Sorghum imports into China last month had one of its largest month-on-month increase to hit a new record high of 1.67 million tons, latest data from the customs showed over the weekend.
The volume doubled from the previous month and was also up 169% compared with May last year.
“A lot of May sorghum arrivals were bought last year. People were bullish on domestic market demand and sourced many cargoes from the US,” one China-based grain trading manager told Sitonia Consulting.
Rising sorghum demand this year is mainly used to substitute corn and barley in animal feed formula, according to two other market contacts.
“Barley import price was expensive. Sorghum was the only cheap and suitable option. But most cargoes were booked before the Lunar New Year holiday,” said a second grain trader.
Despite a small differential in energy content, the other benefit of replacing corn with sorghum in animal feed is that it does not require government quota.
Corn and wheat imports into China are strictly governed by a quota system that limits the total amount allowed for imports each year. The lion share of the annual quota is always assigned to state-owned purchasing giant Cofco, and the rest is distributed among other state and private buyers.
However, as the war broke out in Ukraine in late February this year, global corn and wheat prices spiked due to supply shortage. Even though sorghum prices also rose sharply in the past four months, the feed grain became a popular alternative for Chinese importers.
From a monthly average of 68,000 tons in 2019, China’s sorghum imports grew significantly since the beginning of the new decade. The same figure for 2020 and 2021 hit 402,000 tons and 787,000 tons respectively.
For 2022, China averaged more than 1 million tons of sorghum imports per month, up nearly 15 folds in three years.
