China makes biggest U.S. sorghum purchase since April as trade talks resume

CHICAGO (Reuters) - China made its biggest purchase of U.S. sorghum since April last week, according to U.S. Department of Agriculture data issued on Thursday, as Washington and Beijing revive discussions to end their trade war.

FILE PHOTO: Bottles of the Chinese spirit baijiu are on display at a bar in Beijing, China June 22, 2017. REUTERS/Thomas Peter/File Photo

The world’s top sorghum importer bought 51,072 metric tons of the grain even though China imposed a 25% tariff on American shipments in July 2018 as part of the tit-for-tat trade dispute. The purchases will likely be used to feed livestock or make a fiery Chinese liquor called baijiu.

China has made other modest purchases of sorghum since the beginning of June.

The United States and China agreed last month to restart trade talks that stalled in May. U.S. President Donald Trump said at the time he would not to impose new tariffs and U.S. officials said China agreed to make agricultural purchases. But Trump said on July 11 that China was not living up to promises to buy U.S. farm goods.

U.S. farmers welcomed the latest sorghum sale as the crop was one of the first casualties of the trade war, which has also slowed exports of U.S. soybeans and pork to China.

“It’s still a good price for them even with the tariff,” said Don Bloss, a Nebraska sorghum farmer and past chairman of the National Sorghum Producers.

China, which is also the world’s top soybean importer, canceled purchases of 9,853 metric tons of U.S. soy last week, according to Thursday’s USDA data. It was China’s first weekly net cancellation of soybeans since April.

China bought about $839 million of U.S. sorghum in 2017, accounting for a whopping 80% of U.S. sorghum exports. But Beijing’s tariffs last summer slashed U.S. shipments to Chinese buyers.

With nerves on edge over when face-to-face talks between the United States and China will resume, Trump on Tuesday maintained pressure on Beijing with a threat to put tariffs on another $325 billion of Chinese goods.

U.S. and Chinese officials will hold a telephone call later on Thursday, and further in-person trade talks could be possible depending on how their discussion goes, U.S. Treasury Secretary Steven Mnuchin said.

In the sorghum industry, “the producers on this side and the buyers on that side are still friends,” Bloss said.

“It’s the governments that are getting in the way.”

Reporting by Tom Polansek in Chicago; Editing by Matthew Lewis