Australian sorghum prices have risen to their highest level in four years and will continue to be supported by Sino-US trade conflicts. New South Wales-based AgVantage said Australian sorghum prices rose sharply over the past week to about 10 Australian dollars a tonne. The price of sorghum in Brisbane Port is as high as A $350 a tonne.
Australian sorghum crops are now on the market and prices are at their highest level in four years, Rabobank said. Export and domestic demand, combined with lower-than-average unit production, has contributed to a 4 percent rise in sorghum prices in March and has risen 25 percent so far in 2018, up 33 percent from a year earlier.
Many factors are still conducive to higher sorghum prices. AgVantage said short-term support came from strong domestic and export demand. In Australia, demand for sorghum fodder was boosted by poor wheat harvests in 2017 / 18, when dry weather and late frost led to a decline in wheat production and farmers in the east needed grains.
At the same time, Chinese importers are worried about difficulties in purchasing sorghum from the United States, boosting Australia`s sorghum exports.
China`s government announced an anti-dumping investigation into U.S. sorghum shipments in February after the United States imposed tariffs on Chinese solar panels and washing machines. The junior high school trade conflict escalated this month, with China`s government imposing tariffs on some U. S. goods, including sorghum. ABN Rabobank said China`s investigation into U.S. dumping of sorghum would support current Australian sorghum prices.
Sorghum demand in China is especially supported by strong demand for liquor. China`s sorghum feed consumption in 2018 / 19 was 6.3 million tons, according to a counselor`s report released by the U.S. Department of Agriculture`s overseas Agriculture Agency. But sorghum consumption and industrial consumption are expected to hit a 22-year high of 2.8 million tons, an increase of two hundred thousand tons over 2017 / 18, as sorghum demand in the liquor industry is expected to increase to meet strong demand. In 2017, liquor demand surged 77 percent. It was the biggest increase since 2011. Strong liquor sales during the Spring Festival in early 2018 resulted in a steady rise in retail prices and lucrative profits for many producers. Guizhou Maotai Group expects liquor demand to increase by 10% this year. The surge in demand is partly due to higher incomes for Chinese consumers.
China is the world`s leading sorghum importer and needs sorghum to produce liquor. Australia is the world`s second largest sorghum exporter, after the United States.
