China makes biggest U.S. sorghum purchase since trade war began

CHICAGO (Reuters) - China bought U.S. sorghum for the first time since August last week, U.S Department of Agriculture data showed on Thursday, fueling hopes for more deals as Beijing and Washington seek to resolve their trade dispute.

FILE PHOTO: Workers shovel sorghum into a processing machine to make Chinese spirit baijiu at a brewery in Binzhou, Shandong province, China October 21, 2018. REUTERS/Stringer

The sale of 65,000 metric tonnes of U.S. sorghum marked China’s biggest purchase since Beijing imposed a 25 percent tariff on imports of American grains in July.

It was also China’s first purchase since the autumn U.S. harvest brought new sorghum supplies into the market and came as traders said state-owned Chinese companies had separately purchased at least 500,000 tonnes of U.S. soybeans.

U.S. President Donald Trump said on Wednesday that trade talks with China were moving along well and predicted either a “good deal” or no deal between the world’s two largest economies.

China, the world’s top sorghum buyer, bought about $839 million of U.S. sorghum in 2017, most of which was shipped in the months after the autumn harvest. That accounted for a whopping 80 percent of U.S. sorghum exports.

But Beijing’s tariffs last summer nearly halted U.S. shipments to Chinese buyers, who use sorghum to feed livestock and make a fiery Chinese liquor called baijiu.

Wayne Cleveland, executive director of Texas Sorghum Producers, an industry group, said he was fielding calls from sorghum growers and grain elevators seeking to confirm the USDA report of China’s purchase.

“This has generated a tremendous amount of excitement for our growers and the folks that sell grain,” he said. “There’s nothing like having China back buying.”

Tight supplies of sorghum in China may be behind the latest purchase, said Don Bloss, past chairman of the trade group National Sorghum Producers and a Nebraska farmer.

“They need grain real bad,” he said.

Reporting by Tom Polansek in Chicago; Editing by James Dalgleish