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US sorghum players look to woo Chinese buyers

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Aerin Curtis

By Aerin Einstein-Curtis

Last updated on 11-Jul-2017 at 13:02 GMT2017-07-11T13:02:01Z

© iStock/melcowell
© iStock/melcowell

US sorghum producers met a Chinese feed buyers’ delegation as part of a market maintenance and expansion informational trip.

The group visited Kansas and Texas last week and had the chance to see fields in production and harvesting, grain elevators and export facilities, said Florentino Lopez, Sorghum Checkoff executive director. “Our ability to strengthen those relationships is extremely important,” he added.

“They really represent a large part of the purchases in China of US sorghum,” he told FeedNavigator. “About 50% of what is purchased today.”

Bringing a delegation to the US not only helps maintain and improve relationships with buyers, but gives visitors the chance to see the crop in production, he said.

“We do this on a several day visit, as those groups come to the US, [we are] trying to share information,” he said. “They can see it in the fields, talk to merchandisers and develop that relationship knowing who to call and who to seek bids from.”

China has been the top buyer for US sorghum this marketing year, reported the US Grains Council. And the country has previously been an important market for the feed grain.

Sales to China accounted for 77% of US sorghum exports in 2016/17, the council said.

In 2012/13 the US exported almost 3,400 metric tons of sorghum to China, the grains council reported . In 2013/14 it sold about 4.2m metric tons and in 2014/15 it sent about 8.3m metric tons.

In the last marketing year, 2015/16, China imported about 7m metric tons of the feed grain, the council said.

From September 2015 through May 2016 China imported aout 5.7m metric tons of US sorghum although from September 2016 through May 2017 the country has only imported about 3.8 million metric tons.

Chinese buyers 

The visit was arranged in conjunction with the US Grains Council, said Lopez.   

One goal of having the team of Chinese buyers visit is to show them what is available in terms of crop production, quality and availability, he said. “One of the others is you have a better sense of buying when you’ve started to create a personal relationship, so having the ability to create those personal relationships is important,” he added.

“If they have the confidence in the grain that they’re buying, and the availability of that crop and have started or maintained a relationship, then it’s a lot easier for them to ask questions and to know sources for information,” he said.

The checkoff does not sell grain, but it seeks to offer knowledge and help bridge any potential knowledge gaps, said Lopez. Additionally, the organization can synthesize multiple data points into useful information for visitors.

During the visit, buyers also had the opportunity to see the feed crop being harvested in southern Texas, he said.

Prior this visit, members of the United Sorghum Checkoff Program had visited buyers in China, he said.

“China has come into the marketplace and made the competitiveness of the sorghum crop a little higher,” he said. “We hope to kind of continue that, we’d like to see more of that advantage going back to the producers.”

Market development and expansion

There have been some questions this year about the strength of the sorghum export market said Lopez.

“This year there has been a lot of discussions that sorghum exports haven’t been as strong, but feel that they have been,” he said.

Thus far, in the marketing years about 186m bushels have been sold, or about 40% of the crop year to date, he said. Last year about 52% of the crop was exported overall, and, the majority of that, about 80%, went to China.

Much of the work to develop the market for sorghum in China started with an initial push in 2009 and 2010, said Lopez. At that time, the US Grains Council assessed the market for the feed grain in China and the checkoff program started to share information about crop production and use.

“It’s been developing since then, and in 2010/11 those were really the first purchases that occurred,” he said. “[Sales were] about 44% of the crop, through 2014/15, when they purchased a large amount of the sorghum going out – 84% of the crop was shipped out and sold to China.”

Looking forward there continues to be potential for expanding the market for sorghum, said Lopez. “The total need for grain continues to increase as China sees more of its population meeting the middle class,” he added.

As the middle class grows, the interest in animal proteins expands and more grain is needed to meet the increased production demand, he said. 

The checkoff also has been supporting research efforts to demonstrate use of the feed grain in production systems relevant to the Chinese market, said Lopez. The organization has been running a sorghum feeding trial for ducks in China to show how it can be used in diets.

However, the group is not only focused on the poultry market, he said. They have been working with pork and dairy producers as well.

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