China's sorghum consumption, inventory and safety factor (April 2018)

By CnAgri2018-08-15 16:38:55 Print In June 2018, the output of Chinese liquor was 836,000 kiloliters (65° the originals), down 0.90% year-on-year; and the cumulative output was 4.929 million tons, decreasing by 5.8% year-on-year. According to BOABC’s monitoring data, the monthly output was down by 34.33%, and the cumulative output decreased 23.71% year-on-year. Calculated at the 65% liquor, the consumption of grain for making liquor was 904,200 tons per month, of which sorghum consumption was 180,000 tons. In the month, the imports of sorghum were 450,000 tons, most of which was used for feed processing. The consumption of sorghum for feed reached 603,000 tons.
From January to June, the total import volume of sorghum was 5.25 million tons, up 8.71% year-on-year; liquor consumption demand was restrained by sharp growth in domestic sorghum prices. The total consumption of sorghum for liquor brewing was 1.134 million tons, down 23.71% year-on-year; the total consumption of sorghum for feed was 2.84 million tons, a year-on-year increase of 4.31%; total domestic consumption of sorghum reached 4.125 million tons, down 4.91% year-on-year.
Considering other consumptions and exports, sorghum consumption in the month amounted to 813,000 tons, and the monthly safety factor was 4.48%. It’s expected that the ending inventory will be 3.645 million tons. 
Supply and demand analysis from August 2017 to July 2018: sorghum production and imports were 3.06 million tons and 6.888 million tons respectively, of which, 2.879 million tons was used for brewing liquor. The national production is sufficient for liquor production, and high imports were mainly used for feed consumption. The total consumption of sorghum is expected to be 8.199 million tons. The ending inventory was 5.01 million tons, and the safety factor was 61.1%. The annual price of sorghum reached 2,442 yuan/ton, and the import price (CIF) was 1920 yuan/ton.
Supply and demand analysis from August 2018 to July 2019, the output is expected to increase further to 3.15 million tons. The import cost will continue to be lower than the cost of transporting the northeastern and Huang-huai-hai corn to the southern ports, so coastal enterprises mostly choose to import sorghum. The total consumption and the ending stock will be about 10 million tons and 5.65 million tons respectively, and the safety factor will reach 56.90%. Large imports have suppressed domestic corn market and sorghum market.
The import cost is lower than the cost of transporting the northeastern corn to the southern ports. Transportation and circulation costs have greatly pushed up the cost of transporting grains in the Northeast and Huanghuaihai to the southern coastal cities, resulting in a large amount of grain imports. Reducing domestic logistics cost is crucial for realizing domestic regional economic balance. At present, we must strengthen domestic reform and adjustment to open up to the outside world, effectively reduce domestic management and logistics costs, otherwise, the balanced development of regional economy will be seriously affected by opening up.