US sorghum armada U-turns at sea after Chinese tariffs


Several ships carrying cargoes of sorghum from the US to China have changed course since China slapped anti-dumping deposits on US imports of the grain, trade sources and a Reuters analysis on export and shipping data showed.

Sorghum is a niche animal feed and a tiny slice of the billions of dollars in exports at stake in the trade dispute between the world's two largest economies, which threatens to disrupt the flow of everything from steel to electronics.

The supply-chain pain felt by sorghum suppliers in the Pacific, Atlantic and Indian oceans underscores how quickly the mounting trade tensions between the US and China can impact the global agricultural sector, which has been reeling from low commodity prices amid a global grains glut.

Twenty ships carrying over 1.2 million tons of US sorghum are on the water, according to export inspections data from the US Department of Agriculture's Federal Grain Inspection Service.

Of the armada, valued at more than $216 million, at least five changed course within hours of China announcing tariffs on US sorghum imports on Tuesday, Reuters shipping data showed.

The five shipments, all headed for China after being loaded at Texas Gulf Coast export terminals owned by grain merchants Cargill or Archer Daniels Midland (ADM), found out they would be liable for hefty deposits to be paid on top of their total values, which could have made the loads unprofitable upon delivery.

Traders said Cargill and ADM likely sold most of the grain in the cargoes that are on the water.

In a statement to Reuters on Thursday, Cargill confirmed it is the exporter. ADM representatives declined to comment.

Industry sources in China said some of the cargoes might be redirected to Southeast Asian countries to feed hog and poultry at plants owned by Chinese feed producers. However, those countries and others in the region are small importers of sorghum. China imported more than 5.2 million tons last season, nearly 10 times more than No.2 importer Japan.


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