BEIJING (Reuters) - China dropped its anti-dumping probe into imports of U.S. sorghum on Friday, beating a hasty retreat from a dispute that wreaked chaos across the global grain market and raised concerns about rising costs and financial damage at home.
The investigation launched in early February had quickly showed its top trading partner how much financial pain it could inflict on U.S. farmers, analysts said. Last month, Beijing also imposed hefty anti-dumping deposits on imports of the grain.
"Now they are showing goodwill by halting its anti-dumping investigation into sorghum imports, but it is a cheap way of showing goodwill as the U.S. does not have much sorghum left to export. The next U.S. sorghum crop will be harvested in August."
Agricultural products are considered one of the most powerful weapons in Beijing's arsenal because a strike against farm exports to China would hurt mostly states that backed U.S. President Donald Trump.
The United States accounts for more than 90 percent of total sorghum shipments to China, with imports from the U.S. worth just over $1 billion last year.
The deposit scheme disrupted supply chains worldwide, with almost two dozen ships carrying U.S. sorghum stranded at sea, as merchants and buyers scrambled to sell cargoes at big discounts elsewhere.
The probe had sparked worries that tariff-inflated costs for sorghum, used in liquor and animal feed, would be passed onto feedmakers and eventually inflate retail meat prices.
The ministry said it would return the deposits it had collected. The news brought some unexpected relief to Chinese buyers who still had cargoes stuck at ports.
"This is great news! We are now saved," said a private sorghum trader who had over 600 tonnes of U.S. sorghum stranded at a Chinese port. "We will clear our goods immediately today."
The United States shipped 4.76 million tonnes of sorghum to China in 2017, worth around $1.1 billion and making up the bulk of China's roughly 5 million tonnes of imports of the grain last year, according to Chinese customs data.
For many, though, the damage has been done. Archer Daniels Midland warned earlier this month it will take a $30 million hit to trading profit due to the dispute.
"The government won't compensate you for the losses out of reselling and demurrage."
(Reporting by Tony Munroe, Josephine Mason and Hallie Gu; Editing by Tom Hogue)
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)