Worry over non-tariff trade barriers after Turkey action on Indian wheat | Business Standard News

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Phytosanitary norms often cited to settle political scores or for vested interest: Experts

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In another example, a prominent Asian country had raised concerns over flowers exported from India because of the presence of some banned chemicals.

Turkey’s rejection of a wheat consignment from India over allegations that it contained the rubella virus highlights the complex and vexed issue of phytosanitary standards, and how countries and commercial entities often use them to protect their domestic turf or address narrow commercial concerns. According to government officials and the exporter, ITC, the 56,000-tonne wheat consignment had passed all checks, both by the surveyors nominated by the buyer as well as the Indian Plant Quarantine Authorities, before being loaded on the ship. Hence, it is not clear in which phase of the journey the virus allegedly got into the shipment.

After Turkey’s rejection, the buyer re-sold the consignment to Egypt. But late on Saturday, Egypt, too, barred the entry of the shipment because it did not meet quarantine requirements, news agency Reuters reported, quoting Egyptian plant quarantine chief, Ahmed El Attar.

An ITC spokesperson said that the company — one of the country’s most reputed agricultural players — had exported to a Netherlands customer on free on board (FOB) terms (wherein any damages post shipment are the responsibility of the buyer) and that the consignment had passed all the requisite checks.

Food and commerce minister Piyush Goyal recently said the country that rejected the wheat consignment had not entered into such trades with India earlier and that the reasons for the rejection were being looked into.

Though Goyal did not mention it, media reports said that Turkey’s less than cordial relations with India could be one reason why the consignment got rejected. India has been a fairly regular player in the world wheat market for the last couple of years, and has rarely faced phytosanitary issues regarding the commodity.

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“It is true that countries use phytosanitary standards to create non-tariff barriers or to protect their domestic interests. European Union (EU) countries ban consignments based on pesticide residue beyond permissible limits,” Gokul Patnaik, chairman Global Agrisystems, and former head of Agriculture and Processed Food Products Export Development Authority (APEDA), told Business Standard.

He added there is also a bit of trust deficit on Indian phytosanitary standards and many countries consider India’s testing and tracking methods to be lax.

“In this case, we need to verify whether all possible standards were adhered to or whether the consignment got affected during transit. But, yes, there have been instances where on deeper inquiry it was found that the bogey of low phytosanitary levels was raised for vested commercial interest by traders,” Patnaik said.

In April 2015, several consignments of grapes exported from India to the European Union were stopped mid-way over fears that they contained higher than permissible limits of chlormequat chloride residue. The chemical, which is widely used by grape farmers across India, is a common one for stimulating growth in fruit plants.

The EU’s maximum residue limit (mrl) for chlormequat chloride, also known as lihocin, is 0.05 mg/kg (or 0.05 ppm). But Indian grapes were found to contain residues higher than this limit. Reports said that part of the reason for this was that Indian authorities had not placed chlormequat chloride on the list of substances not to be used on grapes meant for exports. As a result, grape consignments were rejected en masse that year, causing a loss of over Rs 300 crore for farmers and exporters.

Not only grapes, a host of agricultural products from India such as mangoes, rice or even pomegranates, have faced non-tariff barriers in the EU, US and even China.

In 2017, India’s pomegranate exports to the EU were halted mid-way after the residue monitoring plan for the crop was changed abruptly. Similarly, China stopped non-basmati rice exports from India a few years ago after it was claimed that some samples contained ‘khapra’ (cabinet) beetle and were therefore unfit for consumption. The charge was, of course, vehemently denied by the Indian authorities and traders.

In another example, a prominent Asian country had raised concerns over flowers exported from India because of the presence of some banned chemicals.

Patnaik said that over the years, there has been a considerable improvement in India’s testing and tracking systems. Traders and exporters have also become more aware of global benchmarks and have started working with the buyers to meet their requirements.

Regarding Turkey’s recent rejection of the wheat consignment, Ajai Sahai, director-general of the Federation of Indian Exporters Association, said that not much should be made of the issue.

“As far as I know, so far there has been no official communication from the Turkish government. It is a commercial transaction between two private parties and, hence, not much should be read into this,” Sahai said.

He said that if Indian wheat was of inferior quality, other countries would have also raised their concern. But so far, India has exported almost 1.7 million tonnes of wheat in FY-23 and no one has questioned its quality.

Meanwhile, trade sources said that no one lost any money in the deal as not only did the exporter get its due price, but the agency which forward sold it in the Netherlands also sold at a premium of around $60-$100 per tonne.

“The bogey of phytosanitary standards has been raised due to some inter-corporate rivalry, because otherwise, the price quoted is quite fair and reasonable,” a leading trader said.

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