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China slaps 179% preliminary duty on U.S. sorghum

U.S. Grains Council scrambles to help find new home for sorghum en route to China.

China has announced preliminary duties of almost 179% on U.S. sorghum imports while the country continues with the antidumping investigation it launched in February in response to President Donald Trump’s actions on solar panels and washing machines.

China has increasingly become the largest export market for U.S. sorghum in recent years. The U.S. shipped 4.76 million metric tons of sorghum to China in 2017 -- comprising the bulk of China's roughly 5 mmt of sorghum imports that year -- and worth around $1.1 billion, according to Chinese customs data.

Tom Sleight, president of the U.S. Grains Council (USGC), said USGC was “outraged” at the news and is working closely with the sorghum industry and U.S. officials to find a path forward following China's action.

“Our global staff is now focused on finding homes for the substantial amount of U.S. sorghum that is in transit to China now or has already been sold but not shipped, as well as new crop that will be harvested in the coming months,” Sleight added.

Agriculture Secretary Sonny Perdue said the international grain market is about the most open market in the world. “It is ludicrous to even mention ‘dumping,’ because China can buy product from anywhere they choose. This is clearly a political decision by the Chinese, and we reject their premise,” he said.

Perdue continued, “Our sorghum producers are the most competitive in the world, and we do not believe there is any basis in fact for these actions. As we explore options, we are in communication with the American sorghum industry and stand united with them.”

Sleight said USGC continues to advocate for a workable resolution. “We are being very clear with all stakeholders, here and in China: This tit-for-tat has to stop, and talks to find reasonable and lasting solutions must begin -- for the good of U.S. agriculture and the customers we have spent decades working to win as loyal buyers.”

Perdue said the fact remains that “China has engaged in unfair trade practices over decades, and Trump is correct in holding them accountable.”

Perdue added that the Administration remains “committed to protecting American agricultural producers in the face of retaliatory measures by the Chinese.” However, agricultural groups, as well as those on Capitol Hill, have continued to call for access to markets and ending the trade tension escalation rather than relying on a bailout.

In February, when China launched its challenge, its commerce ministry's statement indicated that the investigation into sorghum dumping would be carried out for the period from Nov. 1, 2016, until Oct. 31, 2017, while an investigation of industrial injury would be for Jan. 1, 2013, until Oct. 31, 2017. The investigation should be complete by Feb. 4, 2019, but can be extended until Aug. 4, 2019. The most recent action is a preliminary duty allowed to be accessed while the investigation continues.

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