Mexico Interest In Sorghum Strong Despite Tight World Market

Attending the 2015 APPAMEX North American Export Grain Association (NAEGA) Forum last week in Puerto Vallarta, Mexico, U.S. Grains Council (USGC) representatives were peppered with questions about China, sorghum and the likely implications for Mexican buyers, showing strong interest the commodity despite China’s recent buying surge and its effect on world prices.

Attending the event on behalf of the Council were Julio Hernandez, USGC director in Mexico; Mike Dwyer, USGC chief economist; and Alvaro Cordero, USGC manager of global trade.

“Mexican end-users are intrigued by how China now controls the sorghum market, and they wonder what to expect in the next few months,” Hernandez said.

The surge in China’s sorghum imports is one of the most dramatic trade shifts of recent years. As recently as the 2012/2013 marketing year, when it took just 3,376 metric tons (132,906 bushels), China was a minor purchaser. As of Aug. 13 this marketing year, China has already purchased 8.1 million tons (318.9 million bushels).

Mexico, the traditional top purchaser of U.S. sorghum, has thus faced tighter supplies and higher prices with imports plummeting from more than 1.4 million tons (55 million bushels) during the 2013/2014 marketing year to almost nothing this year. This decline was more than offset by a jump in Mexico’s imports of corn from the United States, and it has led to intense interest among Mexican buyers about future developments.

“Mexican end-users are very interested in what is happening in China with sorghum,” Cordero said. “The more information we can get our customers in all of our markets, the better for them to understand how best to get the grains they need.”

In addition to the discussion on sorghum, Cordero and Dwyer presented an overview of the current status and major drivers in international grains markets today. Other speakers focused on a range of topics including Mexican warehouses and rail transport; efforts to increase the competitiveness of Mexican agribusinesses in global markets; and political factors in both the United States and Mexico that may affect near-term developments in the food sector.