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China Turns to Sorghum after U.S. GMO Corn Banned

June 6, 2014
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Millers of animal feed in China, the world’s largest meat producer, are buying a record amount of sorghum after the government curbed U.S. corn imports, a Bloomberg News survey shows.

Imports of the coarse grain may climb to a record 3.5 million metric tons in the 12 months beginning Oct. 1, compared with a projected 3 million tons in the current period, according to the median of five estimates from traders and analysts this week. Inbound shipments were 629,634 tons in the 12 months through September 2013.

The commodity, traditionally used to make baijiu liquor such as Moutai in China, is now fattening ducks and hogs. That’s helped make export prices more expensive than corn, according to U.S. Grains Council. U.S. corn shipments to China plunged to the lowest level in seven months in April after authorities rejected cargoes containing an unapproved genetically modified variety.

"Sorghum wasn’t a popular commodity, yet all of the sudden China comes in and takes 3 million tons, so that doesn’t leave much for everyone else," said Cherry Zhang, an analyst at Shanghai JC Intelligence Co., the country’s biggest animal feed researcher.

China may purchase three quarters of U.S. sorghum exports this year, compared with none in 2012, according to the Bloomberg survey.

 

Non-GMO

 

Sorghum isn’t genetically modified and isn’t subject to import quota restrictions by China. If the country also imports Argentine sorghum, local prices will jump and farmers in the second-biggest grower will boost planting, Pablo Altuna, a trader at Toepfer International, said in March.

China shipped in 1.6 million tons of U.S. sorghum in the seven months through March 31, overtaking Mexico as the biggest buyer, data from the U.S. council show.

The price of sorghum in New Orleans was $239.16 per ton June 2, compared with $214.46 for corn, the council estimates. Domestic corn costs 2,530 yuan ($404) a ton at China’s Shenzhen port, compared with 2,150 yuan for U.S. sorghum shipped to China today, Zhang’s data show.

China rejected 1.12 million tons of U.S. corn and products containing the genetically modified strain MIR 162, the General Administration of Quality Supervision, Inspection and Quarantine said April 29.

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