing countries. New microbiological limits, announced by China last January, will come into force in November this year.

The new Chinese standards replace the “GB 17325-2005” rule. In the document “GB 17325-2015”, the levels for molds and yeasts were modified to up to 100 CFU/ml, meeting Brazilian demand. Previously, the limit was below 20 CFU/ml.

According to SRI, China's more restrictive health requirements, associated with tariff barriers, had a negative impact on Brazilian product exports. Brazil's share of Chinese orange juice imports fell from 80% in 2011 to 65% last year.

China is the fourth largest market for Brazilian orange juice, behind the European Union, the United States and Japan. Brazilian exports totaled US$1,87 billion in 2015. Although in value there was a drop of 5% compared to 2014 , export volume increased by 4,1%, reaching 2 million tons.

For China, export performance was unfavorable, SRI figures show. In the same period, Brazilian sales fell 25,3% in value (US$55,9 million) and 15,6% in volume (31 thousand tons).

Tariff barriers

Even after overcoming the health issue, there are still tariff barriers that harm the competitiveness of Brazilian products in the Chinese market. Today, SRI highlights, a different rate is applied, between 7,5% and 30%, depending on the temperature of the juice (products frozen below -18ºC pay the lower rate).

According to the sector, this tariff barrier discourages the adoption of the bulk system, at temperatures around -10ºC, used to export the product to the USA, Europe and other countries. This system, currently taxed in China at a maximum rate of 30%, is much more competitive than drum transport, currently used to supply the Chinese market.

To resolve the tariff barrier, Mapa placed as a priority, at the Chamber of Foreign Commerce (Camex), the launch of negotiations for an agreement on tariff preferences with China. Under the rules of the World Trade Organization (WTO), the signing of partial scope agreements between developing countries, such as China, Brazil and other Mercosur countries, is permitted.