Saturday 23 / November / 2024
Beijing: Some Chinese sorghum importers have asked Beijing to waive the hefty anti-dumping deposit imposed last week on US imports already at sea, as companies rushed to sell stranded China-bound cargoes that were on the water at big discounts.
China's Commerce Ministry slapped a 178.6 per cent deposit starting from April 18 on imports of sorghum from the United States in a trade row between the world's two biggest economies. Sorghum is a grain used in animal feed and to make beverage.
One sources said his company was asking Beijing to impose the new tariffs only on cargoes loaded at US ports after April 18, in a bid to protect almost a dozen vessels carrying US sorghum that have already started sailing.
A second source at a private importer based in eastern China said a group of companies, including at least one state-owned firm met Commerce Ministry officials to discuss concessions for the new tariff, but did not disclose details of the meeting.
The sources declined to be identified due to the sensitivity of the issue.
Traders have said it was not clear if the deposit would be refunded in future, after being paid to the government. But they said that, even if it was returned at some point, raising the funds now was adding crippling costs to the business.
The Commerce Ministry did not respond to a request for comment.
The scramble to secure government concessions underscores concerns among Chinese firms that the trade dispute between Washington and Beijing will inflict financial pain on China, as well as its biggest trading partner, the United States.
It threatens to disrupt supplies of critical ingredients for China's vast agriculture sector.
Chinese importers will likely have to pay the deposit and face the biggest risk from the levy. With the deposit, an average cargo of 60,000 tonnes of sorghum is now worth about $27 million, almost double the value before the scheme.
News of the levy, which is high enough to bring trade to a halt, has prompted some vessels carrying US sorghum to change course and forced many frantic importers to find new buyers outside China for their grain.
Multiple grain traders based in Asia said importers are rushing to sell stranded shipments at big discounts. Prices were as low as $150-$160 per tonne, well below the $230-$240 before Beijing's move last week to impose the deposit.
Buyers in the Middle East and South East Asia were in the market looking for bargains.
A ship carrying 69,842 tonnes of sorghum from the United States bound for China switched its destination on Tuesday to Dammam, Saudi Arabia, according to Thomson Reuters Eikon ship tracking data.
"Now we have no choice but to try resell to other countries," said the second source, who had 600-tonne cargo of the grain dock at a Chinese port the day before the duty came into effect.
He said he had agreed to sell it for $160 per tonne to a buyer in the Philippines.
"The value of the grain would be 900,000 yuan ($142,000), but the deposit itself would be more than 1.4 million yuan," he said.
