United States sorghum shipments to China have been rerouted to Spain, as the result trade tensions between the United States and China. The U.S. Grains Council (USGC) played a role in the redirected shipments of grain.
Kurt Schultz, U.S. Grains Council senior director of global strategies, talks about the Council’s recent trade mission to Spain. Schultz says the group planned to travel to China, but rerouted the trip at the last minute due to trade tensions with China.
“With current trade relations with China, we were getting indication that things weren’t going to go very well, in the long-term, for that market for us, so we started looking at where alternative markets would be for us, if China stopped buying U.S. sorghum,” Schultz said. “Mexico, Spain and a couple other markets have always been key destinations for sorghum, (but) not in large volumes. (They) certainly can’t replace the volume of the Chinese market, but we recognized that we needed to start planting the seeds in some of these other markets, in case things changed with the Chinese market.”
Schultz says the U.S. Grains Council is fortunate for the redirected trade mission.
“After the team returned, we had the cancellation of all these sales of sorghum going into China. They were vessels en route. Several of those vessels were actually sold into Spain as a result,” Schultz said. “It was just very fortunate timing. It’s not good news for U.S. exporters in general. The Chinese market is a premium market for them. It’s a reliable and very important market. In one sense, it’s a loss. At the same time, it was a good investment of our resources and getting this team into Spain at that time.”
Schultz adds U.S. sorghum producers will need to find several other markets, in an effort to replace the value of the Chinese market for U.S. sorghum. China is the top destination for U.S. sorghum, receiving roughly 70% to 80% of U.S. sorghum exports. Last year, the U.S. exported about 4.5 million tonnes of sorghum to China.