Consumed by humans and animals, rapeseed also known as oilseed exports have been banned from India to China with importers in the Middle Kingdom contesting that some Indian rapeseed consignments were found contaminated with malachite green a chemical feared to cause cancer if the level exceeds stipulated norms.
Following the accusation, the Export Inspection Council of India carried out an inspection on Indias exports of rapeseed and found that the chemical malachite green came from the dye that was used to mark the jute bags, a common practice in the export of any grain, lentil or seed. While the General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ) or the Chinese quarantine authority are not happy with the Indian explanation, New Delhi has invited a Chinese government delegation in February-March to inspect oilmeal crushing facilities.
According to traders the Hindu Business Line spoke to, “It could be in retaliation for the ban imposed by India on Chinese milk products,” a source who did not want to be identified said.
India had banned Chinese milk products, including chocolates, after it was reported to have been contaminated with melamine, a dangerous chemical that led to the death of four children in China. The ban has been in force since 2008 and was recently extended till June.
“China is known for such tactics. Last year, it stopped buying Argentine soyabean oil for a couple of months before it ran out of stock and resumed buying. Even in the case of India, it is buying soyameal while stopping rapeseed meal,” the source said.
The source said that consignments that were contracted at higher price were not allowed, while those booked at lower price were accepted. Furthermore, even though Indian rapeseed is cheaper than Canadian or domestic Chinese supplies, China plans to increase its shipments from Canada, who export oilmeal at higher profit margins to the Chinese traders – a reason why most Chinese traders favour Canadian oilmeal to Indian. China imported a total of 1.2 million tonnes of rapeseed meal in 2011, out of which just over half was from India. Rapeseed imports in the first half 2012 are expected to increase significantly, with monthly imports hitting as much as 300,000 tons.
Indian traders recognize that China is a highly valuable market. Second only to Canada, India’s exports to China last season (October 2010-September 2011), amounted to 4.05 lakh tonnes of rapeseed meal valued at Rs 400 crore against 2.6 lakh tonnes valued at Rs 280 the previous year.
China is the fourth-largest oilmeal importer from India and it buys large quantities of rapeseed meal and soymeal from the South Asian country. Japan, Vietnam and South Korea are the other major Indian oilmeal buyers.