The grain industry is reacting to the “temporary” Chinese preliminary antidumping duty of 178.6% on sorghum shipped from the United States, announced April 17, 2018. Reuters reported that Chinese importers of sorghum, a grain used to create ethanol and feed livestock, have asked the government in Beijing to waive the duties. After the duties were announced, nearly two dozen ships carrying American sorghum changed course, opting instead for ports in Japan, Saudi Arabia, the Canary Islands, and the Philippines to mitigate losses. China is now importing relatively large quantities of barley as livestock feed and the Chinese importers who did receive sorghum shipments are selling that grain at an extreme discount in an effort to avoid the duty deposit.
The investigation into U.S. sorghum, initiated in February, found that U.S. exports to China increased over the last several years while prices fell and harmed China’s domestic industry. The National Sorghum Producers, an industry group in the United States, insists that the product is neither dumped nor injurious to the Chinese industry. The National Sorghum Producers also state that they fully cooperated with the Chinese government in the course of the short investigation, at the end of which adverse facts available were applied to result in the high margin.
Since China imposed the duties, American sorghum has all but been shut out of the Chinese market, which was the largest export market for U.S. sorghum and accounted for 77% of U.S. sorghum shipments between January and November 2017. China became the largest importer of American sorghum a few years ago when it sought an alternative to corn for animal feed and began buying the grain at a premium.
The White House called the Chinese antidumping case “unfair targeting of U.S. sorghum producers.” American exports of ethanol, one of the downstream products of sorghum, to China were stymied in early April by tariff increases that were part of China’s retaliation against President Trump’s 232 steel and aluminum protections. U.S. Trade Representative Lighthizer is reviewing the dumping duty and is prepared to challenge the tariff at the WTO “if appropriate.”