Agrimoney: Chinese sorghum imports to reach 10m tonnes, analyst says 07-07-2015

China will import more than 10m tonnes of sorghum in 2015, a record high, as relatively low prices encourage feed mills to switch out of corn, CCM has said, even as other warn of the threat of a customs clampdown.

 

"China imported over 1m tonnes of sorghum during May alone, according to data from China customs, and imports have risen every month since February," said analysis goup CCM, noting that government policies have made sorghum competitive as a livestock feed against alternative such as corn.

 

"Sorghum's chief advantage lies in its relative cheapness," CCM said.

 

Domestic corn prices have risen in China, as a result of government stockpiling, while a 65% import tariff is imposed on imported corn.

China has no import quotas in place for sorghum.

 

Price advantage

CCM reports Chinese prices for imported corn at $380 a tonne, compared with just $284 a tonne for sorghum.

 

Corn is considered superior to sorghum as a feed, but CCM said that according to "insiders in China's feed industry", the country's manufacturers will switch out corn for sorghum if the price differential is over RMB150-200 a tonne ($24.50-32.70 a tonne).

 

Based on current rates, CCM predicts that China will import more than 10m tonnes of sorghum in 2015, more than a sixth of the 59.4 million tonnes the International Grain Council forecasts will be grown worldwide during the 2014-2015 growing season.

 

Increasing popularity

The IGC forecast Chinese sorghum imports at 9m in the year to August 2016, while the US Department of Agriculture forecasts 2015 Chinese sorghum imports at 9m tonnes.

 

"Stronger demand by feed mills in southern China has resulted in a sharp increase in imports from the US," said the IGC, noting that "sorghum has become an increasingly popular feedstuff, especially in pig and duck farms in the south of the country".

 

However, the IGC warned that government policy may discourage sorghum use.

 

"Given reports of stricter customs checks and the possible introduction of government subsidies to boost domestic corn consumption, the forecast does have some downward potential."

 

Inventory drawdown

Chinese sorghum imports have surged since 2011, when they stood at an all-high of just 84,000.

 

The imports present a problem for Chinese officials, who are currently trying to draw down swollen corn stocks.

 

If ample imports of sorghum continue to glut the feed market, it will be hard to dispose of corn inventories.

 

In May, www.cnchemicals.com revealed that Chinese officials had refused cargoes of sorghum imports, which it buys from Australia and the US.

 

The US Department of Agriculture's Beijing bureau warned that "officials have recently begun to enhance inspections and traders are voicing concern that the government may be getting ready to take more concerted action to limit [sorghum] imports".

 

This article has been published in the www.cnchemicals.com.

http://www.www.cnchemicals.com/news/chinese-sorghum-imports-to-reach-10m-tonnes-analyst-says--8547.html

 

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