Photo/Shetuwang

Apr. 18 (NBD) -- China's Ministry of Commerce announced on Tuesday that the China Customs will charge importers a 178.6 percent deposit on the value of sorghum imports from the U.S. after an anti-dumping investigation found that U.S. sorghum imports severely hit the domestic market.

According to the ministry, the number of imported U.S. sorghum grew sharply in recent years, soaring to 4.758 million tons last year, with a 14-fold increase compared to 317,000 tons in 2013. 

Besides, the export price of U.S. sorghum to China declined by 31 percent to 200 U.S. dollars per ton in 2017 from 290 U.S. dollars in 2013, which led to a decrease of China's sorghum price and substantial damage to the industry.

The new move is likely to escalate trade tensions between the two economies.

On the same day of the new announcement, the U.S. Department of Commerce imposed a seven-year ban on the purchase of separate components, products, software and technology by Chinese telecom equipment manufacturer ZTE Corp. from U.S. companies. This is believed to negatively affect Chinese and U.S. enterprises along the industry chain.

In quick response, the spokesperson for China's commerce ministry said that ZTE has a deep tie with hundreds of U.S. companies and has created tens of thousands of jobs in the U.S. The spokesperson also urged the U.S. to properly handle the issue and create a fair, just, and stable legal and policy environment for all enterprises.

Bai Ming, deputy director of the International Market Research Department at Chinese Academy of International Trade and Economic Cooperation, MOC, told NBD that China's investigation into the U.S. sorghum imports is a protective measure against subsidizing behavior of the U.S. There is no evidence that China's preliminary anti-dumping ruling was made to respond to the ZTE issue.

China's farm product prices are significantly higher than those in the international markets, due to the high cost of agricultural production and limitation of natural conditions, said Wang Wei, analyst of Sealand Securities.

Moreover, the quota control of corn imports has caused the surging imports of the alternatives, such as sorghum and barley. 

In 2017, China's imports of sorghum and barley totaled 5.056 million tons and 8.863 million tons, respectively.

The high import volume of corn alternatives resulted in overstocking of corns in 2015.

Thanks to the supply-side structural reform, the supply-demand structure of the domestic corn market has seen great improvement. China's measures against U.S. sorghum imports will be helpful to reduce China's corn inventories and push up the corn price, enhancing the motivation of corn farmers, Wang noted.

 

Email: zhanglingxiao@nbd.com.cn

 
Editor: Zhang Lingxiao