China is asking domestic traders to buy less foreign grain as abundant stocks and weaker-than-expected demand weigh on prices and threaten its long-standing policy of supporting local producers.
This week, Beijing He called major importers for meetings and suggested they halt purchases of barley and sorghum, according to people familiar with the matter.The move, ahead of a forecast record grain harvest this year, is the latest effort by China to alleviate the domestic oversupply and strengthen the local prices.
China is the world’s largest buyer of barley and sorghum, and any sustained restrictions on imports would be a blow to farmers in major exporters such as Australia and USAEarlier this year, authorities asked traders to limit overseas purchases of corn as local supplies grew.
The powerful Asian country is battling an economic slowdown and waning confidence as rising living standards show signs of stagnating.Authorities have stepped up oversight and so-called “window guidance” on raw material imports in recent years, hoping to reduce the impact on domestic processors and consumers of large fluctuations in global prices.
Shipments of barley and sorghum that have already been booked are not affected, and the new measures would likely affect arrivals from November and into the first quarter of next year.the people said, asking not to be identified because they were not authorized to discuss sensitive issues publicly. Most of the cargoes currently booked are for delivery in October and November, they said. The National Development and Reform Commissionthe state planner of Chinadid not immediately respond to a message seeking comment.
China imports sorghum and barley to feed its huge herd of cattle, mainly as a substitute for corn. The barley of higher quality is also used to make beer. Beijing manages the foreign purchase of corn and wheat under an annual tariff quota system, but there is no official quota for barley and sorghum.
The prices of the cornsorghum and barley in China are all close to the lowest level in more than three yearsCorn stocks at ports in the south of the country are close to their highest level in two years.
Sorghum imports were 5.21 million tonnes in the first seven months of 2024, almost double the volume in the same period last year. Supplies of USA accounted for more than 80% of the total. Purchases of barley increased by 67%, with the majority coming from Australia after Beijing lifted a ban on the shipments.
