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Home / Business / China fans argue with heavy deposit of US sorghum imports

China fans argue with heavy deposit of US sorghum imports



PEKING / CHICAGO (Reuters) – China will ban hefty anti-dumping deposits on US sorghum imports as of Wednesday, the government said on Tuesday, adding a higher-than-expected burden on grain in the feed and livestock industries the trade tensions between the two largest economies in the world are escalating.

CHS Inc. and other US companies are required to make a 178.6 percent down payment on the value of sorghum deliveries into the country, which Beijing described as a temporary measure as the government continues to review grain imports.

Dealers said the deposit was high enough to halt US imports and increase prices for alternatives such as barley. Sorghum is used in cattle feed and the fiery Chinese liquor Baijiu.

"In fact, it stops all trading," said Mike O & #; Dea, a US broker for broker INTL FCStone.

The sorghum deposit comes after Beijing has already threatened one inch on the grain with US soybeans. China bought $ 1

2 billion of US soybeans last year, making it the most valuable US agricultural export to China.

According to estimates by the Chinese customs authorities, the USA shipped 4.76 million tons of sorghum to China in 2017, which amounted to around 1.1 billion US dollars and last year accounted for the bulk of China's imports of around 5 million tons , Just last week, about 116,000 tons of US sorghum were shipped from Texas, according to data from the US Department of Agriculture on Monday. [GRA/CN]

The Office of the US Trade Representative said in a statement that it "carefully review the measures taken by China on sorghum and take action if appropriate."

White House Deputy Press Secretary Lindsay Walters added that Trump has "made it clear that China's further illegal trade dealings are unacceptable, including the unfair bias of US sorghum producers."

Walters also confirmed Beijing's recent announcement that it is easing ownership restrictions in some sectors than cars.

"While we appreciate that China recognizes America's long-standing concerns about discriminatory practices in the areas of cars, ships and aircraft, we are waiting for the real implementation of any political changes," she said.

DUMPING FEES

The national sorghum producers representing American farmers claimed that the harvest would not be dumped in China.

"Today's decision in China reflects a broader trade battle in which US sorghum farmers are the victim, not the cause," the group said.

China's move comes from an anti-dumping investigation launched two months ago in retaliation for aggressive commercial actions in Washington, including steep tariffs on solar cells and washing machines.

In Beijing, it was found that the domestic industry was "seriously damaged" by importing sorghum from the US into the country. It said it would make a final decision later, but did not specify a timetable.

Other companies likely to be affected by the deposits include Archer Daniels Midland, a best seller of US sorghum in China, Cargill [CARG.UL] and Louis Dreyfus [LOUDR.UL].

ADM spokeswoman Jackie Anderson said the company is analyzing how this will affect ADM and what action the company will take both from a business and legal perspective.

"We are very disappointed in this decision," said Anderson. "We do not believe that export specific cost and price calculations have been adequately taken into account or that the proposed remedies are justified."

Cargill could not be reached for comment. CHS and Dreyfus did not want to comment.

SOFING FEED PRICES

Prices of soybean meal and rapeseed meal used in animal feed jumped to sorghum warehouse news as traders feared that China would have penalties for other agricultural products in the US.

(For a graph about 'China soy flour, rapeseed futures on sorghum import deposit news'

Corbing imports of grain is considered to be one of the most powerful weapons that Beijing can use in its trade series The US Midwest is at the heart of Trump's political base, and a surplus on the global grain market is causing global breeders to be in difficulties to find profitable markets.

US Farm incomes have more than halved since 2013, China's deposit would devastate Kansas, the top US sorghum-producing state supporting Trump in the presidential election, said Governor Jeff Colyer in a statement.

"Instead of fair-traded US China should stop its unfair trade practices immediately, "he said.

Trade expert and farmer e said Beijing's decision to restrict the import of feed ingredients could increase the cost of China's own huge livestock sector and could also inflate pork retail prices among the world's largest meat consumers.

The extent of the Chinese deposit shook the traders, who had increased imports before the decision. A trader with an international company estimated more than 2 million tons of sorghum on its way to China. A source in another international trading house said the sector had expected a lower deposit, nearly 35 percent.

Imports are generally high in April and May, and cargo on the way is likely to be diverted to other points in Asia, traders said.

Japan could buy some sorghum destined for China, said Ken Morrison, a US dealer who worked for Cargill and now publishes a commodities newsletter. The sale of sorghum to China, which has not yet been delivered, is likely to be canceled, he said.

(For a chart on US agricultural exports to China & # 39; s click on reut.rs/2G3zlfu)

Additional coverage by Josephine Mason and Hallie Gu in Beijing; Michael Hirtzer, Karen Pierog and P.J. Huffstutter in Chicago; David Lawder in Washington and Gus Trompiz in Paris. Arrangement by Tom Hogue, David Gregorio and Tom Brown


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