SOURCE / ECONOMY
Australian sorghum imports dry up
Industry moves to diversify sources as bilateral ties worsen
Published: Jun 11, 2020 08:18 PM

A view of sorghum in Luoping county, Southwest China's Yunnan Province in October 2019 Photo: cnsphotos


An official document seen by the Global Times showed that China's sorghum imports from Australia stood at zero in March and April - when the bilateral relationship saw early signs of deterioration - showing that markets react quickly to potential risks, said industry analysts. 

Meanwhile, Chinese importers booked about 80,000 tons of the grain near the beginning of April from Argentina, which are expected to reach China in July, an insider close to the government told the Global Times on Thursday.

The newly booked imports, combined with the 30,000 tons China imported from the South America country earlier in 2020, took the total to about 110,000 tons - almost equal to the total of 140,000 tons in 2019, according to the insider.

The halting of purchases from Australia shows that industry players may have prepared to diversify imports as early as March, when bilateral ties between China and Australia showed signs of worsening, Jiao Shanwei, editor-in-chief of cngrain.com, a website specializing in grain news, told the Global Times on Thursday.

Jiao said that unlike soybeans, China does not rely on imported sorghum as an alternative to barley as a feed ingredient. The increase in imports of sorghum from Argentina is a market-driven behavior by enterprises, given that it's harvest time in South America.

As relations between China and Australia have sunk to new lows as Australian politicians blindly follow the US and join in on the China blame game during the pandemic, analysts said it's highly possible that bilateral trade will further drop, especially for those products where China could easily find substitutes.

In late May, China's Ministry of Commerce (MOFCOM) announced anti-dumping remedies against Australia's annual $1.5 billion barley exports to China, based on investigations conducted in strict accordance with Chinese laws and WTO rules.

China is Australia's largest trading partner, with two-way trade worth about $163 billion a year.

Agricultural experts also noted that increasing purchases of farm products from countries such as Argentina is in line with China's efforts to diversify its farm imports amid a tussle with the US.

China's soybean imports from Brazil increased 2.6 percent to 5.94 million tons in April. Meanwhile, China bought 665,591 tons of soybeans from the US in April, down 62 percent year-on-year, official data showed.

Factors such as the depreciation of Brazil's currency and its increased willingness to export soybeans also contributed to the growth of China's soybean imports, Gao Feng, MOFCOM spokesperson, told a press conference on Thursday.

"China's May soybean imports continued to rise by 27.7 percent year-on-year. The soybeans were purchased by Chinese companies, in accordance with changes in the international market and domestic production needs, and were based on market principles," Gao said.

"Against the backdrop of increasing downward pressure on the world economy, Chinese companies are actively expanding imports, which will help boost confidence in global economic development," Gao noted.

While asked whether such large farm purchases from Argentina and Brazil will affect China's demand for US farm products, Jiao said that "whether China will purchase more US agricultural products still depends on the bilateral relationship."

"China's commitment to the first-phase China-US trade deal is consistent, as it showed in the 2020 Government Work Report," Gao Lingyun, an expert at the Chinese Academy of Social Sciences in Beijing who closely follows the trade negotiations, told the Global Times on Thursday. 


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