US sorghum is used for feed

Updated: 2013-09-12 09:08

By Caroline Berg in New York (China Daily)

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Sorghum is similar in feed value to corn and not subject to import-quota restrictions in China, where buyers only need to pay a 2 percent import tax for food use, a 9 percent import tax for feed, and a 13 percent value-added tax on their purchases, according to the Global Milling article.

Rising Chinese imports are expected to boost sorghum prices over the next few months in the US, the report said. US sorghum prices are about $20 a ton higher than US corn prices, partly due to the trade with China, traders told Reuters.

US sorghum is about 20 percent, or 400 yuan ($65.35) per ton, and cheaper than domestic corn, which has remained expensive because of Beijing's stockpiling policy designed to support prices and subsidize farmers, Reuters said. Exceeding the corn import quota would subject Chinese feed mills to a 65 percent import tax, according to the report.

As of Tuesday, Sept 10, China booked its largest weekly purchase of US sorghum on record in late August for 120,500 tons, and Chinese mills have already bought about 800,000 tons of US sorghum for shipment in the 2013/14 year beginning in September, according to Reuters. Total orders are likely to reach 1 million tons while maintaining favorable prices, traders told Reuters.

"Sorghum is a very credible feed ingredient," Erickson said. "But the protein and micro-ingredient content is different from corn, so nutritionists have to take that into account as they formulate the feed."

Erickson said sorghum kernels are also smaller and harder than corn, so milling the grain is a little different.

Two members of the Texas-based United Sorghum Checkoff Program, which is overseen by the US Department of Agriculture, are in China right now to meet with Chinese counterparts to promote US sorghum and the crop's general production methods and uses, Sorghum Checkoff CEO Tim Lust told China Daily.

"We know there's a strong demand, and I think the big question we'll see is how will the demand sustain over time," Lust said. "Some of that will be tied to policy in China and other countries on what import levels are allowed and how that all plays out."

Lust said US sorghum stakeholders will simply have to wait and see how the market grows over time.

"From the US standpoint, it's certainly a new market for us, and one that has the potential to be very significant," Lust said. "We're certainly doing what we can to make sure we understand what the needs are and make sure that we supply a quality product."

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(China Daily USA 09/12/2013 page1)

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