Beijing approves Brazilian sorghum imports
On Wednesday, China and Brazil announced a long list of deals and breakthroughs as part of Xi Jinping's state visit to Brasilia.
One caught our eye in a big way: China opened its markets to imports of Brazilian sorghum.
Currently, China relies heavily on the US for its sorghum imports (Reuters 1):
- China is the world's largest sorghum importer, buying well over 80% of all sorghum sold on global markets for snack foods, livestock feeds, and alcohols.
- The US is the world's largest exporter – supplying roughly 56% of globally traded sorghum.
- Last year, China bought a whopping 90% of all US sorghum exports.
Brazil grows around 8% of the world's sorghum, but it's not a major exporter.
- Instead, Brazilian sorghum is used to feed livestock and produce ethanol domestically.
That could change fast if the US sparks another tariff war with China.
- Back in 2018, US sorghum was one of the first crops to face Beijing's retaliation – anti-dumping and anti-subsidy investigations resulted in a 179% increase in tariffs.
Get this: China has been quietly stocking up on sorghum for months.
There's precedent for how this could play out for US farmers:
- Back in 2022, China opened its markets to Brazilian corn – and by last year Brazil had displaced the US as China's largest corn supplier.
Get smart: This is a loud, clear signal that another trade war will have significant consequences for US farmers.
Get smarter: Most Brazilian sorghum is planted immediately following the soybean harvest – between late March and May.
- If the US-China trade relationship deteriorates rapidly, Brazilian farmers will reap the benefits in 2025.