In an unexpected sign of goodwill ahead of trade talks with the United States, China announced Friday local time that its Ministry of Commerce had terminated its anti-dumping and countervailing duty cases related to U.S. sorghum and revoked preliminary duties on imports of the grain.
This critical good news for U.S. sorghum producers and exporters - and U.S. agriculture as a whole - has led to increased prices for sorghum farmers nearing harvest and caused at least some shipments of U.S. sorghum on the water to turn back to China.
Still, the episode highlights the risk trade policy poses to the grains marketplace, particularly but not exclusively as it relates to China.
"The re-opening of the sorghum market in China, with removal of the 178.6% duties initially imposed, is undoubtedly good for sorghum farmers, and all grain market participants," says U.S. Grains Council President and CEO Tom Sleight.
The shift in China's approach to sorghum came following significant efforts by the U.S. sorghum industry to respond to the investigations China brought earlier this year.
Last week, China announced that a review of the evidence in the cases showed the duties would harm the Chinese feed industry and consumers, an argument made by the U.S. sorghum industry in its extensive defense as part of the pending cases.
A week since the Chinese announcement, there continues to be interest in U.S. sorghum by customers who took another look after the duties announcement stranded up to 20 vessels on the water. USGC's staff globally is working to ensure the buyers of distressed cargo, including in places like Spain and Saudi Arabia, have the updated nutritional information they need to use it efficiently as well as to capture potential demand in new markets that could become regular buyers.
"We are confident that markets that already know U.S. sorghum, like Japan, Mexico and Morocco, will continue to look at it, while others that haven't bought it frequently, like Saudi Arabia, countries in South America and more, will look at it now," Sleight says.
"Sorghum has many attributes, and one upside of the issues with China could be that more buyers become aware of the product."
