April 20, 2018 |
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U.S. Sorghum Ships U-Turn at Sea after China Tariffs

China announced Tuesday that grains handlers would have to pay 178.6% duty

U.S. Sorghum Ships U-Turn at Sea after China Tariffs

Several ships carrying cargoes of sorghum from the United States to China have changed course since Beijing slapped hefty anti-dumping deposits on U.S. imports of the grain, trade sources and a Reuters analysis of export and shipping data showed.

Sorghum is a niche animal feed and a tiny slice of the billions of dollars in exports at stake in the trade dispute between the world’s two largest economies, which threatens to disrupt the flow of everything from steel to electronics.

The supply-chain pain felt by sorghum suppliers on the Pacific, Atlantic and Indian oceans underscores how quickly the mounting trade tensions between the U.S. and China can impact the global agricultural sector, which has been reeling from low commodity prices amid a global grains glut.

Twenty ships carrying over 1.2 million tonnes of U.S. sorghum are on the water, according to export inspections data from the USDA’s Federal Grain Inspection Service. Of the armada, valued at more than $216 million, at least five changed course within hours of China’s announcing tariffs on U.S. sorghum imports on Tuesday, Reuters shipping data showed.

The five shipments, all headed for China when they were loaded at Texas Gulf Coast export terminals owned by grain merchants Cargill Inc. or Archer Daniels Midland Co. would be liable for a hefty deposit to be paid on their value, which could make the loads unprofitable to deliver.

Beijing, which is probing U.S. imports for damage to its domestic industry, announced Tuesday that grains handlers would have to put up a deposit of 178.6% of the value of the shipments.

Read the full report here.

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