Sorghum, an opportunity to sell to China in a market with few players

The Asian giant is the world's largest demander of the grain and the United States its main supplier.?The northern country with Argentina and Australia, concentrate 97% of exports.

Since its international boom in the mid-1970s and 1980s, sorghum has been reduced to a limited number of producing countries that are bidding to supply the Chinese market.?Currently.?97% of world cereal trade is accounted for by the United States, Argentina and Australia?.

The USDA estimates that for the 2022/23 campaign, the United States will account for 65% of exports and China will account for 88% of?global sorghum?imports .?Argentina aspires to occupy the second place as world grain exporter, reaching 22% of sales, with a volume of 2.5 Mtn?, according to USDA projections or 2.3 Mtn according to estimates by the Stock Exchange of Rosario (BCR),

97% of world sorghum exports come from the United States, Argentina and Australia?.?“The rest of the global weight producers, such as Nigeria, Sudan, Mexico, Ethiopia or India, allocate all their production to the domestic market and in fact have slight annual import needs, without the possibility of exporting in the short term in view of of the importance of livestock in these countries”, explained BCR analysts Guido D'Angelo, Alberto Lugones and Julio Calzada in a recently published report.

As they pointed out, the sorghum that China buys from the United States is more expensive than that purchased in Australia and Argentina, “Globally, the main sorghum exporters have not changed.?Likewise, and at least?in the short term, a change in the main players in the world trade of sorghum does not seem very likely either?”, indicated the BCR technicians.

In terms of imports,?Japan continues to be a sorghum importing country, although to a much lesser degree than in the past?, since in recent years its domestic consumption of the grain has fallen substantially.?Mexico increased its production and, consequently, lowered its need for imports.?Meanwhile, the European Union balanced its production with its consumption, reducing its imports.?"In many cases?, the decrease in demand from these countries is explained by the replacement of sorghum with corn?," they said from the BCR.

China is the main demander of sorghum worldwide with a sustained growth in its purchases since 2012?, both for animal feed and for the production of Baijiu, a spirit drink.?"The Asian giant has support prices for corn, which increases costs forward in the production chain, which is why it is replaced in many cases with sorghum for fodder use," explained the analysts from Rosario.?"Given the high and strategic levels of corn stocks held by China, any potential release of these would drive sorghum demand substantially down," they added.

The United States is China's largest supplier?"although in recent years?Argentina has managed to sit at the small table of suppliers to the Asian giant's market?," they highlighted in the BCR.

And they stressed that?Argentina must be attentive to the movement of markets and geopolitics "to take advantage of potential opportunities?and strengthen its role as a global food supplier."

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