Sorghum Market - Chinese Sorghum Liquor Ready to Fire Up the U.S. Consumers

Source: Ganbei Baijiu

Baijiu (pronounced "bye-joe") is a Chinese fermented sorghum spirit that is often mixed with glutinous rice, millet, wheat, or corn. A staple alcoholic beverage in China, baijiu liquor will soon be splashing into the U.S. market.

Baijiu is the world's best-selling spirit category. In 2012, distillers experienced losses due to the Chinese government's anti-graft measures that put state-sponsored meals practice to a screeching halt, provoking a dramatic decrease in domestic demand for baijiu. This led to Chinese producers turning to Western markets, the U.S. market in particular, in order to make up for losses and boost their sales.

Yet, the question remains open whether American consumers will appreciate the powerful firewater. The ingredients utilized in its making may seem strange to Western sensibilities, who are not accustomed to sorghum drinks. What's more, the production process of fermenting in mud pits, and ageing in large earthenware vessels lead to a spirit that abounds in unexpectedly bizarre aromas and flavors that may not be "a love at first taste" for many American drinkers.

However, it is fair to say that American tastes are adaptable to changes. Buckwheat beer, quinoa whiskey and spelt vodka serve are proof of people longing for exotic and unexpected blends. With this in mind, baijiu is likely to have a chance to win over the American consumer.

Although the Chinese sorghum spirit is only now making its way onto the U.S. market, these two countries have an already well-established sorghum trade connection. In 2014, the U.S. seized control of the global sorghum market, exporting 7,247 thousand tonnes of sorghum totaling 1,718 million USD, 203% over the previous year. Its primary trading partner was China, where it supplied 86% of its total sorghum exports in value terms, accounting for 90% of China's total imports.

From 2007 to 2014, the U.S. was a net exporter of sorghum. Over this period, exports consistently exceeded imports in value terms. In physical terms, outside of two years (2012 and 2013), this difference was even more pronounced.

Argentina and Australia were among the other main global suppliers of sorghum in 2014. However, the fastest growing exporters from 2007 to 2014 were Australia (+54% per year) and Ukraine (+36% per year). Australia, by virtue of this sustained growth, was able to strengthen its position in the global export structure.

In 2014, the U.S.'s top 5 trading partners were China, Mexico, Japan, South Sudan and Sudan, with a combined 95% share of the U.S. sorghum exports. The share of China skyrocketed (+86 percentage points), while the share of Mexico illustrated negative dynamics (-29 percentage points).

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Source: World: Sorghum - Market Report. Analysis And Forecast To 2020