BEIJING\/CHICAGO (Reuters) – China will slap hefty anti-dumping deposits on imports of U.S. sorghum from Wednesday, the government said on Tuesday, a higher-than-expected charge on the grain used in livestock feed and the spirits industry, as trade tensions escalate between the world\u2019s top two economies.<\/p>\n
CHS Inc and other U.S. companies will have to put up a 178.6 percent deposit on the value of sorghum shipments to the country in what Beijing called a temporary measure, as the government continues to probe imports of the grain.<\/p>\n
Traders said the deposit was high enough to bring U.S. imports to a halt and inflate prices of alternatives, such as barley. Sorghum is used in livestock feed and the fiery Chinese liquor baijiu.<\/p>\n
\u201cDe facto, it stops all the trade,\u201d said Mike O\u2019Dea, a U.S. trader for broker INTL FCStone.<\/p>\n
The deposit on sorghum comes after Beijing had already threatened a tariff on the grain along with U.S. soybeans. China purchased $12 billion worth of U.S. soybeans last year, making it the most valuable U.S. agricultural export to China.<\/p>\n
The United States shipped 4.76 million tonnes of sorghum to China in 2017, worth around $1.1 billion and making up the bulk of China\u2019s roughly 5 million tonnes of imports of the grain last year, according to Chinese customs data. Just last week, about 116,000 tonnes of U.S. sorghum was shipped from Texas, U.S. Department of Agriculture data showed on Monday. [GRA\/CN]<\/p>\n
The U.S. Trade Representative\u2019s office said in a statement it would \u201ccarefully review China\u2019s measures on sorghum and take action as warranted, including through a World Trade Organization case if appropriate.\u201d<\/p>\n
White House Deputy Press Secretary Lindsay Walters added that Trump \u201chas made it clear that any further illegal trade actions by China are not acceptable, including the unfair targeting of U.S. sorghum producers.\u201d<\/p>\n
Walters also acknowledged recent announcements by Beijing about easing ownership limits in some sectors, such as autos.<\/p>\n
\u201cWhile we appreciate that China is recognizing longstanding U.S. concerns about discriminatory practices in the autos, ship, and aircraft sectors, we await actual implementation of any policy change,\u201d she said.<\/p>\n
The National Sorghum Producers, which represents U.S. farmers, maintained that the crop is not being dumped in China.<\/p>\n
\u201cToday\u2019s decision in China reflects a broader trade fight in which U.S. sorghum farmers are the victim, not the cause,\u201d the group said.<\/p>\n
China\u2019s move comes out of an anti-dumping investigation launched two months ago in retaliation for aggressive trade actions by Washington, including steep tariffs on solar panels and washing machines.<\/p>\n
Beijing said it found the domestic industry was \u201csubstantially damaged\u201d by U.S. sorghum imports being dumped into the country. It said it will issue a final ruling at a later date, but did not give a timeline.<\/p>\n
Other companies likely to be affected by the deposits are Archer Daniels Midland, a top seller of U.S. sorghum into China, Cargill [CARG.UL] and Louis Dreyfus [LOUDR.UL].<\/p>\n
ADM spokeswoman Jackie Anderson said the company is analyzing how this will impact ADM and what actions the company will take, both from a business and legal perspective.<\/p>\n
\u201cWe are very disappointed with this decision,\u201d Anderson said. \u201cWe do not believe that exporter-specific cost and price calculations were adequately considered, or that the proposed remedies are warranted.\u201d<\/p>\n
Cargill could not be reached for comment. CHS and Dreyfus declined to comment.<\/p>\n
Prices of soymeal and rapeseed meal used in animal feed jumped on the sorghum deposit news as traders worried China had penalties in store for other U.S. agricultural products.<\/p>\n
Curbing imports of grains is considered one of the most powerful weapons Beijing can use in the trade row. Midwestern U.S. farmers are a core of Trump\u2019s political base, and a surplus on the global grain market has growers worldwide struggling to find profitable markets.<\/p>\n
U.S. farm income has dropped by more than half since 2013, as years of massive harvests have depressed prices for staple crops. China\u2019s deposit would devastate Kansas, the top U.S. sorghum-producing state which supported Trump in the presidential election, Governor Jeff Colyer said in a statement.<\/p>\n
\u201cInstead of targeting fairly traded U.S. exports, China should immediately stop its unfair trading practices,\u201d he said.<\/p>\n
Trade experts and farmers said Beijing\u2019s decision to limit imports of feed ingredients could boost costs for China\u2019s own vast livestock sector and might also inflate retail pork prices in the world\u2019s top consumer of the meat.<\/p>\n
The scale of China\u2019s deposit devastated traders who had rushed to increase imports prior to the ruling. A trader with an international firm estimated more than 2 million tonnes of sorghum were on the water heading for China. A source at another international trading house said the sector had expected a lower deposit, close to 35 percent.<\/p>\n
Imports are usually high in April and May, and cargos en route are likely to get diverted to other points in Asia, traders said.<\/p>\n
Japan could buy some sorghum that had been destined for China, said Ken Morrison, a U.S. trader who worked for Cargill and now publishes a commodity newsletter. Sales of sorghum to China that have not yet been shipped will likely be canceled, he said.<\/p>\n
<\/p>\n
<\/p>\n
<\/p>\n","protected":false},"excerpt":{"rendered":"
BEIJING\/CHICAGO (Reuters) – China will slap hefty anti-dumping deposits on imports of U.S. sorghum from Wednesday, the government said on Tuesday, a higher-than-expected charge on the grain used in livestock feed and the spirits industry, as trade tensions escalate between the world\u2019s top two economies. CHS Inc and other U.S. companies will have to put up a 178.6 percent deposit… Read more »<\/a><\/p>\n","protected":false},"author":49,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[],"class_list":["post-1529","post","type-post","status-publish","format-standard","hentry","category-article"],"_links":{"self":[{"href":"https:\/\/baileyonlineclassroom.com\/eastasiaandoceaniablog\/wp-json\/wp\/v2\/posts\/1529","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/baileyonlineclassroom.com\/eastasiaandoceaniablog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/baileyonlineclassroom.com\/eastasiaandoceaniablog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/baileyonlineclassroom.com\/eastasiaandoceaniablog\/wp-json\/wp\/v2\/users\/49"}],"replies":[{"embeddable":true,"href":"https:\/\/baileyonlineclassroom.com\/eastasiaandoceaniablog\/wp-json\/wp\/v2\/comments?post=1529"}],"version-history":[{"count":1,"href":"https:\/\/baileyonlineclassroom.com\/eastasiaandoceaniablog\/wp-json\/wp\/v2\/posts\/1529\/revisions"}],"predecessor-version":[{"id":1530,"href":"https:\/\/baileyonlineclassroom.com\/eastasiaandoceaniablog\/wp-json\/wp\/v2\/posts\/1529\/revisions\/1530"}],"wp:attachment":[{"href":"https:\/\/baileyonlineclassroom.com\/eastasiaandoceaniablog\/wp-json\/wp\/v2\/media?parent=1529"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/baileyonlineclassroom.com\/eastasiaandoceaniablog\/wp-json\/wp\/v2\/categories?post=1529"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/baileyonlineclassroom.com\/eastasiaandoceaniablog\/wp-json\/wp\/v2\/tags?post=1529"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}