INTERNATIONAL demand for sorghum is increasing, with China's increased appetite for feed grain one of the key factors, according to a senior grains executive at Toepfer International.
Speaking at last month's Global Grains Asia conference in Singapore, Toepfer senior grains manager Pablo Altuna, based in Buenos Aires, Argentina, said increased Chinese demand was making sorghum attractive for growers across the globe.
And Australia has a chance to extract more premiums from the sorghum boom, as it is well positioned in the relatively small human consumption sorghum market.
Commodities manager at NZX Ron Storey said China had emerged during 2012-13, taking a whopping 700,000 tonnes of Australian product.
"This product has gone out in containers and is used to make a spirit (baijiu)."
Mr Storey said the jury was out on whether the Chinese baijiu market would continue to see Australian sorghum trading at the record levels of last year, but he said it would tighten up the feed grain market in northern Australia.
"There probably just won't be the grain this year for that much sorghum to be exported, but reports (suggest) there is still a significant amount set to be exported."
Mr Altuna said this would have a significant impact on the supply and demand set-up in Australia, which had traditionally exported as much as half of its crop, with average production of about 2.25 million tonnes.
He said the US had also done trade with China in the past two years, which changed the sorghum market there.
"If China continues to buy these volumes of sorghum, it will be more attractive for US growers to increase their acreage, especially in key States like Kansas and Texas."
He said Argentina was an important sorghum exporter, sending grain to other South American countries and Japan.
At present, China was not buying Argentine sorghum, but Mr Altuna said if that changed, growers there would be happy to grow the crop as it was not subject to government tariffs.
"Prices are close to corn and there is much less input cost involved."
He said with the potential to increase production limited in Australia, large scale import demand would most come from the US and Argentina.
A host of African nations featured in the top 15 sorghum producers worldwide, but this was largely consumed domestically, he said.
Gregor Heard
National grains writer for Fairfax Agricultural Media.
National grains writer for Fairfax Agricultural Media.
