China will open its markets to Argentine sorghum this year, according to Argentina, creating competition for the US farmers who have been the main beneficiaries so far of a surge in Chinese demand for the grain normally used to make distilled alcohol.
High prices of corn in China have forced animal-feed producers to turn to sorghum as a cheaper alternative, especially after Chinese quarantine officials began more strictly enforcing restrictions against imports of certain types of genetically modified corn.
Imported corn and sorghum cost less than domestic corn thanks to Beijing’s minimum price policy, which is designed to encourage the planting of corn.
The Argentine minister of agriculture will sign bilateral protocols, paving the way for China to import Argentine sorghum, during his visit to Beijing next month, his deputy Gabriel Delgado said in Beijing on Friday. “We expect trade to be smooth,” Mr Delgado said.
China is by far the world’s largest sorghum importer, buying about 4.3m tonnes last year, compared with second-ranked Japan’s 1.5m tonnes. Its imports were negligible until 2009, before soaring in 2012 and 2013.
The US leads the world in sorghum production and exports, shipping about 5m tonnes this year. Argentina is the world’s fifth-largest sorghum producer but the second-largest exporter, with exports of about 1.3m tonnes. Australia ranks third.
Argentina may have come late to the feast. Already this summer Chinese quarantine officials indicated stricter quality checks on sorghum imports, in an apparent attempt to force producers of animal feed in southern China to buy domestic corn and ease swelling stocks.
The increased scrutiny has already led one Shanghai-based agricultural consultancy, JC Intelligence, to halve its forecast for sorghum imports for the year to end September.
Sorghum generally has an easier time than corn in clearing Chinese import inspection procedures because it is not genetically modified.
Date: October 26, 2014