PRINTABLE VERSION   EMAIL TO A FRIEND   RSS FEEDS 15:34 UK, 16th Jul 2014, by Agrimoney.com
Fears over China sorghum import curbs 'overplayed'

Fears that China may restrict its soaring sorghum imports, after already clamping down on trade in corn and distillers' grains, may be misplaced, US farm officials said, explaining an upgrade to its forecast for buy-ins.

The US Department of Agriculture noted industry reports suggesting that China might increase regulation of its booming sorghum imports, which are expected to rise fivefold to a record 3.40m tonnes in 2013-14.

China has already clamped down on buy-ins of corn and distillers' grains (DDGs), a corn-derived feed ingredient, ostensibly over concerns of contamination with a genetically modified variety approved in Washington and Beijing, although many investors suspect that the move is aimed at encouraging use of the country's own large supplies.

After a succession of strong harvests, China's corn stocks will hit 87.3m tonnes, equivalent to nearly half the world total, at the end of 2014-15, the International Grains Council believes.

'Not substantiated'

However, ideas of curbs on Chinese sorghum imports "have not yet been substantiated", USDA officials said.

Furthermore, "the prices of interior or export positions do not appear to reflect a resultant policy change".

In fact, the officials noted that Chinese buyers have been bidding up for sorghum because it faces less regulatory red tape, in part because it is grown from conventional, rather than genetically engineered, seed - unlike corn.

"As a non-GM crop, it faces less barriers getting through customs in China, and no import quota is required."

Export competition

The comments came as the USDA expanded on a 200,000-tonne upgrade to 3.9m tonnes in its forecast for Chinese sorghum imports in 2014-15.

That would represent a 500,000-tonne rise on this season's record volumes, and represent four times as much as China has imported over the previous 50 year combined.

The demand is helping support sorghum exports from the US, which are expected at a 10-year high of 5.0m tonnes in 2013-14, falling only modestly to 4.5m tonnes next season, 500,000 tonnes more than previously thought.

Conversely, the USDA has cut by 200,000 tonnes to 800,000 tonnes its forecast for Australian sorghum shipments in 2014-15, reflecting the impact of drought on its harvest, "which is constraining exports".

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