Chinese demand a trump card for sorghum

Chinese demand boosts Aussie sorghum prices by $40/t


Chinese buyers are keenly snapping up Australian sorghum.

Chinese buyers are keenly snapping up Australian sorghum.

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US sorghum is on the nose with Chinese buyers and Australian growers are reaping the benefits.

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THE AUSTRALIAN sorghum industry is reaping the benefits of the tensions on the trade front between China and the US.

Solid demand from the Chinese baijiu industry for Australian sorghum has seen prices lift around $40 a tonne over the past six weeks.

Current sorghum quotes are at around $330/t delivered Darling Downs.

Wayne Newton, AgForce grains section president, said with the Aussie sorghum harvest around 80-90pc complete, most farmers felt the price was right to sell.

“It’s a fairly good price and farmers are moving to sell down their on-farm stocks,” he said.

Mr Newton said the message from the market was that the Chinese were looking to source sorghum from other origins than the US, even at a higher price.

He said there was no reason why a similar scenario to 2013-14, when Chinese demand accounted for nearly all the Australian crop, could not occur.

“I’m hearing there’s a lot of interest in containerised exports for baijiu and even some bulk for feed stock,” he said.

Baijiu is a Chinese alcoholic drink generally produced from sorghum.

Andrew Jurgs, Emerald Grain commodity trader, said estimates were for an Australian sorghum crop a touch less than 1.4 million tonnes.

“With harvest around 80-90 per cent done it seems likely total production will be slightly lower than we thought,” he said.

He said along with Chinese demand, lower production and the lack of rain to kick off a winter plant were also supportive of the market.

“We’ve got the trifecta of demand, lower summer crop production and potential lower winter crop production pushing values up.”

Mr Jurgs said the Chinese demand had basically priced out local end users.

“The price scenario at present means the end users are looking to white grain.”

AgForce grains president Wayne Newton says grain producers are generally pleased with sorghum prices on offer at present.

AgForce grains president Wayne Newton says grain producers are generally pleased with sorghum prices on offer at present.

Mr Newton said he had heard of some livestock businesses taking it a step further.

“The story goes that at least one end user has gone back to the market and sold the sorghum they were holding, gone out and bought white grain as a substitute and banked a little profit,” he said.

In terms of production, Mr Jurgs said parts of the Darling Downs had average crops, however Central Queensland was disappointing following late planting rains.

Mr Newton confirmed this.

“There weren’t too many bumper crops out there but for those who have had an average year the gross margins are solid given the price.”

He said there were some quality issues caused by the tough season.

“There were some issues with test weights in particular.”

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