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 isn’t in line with public interest, China’s Ministry of Commerce said in a statement on Friday. The Asian country announced the probe in February and in April imposed a 178.6 per cent anti-dumping deposit. The ministry said it will return the deposits.
Authorities found that 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 loss-making breeding sector as the reason for scrapping the probe.
China’s anti-dumping deposit roiled sorghum trading for the past month as buyers scrambled to re-sell more than 20 cargoes of US grain. The end of the investigation comes after China offered President Donald Trump a $200 billion 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 Inc’s application to acquire NXP Semiconductors NV, 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 Co. Some of the cargoes that were heading to China were resold at discounts of 30 per cent to 40 per cent, incurring huge losses for domestic companies, she said, adding China may also consider removing its tariff on US distillers’ dried grains.
China imported about $957 million of US sorghum in 2017 and purchases fell 15 per cent 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 per cent last year. Pig prices in the world’s biggest pork consumer and producer have slumped more than 30 per cent 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 Corp. 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 worth $14 billion last year and has been shunning US supplies amid uncertainty over whether it will follow through with a planned 25 per cent tariff.
While the move will please US sorghum farmers, China’s soy buyers remain 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 per cent duty,” he said in an email.
Soybean meal on the Dalian Commodity Exchange fell as much as 1.8 per cent before trading 0.7 per cent lower at 2,955 yuan ($464) a metric ton. Chinese corn futures fell as much as 0.9 per cent before trading little changed. Soybeans on the Chicago Board of Trade rose 1 per cent to $10.05 a bushel.