This week, Beijing called major importers to meetings and suggested they halt purchases of barley and sorghum. | Representative photo: Bloomberg
China is asking domestic traders to buy less foreign grain as abundant supplies and weaker-than-expected demand weigh on prices and threaten its long-standing policy of supporting local producers.
According to people familiar with the matter, Beijing summoned major importers this week and suggested they halt purchases of barley and sorghum. The move, which is expected to see a record grain harvest this year, is the latest effort by China to ease a domestic supply glut and bolster local prices.
China is the world’s biggest buyer of barley and sorghum, and any sustained import restrictions would deal a blow to farmers in major exporters such as Australia and the United States. Earlier this year, authorities asked traders to limit overseas corn purchases as local supplies increased.
The Asian powerhouse is facing an economic slowdown and a loss of confidence as rising living standards show signs of stalling. Authorities have stepped up oversight and so-called “window guidance” on raw material imports in recent years, hoping to reduce the impact of wild fluctuations in global prices on domestic processors and consumers.
Shipments of barley and sorghum that have already been booked are not affected, and the new measures will likely affect arrivals starting in November and continuing into the first quarter of next year, said the people, who asked not to be identified because they were not authorized to speak publicly about sensitive issues. Most of the cargoes currently booked will be delivered in October and November, they said.
The National Development and Reform Commission, China’s state planning body, did not immediately respond to a message seeking comment.
China imports sorghum and barley to feed its vast livestock, primarily as a substitute for corn. Higher-quality barley is also used to make beer. Beijing manages overseas purchases of corn and wheat through a system of annual tariff quotas, but there is no official quota for barley and sorghum.
Prices of corn, sorghum and barley in China are near their lowest level in more than three years. Corn stocks at ports in the south of the country are near their highest level in two years.
Sorghum imports totaled 5.21 million tonnes during the first seven months of 2024, nearly double the volume of the same period last year. U.S. supplies accounted for more than 80 percent of the total. Barley purchases rose 67 percent, with most coming from Australia after Beijing lifted a ban on shipments.
First published: August 28, 2024 | 10:44 PM IS
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