China drops US sorghum probe, in move seen as conciliatory gesture
Beijing — China scrapped an anti-dumping and anti-subsidy probe into US sorghum imports as the two countries seek to resolve a trade dispute.
The investigation was not in line with public interest, China’s Ministry of Commerce said on Friday.
The Asian country announced the probe in February and in April imposed a 178.6% anti-dumping deposit. The ministry said it would return the deposits.
Authorities had found the investigation "will increase costs for downstream breeding sector as well as living costs for a majority of consumers", the ministry said.
It cited a decline in pork prices and the country’s money-losing breeding sector as the reason for scrapping the probe.
China’s anti-dumping deposit has roiled sorghum trading for the past month as buyers scrambled to resell more than 20 cargoes of US grain.
The end of the investigation comes after China offered US President Donald Trump a $200bn reduction in its annual trade surplus with the US by increasing imports of American products and other steps, according to an administration official who spoke on the condition of anonymity.
Other moves — including restarting a review of Qualcomm’s application to acquire NXP Semiconductors — may signal a more conciliatory stance between the countries.
"It is a gesture from the Chinese side," said Yan Zhang, an analyst at Shanghai JC Intelligence.
Some of the cargoes that were heading to China were resold at discounts of 30%-40%, incurring huge losses for domestic companies, she said.
China may also consider removing its tariff on US distillers’ dried grains, she said.
China imported about $957m of US sorghum in 2017 and purchases fell 15% in the first quarter of this year from a year earlier, according to customs data.
Farmers had used the grain in animal feed in place of domestic corn, which climbed 20% last year. Pig prices in the world’s biggest pork consumer and producer have slumped more than 30% this year.
Agriculture traders will now be looking for clues on any further easing of tariffs.
The Wall Street Journal reported this week that the US and China are closing in on deal that would give ZTE a reprieve from sanctions in exchange for the Asian country removing tariffs on billions of dollars of US agricultural products.
China is the largest buyer of American soybeans in trade that was worth $14bn last year, and has been shunning US supplies amid uncertainty over whether it will follow through with a planned 25% tariff.
While the move would please US sorghum farmers, China’s soy buyers remained cautious, said Paul Burke, North Asia regional director for the US Soybean Export Council.
"I do not think importers will begin buying soybeans until there is a clear statement from the Chinese government that they will not impose a 25% duty," he said in an e-mail.
Soybean meal on the Dalian Commodity Exchange fell as much as 1.8% before trading 0.7% lower at 2,955 yuan ($464) a tonne.
Chinese maize futures fell as much as 0.9% before trading little changed.
Soybeans on the Chicago Board of Trade rose 1% to $10.05 a bushel.