CHAMPAIGN, ILLINOIS, US — Grain flows are continuing at near normal levels across the world despite the COVID-19 pandemic, and include increased shipments from the United States to China, according to the US Grain Council (USGC).
“We’re hearing reports from ports around world that they are largely operational,” said Ryan LeGrand, president and chief executive officer of the USGC, during a University of Illinois farmdoc webinar. “There may be some slowdown in receipt of vessels as they check crews. Some Chinese vessels into other countries are getting extra scrutiny right now. Around the world everything is operating pretty much normally when it comes to the shipment and receipt of grains.”
Normal buyers of US corn, such as Japan, Mexico and South Korea, have been active in the market, he said. Last week, corn shipments were at an 11-month high.
“We’re still off the USDA projections but seeing those upticks in corn shipments is a bright spot among all the bad news we’re seeing and hearing around the world,” LeGrand said.
Another bright point is the increase in US shipments to China, following the adoption of the phase one trade agreement that ended an ongoing dispute between the nations.
China made its single largest purchase of corn on record in the last seven years about 10 days ago. While the 756,000 tonnes of corn is not the highest on record, it is a promising sign, he said.
Last week a total of 250,000 tonnes of corn was sold to unknown destinations, and LeGrand said they suspect it is China taking advantage of the dip in the market. China also has bought 1 million tonnes of sorghum and he expects there will be more behind that.
“China made some serious commitments to the US and to the world in this phase one,” LeGrand said. “Going forward we expect them to make some drastic change on their acceptance and approval of new biotech traits. They have agreed to give an average of 24-month turnaround on approvals of any new events. If that holds, that is going to be a sweeping change for one of the largest consumers in the world. It will benefit us greatly.”
In addition to grain, LeGrand said the USGC expects China to be in the market for US DDGS and ethanol.
China is working to register US ethanol plants, which has to happen in order to resume DDGS exports there.
“They have the potential to import over 5 million tonnes, so that is a market where we need to continue to operate,” LeGrand said.
China has an anti-dumping and countervailing duty case against US DDGS but purchases of the ethanol coproduct were part of the phase one deal.
“We expect to see exemptions to duties that have been levied on our DDGS,” he said.
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