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Global Sorghum Production is Booming Due to Strong Demand in China


Global Sorghum Production is Booming Due to Strong Demand in China

IndexBox has just published a new report: ‘World – Sorghum – Market Analysis, Forecast, Size, Trends and Insights’. Here is a summary of the report’s key findings.

In 2021, global sorghum production will grow by 5%, boosted by growing supplies to China. Sorghum imports to the country are expected to rise by 28% compared to the previous year, driven by the increasing demand for animal feed. Prices will continue to rise in line with other cereals, following accelerated food inflation. The advantage of sorghum as a more drought-tolerant crop will allow this product to compete seriously with corn and will further stimulate market expansion.

Key Trends and Insights

In 2021, global sorghum production is expected to increase by 5% y-o-y to 61.2M tonnes, thanks to the expansion of cropland and expected favorable weather conditions. The largest crop gains are expected in Argentina (+30% y-o-y), where the crop area increased by 27% y-o-y, as well as in the U.S. (+14% y-o-y) and Mexico (+17%), which expanded sorghum fields by +14% y-o-yand 4% respectively.

Global sorghum exports are expected to grow by 23% y-o-y, primarily driven by China’s continued massive grain purchases for animal feed. According to USDA forecasts, imports to China will increase by 28% y-o-y by the end of 2021 due to the increased demand for animal feed.

In the context of strong demand, prices for sorghum are expected to rise alongside other rising grains. Global food inflation is accelerating due to rising demand for food and animal feed, as well as the increased ethanol and renewable fuel production. In the U.S., a leading producer country that supplies 74% of sorghum to the global export market, the season-average farm price per product increased from $103 per tonne in September 2020 to $155 per tonne in April 2021.

According to forecasts by IndexBox, the sorghum market will continue to grow during the next decade, primarily due to the growing demand for livestock feed worldwide. An increase in demand for gluten-free products in a growing population may be an additional stimulus for market development since sorghum is the main component in such products. Sorghum can compete with corn as an alternative and more drought-resistant crop, which in the context of global climate change is also becoming a stimulus for the development of the sorghum market.

Global Sorghum Production

Global sorghum production stood at 58M tonnes in 2020, therefore, remained relatively stable against 2019. In value terms, sorghum production skyrocketed to $30.5B in 2020 estimated in export prices.

The countries with the highest volumes of sorghum production in 2020 were the U.S. (8.4M tonnes), Nigeria (6.5M tonnes) and Ethiopia (5.6M tonnes), together comprising 35% of global production. From 2012 to 2020, the biggest increases were in Ethiopia, while sorghum production for the other global leaders experienced more modest paces of growth.

Global Sorghum Imports

In 2020, purchases abroad of sorghum increased by 22% to 6.6M tonnes, rising for the second consecutive year after six years of decline. In value terms, sorghum imports skyrocketed to $1.6B (IndexBox estimates) in 2020.

China dominates sorghum import structure, reaching 4.8M tonnes, which was approx. 73% of total imports in 2020. It was distantly followed by Japan (382K tonnes), making up a 5.8% share of total imports. Mexico (232K tonnes) followed a long way behind the leaders.

In value terms, China ($1.2B) constitutes the largest market for imported sorghum worldwide, comprising 71% of global imports. The second position in the ranking was occupied by Japan ($85M), with a 5.2% share of global imports. It was followed by Mexico, with a 4.4% share.

In 2020, the average sorghum import price amounted to $249 per tonne, approximately mirroring the previous year. Prices varied noticeably by the country of destination; the country with the highest price was Mexico ($313 per tonne), while Spain ($205 per tonne) was amongst the lowest.

Source: IndexBox Platform

TeleSense Addresses Global Grain Ecosystem Challenges

Grain spoilage may soon be a thing of the past for global grain operators and transporters. IoT tech innovator TeleSense recently announced its acquisition of Danish wireless sensor technology company, Webstech. Through this acquisition, TeleSense announced it will amp up IoT efforts as it now has access to the largest global remote-sensed dataset and plans on integrating Webstech’s industrial automation capabilities, solar/battery power functionality and sensor spears to its current solution.

“Spoilage and energy optimization in drying grain continue to be multi-billion dollar issues; TeleSense provides the data insights needed for players throughout the global grain ecosystem to improve safety and profitability,” TeleSense CEO Naeem Zafar said. “The acquisition of Webstech greatly accelerates our entry into the European market and provides millions of additional historical data points to further refine our machine learning technology and predictive algorithms.” 

The TeleSense GrainSafe™ AI platform serves the grain supply chain as a scalable solution through monitoring temperature and humidity levels and providing real-time view of the stored grain to ensure quality conditions are maintained. With this innovative, portable, and wireless solution, the company is ready to expand its presence beyond the U.S. and Australia and make its entry in the European regions.

“How grain is stored, handled and traded in the years to come will change as new IoT-enabled technologies take hold throughout the supply chain,” added Peter Votkjaer Jorgensen of Maersk Growth Ventures. “We think that this acquisition by TeleSense will accelerate the mission of higher sustainability and efficiency in the grain supply chain.”

The company also confirmed it will expand with a new Denmark office and onboard two new additions to the team. Maersk Growth Ventures’ Peter Votkjaer Jorgensen will serve on the Board of Directors of the newly created TeleSense Europe ApS subsidiary and Webstech’s CEO Thomas Kylling will serve as managing director for TeleSense’s European team.

“After operating in the European remote sensing space for almost a decade, I was absolutely blown away by TeleSense’s integration of data science with an IoT solution for grain,” noted Kylling. “I think that TeleSense will help drive the automation of the grain supply chain, and I’m excited to help lead the effort in Europe.” 

Case Study Reveals Bulk Terminal Pest Challenges

Information released in a case study by bulk terminal operator, HSE at Terminales Marítimos de Galicia (TMGA), is urging other terminal operators to reconsider their approach to effective pest control, as cargo fumigation isn’t making the cut and leaving too much risk for infestation. One of the causes identified is the presence of Weevils left behind long after lots have been shipped.

“We are finding that the pupae and larvae inside maize kernels in various consignments, and which were subjected to in-transit fumigation, are not affected by phosphine or phosphine generating fumigants and growing into weevils while cargoes are in storage,” said Javier Quintero Saavedra, head of HSE at Terminales Marítimos de Galicia (TMGA).

“Bulk terminals need to implement a fully integrated pest management plan. Operators must monitor silo temperatures and moisture and be able to spot insect and larvae infestations in large storage premises. They should also carry out regular cleaning of empty stores and better understand the use of different pesticides and their effects,” Saavedra added.

Balancing pest management while ensuring safety measures are in place is another challenge identified in the case study – which will be presented by Saavedra at this year’s  Association of Bulk Terminal Operator’s (ABTO) conference – Bulk Terminals,  in October.

“While grain cargoes are usually fumigated at origin or in-transit if larvae survive and evolve it can be a real issue for terminal operators,” ABTO CE Simon Gutteridge said. “It can write-off the whole consignment. There is obviously a strong case for fumigating cargoes stored in silos at discharge ports, especially where maize kernels are stored, but this is not without its own problems.”

As phosphine and methyl bromide are known as top chemical choices for fumigation, both are linked to high-risk health hazards including acute intoxication, hypoxia, asphyxiation, seafarer fatalities, and run the risk of leaks to other facilities. This risks and more will be discussed in detail during Saavedra’s presentation covering port-side fumigation.

“There are IMO guidelines for the use of pesticides in-transit, but the rules governing their use in storage facilities ashore is at national level. Although the European Commission oversees the approval of active substances, it is the individual state that decides whether to allow their use or not,” said Saavedra. “What the bulk terminals industry needs is more globally-focused best practice guidelines, an initiative supported both by ICHCA and ABTO.”