Move a 'legitimate' response to pressure
China's anti-dumping and anti-subsidy investigation into imports of U.S. sorghum is "legitimate" and may directly affect U.S. farmers, an expert told the Global Times on Tuesday, after the Ministry of Commerce (MOFCOM) announced it will slap a deposit rate of 178.6 percent on U.S. sorghum imports, effective from Wednesday.
Sorghum from the U.S. is being exported at a lower than normal value and has greatly damaged the domestic industry, according to a statement on the ministry's website. The investigation will continue and China will issue a final ruling at a later date, the statement said.
China's provisional anti-dumping ruling on U.S. sorghum imports is in line with WTO rules and China's laws, an official from MOFCOM said.
"China has always opposed the abuse of trade remedy measures and advocates conducting trade remedy investigations in accordance with the WTO rules and China's laws," said Wang Hejun, head of MOFCOM's Trade Remedy and Investigation Bureau.
The probe first started on February 4 when MOFCOM launched an anti-dumping and anti-subsidy investigation into U.S. sorghum.
The volume of China's imports of sorghum from the U.S. rose sharply from 2013 to 2016, with their market share in China surging from 8 percent to 61 percent, and the price dropped from 9.61 to 4.78 per ton, according to MOFCOM, citing statistics from China's customs authorities.
MOFCOM said at the time that the domestic sector was being "substantially damaged" by U.S. sorghum imports that were being dumped into the country.
"China is willing to cooperate with the U.S. to narrow the differences in the trade field and jointly safeguard the trade cooperation between the two countries," Wang said.
Jiao Shanwei, editor-in-chief of Zhengzhou-based grain portal cngrain.com, told the Global Times on Tuesday that the move is a "legitimate measure," as well as an "effective way" to cope with the U.S. trade moves against China.
"With the 178.6 percent deposit rate, sorghum imports from the U.S. will no longer have their advantage in price. Chinese importers may choose not to use them at all in the end," Jiao said.
Jiao noted that in 2017, China imported 5.05 million tons of sorghum from the U.S. If the deposit rate remains in place, U.S. farmers will feel a direct hit.
"If they can't find customers, losses will be caused due to unsold sorghum," Jiao said, adding that it is possible that U.S. farmers will complain and ask for more subsidies from the U.S. government.
"There are five to six ships of U.S. sorghum on their way to China, which might be the last batch of imports not affected by the deposit rate," Jiao said.