Dim Sums: Agricultural Markets in China

China's Ministry of Commerce announced today that its antidumping and anti-subsidy investigation of sorghum imported from the United States would be terminated because duties would not be in the public interest. Provisional duties of 179% imposed last month will be terminated and deposits collected will be returned. The Ministry's "Announcement on termination of anti-dumping and anti-subsidy investigation of sorghum imported from United States" [ 关于终止对原产于美国的进口高粱反倾销反补贴调查的公告 ] released May 18, 2018 said the investigation found that duties would raise costs for consumers and impose even more pain on the beleaguered swine industry which is suffering severe losses due to a 30-percent decline in hog prices since the beginning of the year: "In the process of the investigation, the investigating organizations received many reactions from downstream users who told the investigation that downstream livestock farming industry would experience higher costs. The anti-dump...

Two recent Chinese commentaries reveal commonly-held beliefs about American farm subsidies that are behind Chinese antidumping and countervailing duty investigations of U.S. farm products like chicken, distillers grains, sorghum, and maybe soybeans. A March 7 article, " Influence of U.S. agricultural subsidies on world agricultural trade " from the State-supported Futures Daily was posted on the Ministry of Commerce's WTO information web site and a number of other Chinese sites. The unidentified author asserted that imports of sorghum from the U.S. "receive subsidies from the U.S. government," which allow them to be exported to China at a price lower than the "normal value," and "there is a significant degree of dumping." The implicit assumption is that the Chinese price is the "normal" value, and any price lower than the Chinese price must be abnormal--the "middle kingdom" is the center of the world, after all. A M...

An April 2015 study tour of feed and livestock producers in Guangdong Province reveals how the industry's discovery of imported sorghum undermined Beijing's attempt to enforce high Chinese corn prices by banning corn imports. The flexibility and inventiveness of industry on China's southern coast contrasts with the sclerotic inside-the-box thinking at communist party headquarters in the northern capital. A survey team organized by COFCO's futures market research unit with support from Dalian Commodity Exchange spent 7 days visiting feed, livestock, oilseed-processing, ports and trading companies in ten regions of Guangdong Province. Guangdong is one of China's two largest feed-milling provinces, the largest importer of feed ingredients, and a major producer and consumer of livestock and aquaculture products.  (A more detailed rundown of the visits is here .) The survey team estimated that sales of feed are overall dow...

As shipments of imported sorghum soar, inspectors at Chinese ports are carefully scrutinizing the grain for problems. Inspection and quarantine authorities say they have stepped up inspections and testing to prevent new pathogens and weeds from entering the country, but more cynical observers might suspect that the inspections are a disguised trade barrier. A May 4, 2015 article entitled " The 'Hidden Killer' in American Sorghum " announced the discovery of a pathogen that causes "grape vine blight" in a 49,000-metric-ton shipment of U.S. sorghum at a port in Shenzhen. The article originated with China's inspection and quarantine authority and has been re-posted on a number of Chinese web sites. The pathogen, phoma glomerata , is said to have a wide range of possible hosts, could threaten "hundreds of plants," and could inflict "incalculable" losses on China's environment and agricultural production, according to the article. ...

In 2012, Chinese officials were alarmed to discover that 99% of the country's corn imports came from the United States. They immediately rushed out to sign up Ukraine and Argentina as corn suppliers. Later, they signed up Bulgaria. An article reviewing China's 2014 corn imports concludes that China did indeed diversify its corn imports. Corn imports were down 20% during 2014, and all of the decrease reflected reduced imports from the United States due to rejections over the MIR162 issue. Imports from Ukraine, Thailand, Laos, and Myanmar increased. The Guoji Shangbao (Global Business News) article announced that the U.S. share of China's corn imports fell to 40%, "comparable to the proportion from Ukraine." Source: dim sums analysis of Chinese customs statistics .   This is a curious strategy for a country obsessed with "food security." The largest and most reliable corn supplier in the world is knocking on your door, offering to sell you as m...

China's inspection and quarantine authority issued a document ordering port officials to increase inspection and testing of imported corn, sorghum, and barley used for feed. While it purports to be a response to quality problems discovered in grain shipments, it is probably a disguised strategy to slow down imports that undermine officials' efforts to dispose of their huge, high-priced domestic grain stockpile. The document issued by the General Administration for Inspection and Quarantine (AQSIQ) was dated July 29, 2014 and comes eight months after officials began rejecting all corn shipments containing any trace of MIR 162, a genetically modified corn variety that China's Ministry of Agriculture has not approved for import. The document showed up on several web sites August 11, but doesn't seem to be on the AQSIQ site. The document observes that grain quality problems have become increasingly evident since imports of corn, sorghum, barley and other grains began i...

Sweet sorghum is another crop being touted as a costless source of biofuel, but the road is not so smooth. Sweet sorghum looks like a giant corn stalk about 10 feet high. The stalk contains sugar that can be squeezed out and distilled into alcohol. Sweet sorghum is seen as an attractive alternative because it can grow on poor land that’s unsuitable for other crops. Nongrain biofuel projects are the “in” thing and they’re being pushed by the government and everyone wants a piece of the action. Especially since there are generous government subsidies available. Mr. Liu, an official of the local Agricultural Bureau’s seed company in Huanghua ( Hebei Province ), complained to a China Times journalist that COFCO had left the farmers at the altar. In March 2007 COFCO and its partner, BP petroleum, made plans for pilot projects in Hebei, Shandong, and Inner Mongolia, giving local officials and farmers some sort of promise that they would buy the sorghum to make biofuel on a trial basis. ( CO...