Phase One Trade Deal Lifting Sorghum Prices Higher

WASHINGTON, DC – China’s announcement of tariff exclusions following the Phase One agreement had an immediate impact on U.S. sorghum exports mainly because of the sheer volume China purchases and its effect on prices.

According to a study from the Foreign Agriculture Service (FAS), sorghum export commitments from the U.S. have more than doubled the entire volume sold in 2018/2019, are actually expected to hit the bar set back in 2017/2018.

The number one buyer of sorghum is China, now responsible for 75 percent of all U.S. commitments. What does this mean for prices? Usually, sorghum prices track right along with corn, selling at a slight discount. This year however, sorghum prices have rallied and hit their highest levels since July 2015.

Since domestic acres have fallen over the past few years, and U.S. farmers supply the majority of China’s demand – which is leading to a supply shortage – prices could strengthen even further as the harvest begins in the next few weeks.
(SOURCE: Foreign Agricultural Service)