Bulk organic imports avoid US fees on Chinese ships

: Agriculture
25/04/22

The fees imposed by the US on Chinese-built vessels will not significantly impact maritime organic imports to the US due to exceptions for small bulk vessels, but containerized imports will face some fees.

The US announced Thursday that it will impose fees of $50/net ton (nt) on Chinese ship operators and $18/nt, or $120/container, on Chinese-built ships.

Most organic imports to the US, especially for corn and organic soybeans, use bulk vessels to ship to the US. During the 2024-25 marketing year through March, no bulk vessel bringing organic corn and soy products into the country exceeded 70,000 dwt, according to bill of lading data. The fees will exclude any Chinese-built bulk vessel with a capacity of under 80,000 dwt, according to the US Trade Representative (USTR). As a result, bulk organic imports into the US will avoid these fees, even if imported on a Chinese ship.

Some organic imports are brought in using containers. For a container with 21 metric tonnes (t) of organic soybeans, a fee of $120/container would be $0.16/bushel. The fee would be similar for a container of organic corn, but organic corn is rarely imported via container. The fee for a container with 21t of organic soybean meal will be $5.18/short ton.

Some exporters to the US are more exposed to the fees on containers because of higher use of containerized freight. Shipments from the Black Sea used entirely bulk vessels over the past year, which will avoid the fees. Exporters in Africa and India, however, use containers for most exports and will be more exposed. Africa supplied 50pc of US maritime organic soybean meal imports during the 2023-24 marketing year, according to Argus estimates.

All imports of organic soybeans from Argentina since last May used bulk vessels because of the higher cost of containerized freight to the US. If containerized freight rates between the US and Argentina fall, some organic commodities could be exported to the US by containers.

Organic imports could also face some delays because of these fees, market contacts said. Some containers may wait at port longer until a non-Chinese-built vessel is available to ship the product to the US. This would lead to longer shipping times into the US and potentially to demurrage charges.

The fees will take effect in October and will escalate over the next three years. The fees on a container brought in on a Chinese-built vessel will grow each year from $120/container in 2025 to reach $250/container in April 2028.

By Alexander Schultz

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