China to lift ban on Indian rapeseed meal

China had banned the commodity 3 years ago due to quality concerns

China will lift a ban on Indian rapeseed meal imposed three years ago due to quality concerns, China's quarantine authority said on Wednesday.

Both countries had signed a sanitary protocol and agreed to ensure Indian meal meets Chinese standards, China's quality watchdog, the General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ), said in a statement.

The agreement signed last week during Indian Prime Minister Narendra Modi's visit to China, aims to help boost bilateral trade, AQSIQ said on its website. It did not give further details.

India shipped 650,000 tonne of rapeseed meal to China in 2011, accounting for about half of China's annual imports. The ban was imposed in late 2011 after testing showed meal contained a toxic chemical.

Chinese imports, however, have since fallen sharply due to an expansion of its domestic crushing industry, driving imports of rapeseed and reducing demand for meal, which is used as a protein-rich feed ingredient for fish farming.

The domestic industry now largely meets demand for meal in the country's southern provinces, including Fujian and Guangxi, said Lu Yun, an analyst with Shanghai JC Intelligence Co. Ltd (JCI).

"Indian rapeseed meal will be attractive for buyers, particularly in the northern parts of the country," he said.

Indian meal would compete against Canadian rapeseed meal, whose price was about 20% higher in 2011, said the China National Grain and Oils Information Centre (CNGOIC).

China's imports of rapeseed meal are seen at 150,000 tonne during 2015-16 (June/May), down 25% from a year earlier. Total demand in China is projected at 10.8 million tonne for the year, according to a CNGOIC estimate published this week.