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ASF fallout prompts cut to Chinese grain import hopes

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Chinese grain imports in 2019-20 will fall short of previous expectations thanks to a dent to feed demand stemming from the African swine fever epidemic, US officials said, seeing sorghum buy-ins at an eight-year low.

 

The US Department of Agriculture’s Beijing bureau estimated use in livestock rations of four major grains – barley, corn, sorghum and wheat – at a total of 198,100 tonnes in 2019-20.

 

That represents a fall of 6.30m tonnes year on year on the bureau’s estimates – and a shortfall of 17,400 tonnes behind the USDA’s official forecasts for feed use of the four grains.

 

The bureau cited the dent to demand from a lower Chinese pig herd, saying that “overall feed demand is expected to decline amid lower domestic swine inventories due to African swine fever”.

 

‘Lower compound feed production’

China’s agriculture ministry earlier this week said that China’s pig herd had in August shrank by 38.7% year on year, extending a run of accelerating decline prompted by African swine fever (ASF).

 

The disease has, besides directly killing animals, prompted farmers to reduce even unaffected herds for fear of being hit by the virus.

 

Citing “lower compound feed production in China”, the USDA bureau pegged at 175.0m tonnes the country’s corn consumption in livestock rations in 2019-20 – 13.0m tonnes below the USDA forecast, and a figure which would be the lowest in four years.

 

For wheat, the feed use forecast, at 19.0m tonnes, was 2.0m tonnes beneath the USDA’s official estimate, with the barley figure 2.0m tonnes lower too.

 

‘Significant reduction in demand’

On imports, the weakened demand profile means that corn volumes will come in at 6,000 tonnes in 2019-20 – 1.0m tonnes below the USDA figure, but still relatively high, “due to attractive prices from major exporters, especially Ukraine”, the bureau said.

 

However, for barley, imports were seen at 5.0m tonnes – a six-year low, and 2.0m tonnes below the official USDA estimate.

 

The bureau flagged a “significant reduction in demand for imported feed barley”, which accounts for roughly half of Chinese demand for the grain, the balance being largely for the brewing industry.

 

Sorghum imports were, at 500,000 tonnes next season, seen dropping to their lowest in eight years, with the bureau reporting “feed use expected down”.

 

It also flagged “lower projected imports for US sorghum”, in the face of the US-China trade dispute, while shipments from Australia are expected to be curtailed by a 2019-20 harvest forecast by Abares at the lowest in 26 years.

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