The U.S. sorghum industry said it is a victim, not a perpetrator, of the broad trade dispute between China and the United States that threatens billions of dollars of farm exports. China’s Commerce Ministry announced on Tuesday that anti-dumping deposits of 179 percent will be levied on U.S. sorghum as part of an investigation that began when President Trump put tariffs on imports of solar panels and washing machines from China.
U.S. growers are particularly vulnerable to disruptions of the sorghum market. The United States is the world’s largest sorghum exporter and China is the top importer. The USDA estimates that two-thirds of this year’s crop will be exported. Bloomberg said China imported 4.8 million tonnes of U..S sorghum worth $957 million in 2017. An analyst based in Shanghai told the news service that the high deposits announced by China will force some buyers to cancel orders for the U.S. feed grain.
The National Sorghum Producers, a sorghum trade group, said it provided Chinese officials with several thousand pages of data to show that U.S. sorghum was not being dumped, “but none of this material appears to have been seriously considered…Today’s decision in China reflects a broader trade fight in which U.S. sorghum farmers are the victim, not the cause. And U.S. sorghum farmers should not be paying the price for this larger fight.”
China has threatened 25 percent tariffs on U.S. soybeans, corn, wheat, cotton, beef and orange juice, as well as tobacco and whiskey, as counter-measures to $50 billion in proposed tariffs on its high-technology exports. The White House says its tariffs will punish China for theft of intellectual property. Soybeans worth $14 billion a year are the largest U.S. farm export to China.
Brazilian-grown soybeans commanded a 40 cent-a-bushel premium over U.S. soybeans at the end of last week, buoyed by the possibility that China would need a large volume of South American soybeans if its tariffs make U.S. beans unaffordable, said AgriCensus. Half of the price difference could be a risk premium, it said. Shipping rates to China are cheaper from Brazil than U.S. Gulf ports, so Brazilian bean usually sell for 20 cents a bushel more than U.S. export prices.
If China rachets up its purchases of South American soybeans, it could affect oilseed channels worldwide, according to some analysts. Displaced U.S. soybeans could backfill markets formerly held by Brazil and Argentina. Brazil is the largest soybean exports in the world and the United States is No 2. Argentina dominates world trade in soymeal and soyoil but its its processors could lose ground if high prices make soybean exports attractive.