Simulation of Chinese Sorghum Imports from a New Perspective: U.S. and Global Impacts

Abstract

This thesis aims to analyze the impacts on U.S. and global sorghum trade, and whether China will continue importing sorghum from the global sorghum market for feed use, if the Chinese government cancels its corn price support policy and corn temporary reserve program nationwide. This study uses the USDA-ERS China Model and the Country-Commodity Linked System (CCLS) to simulate the impacts on U.S. sorghum exports and the reduction of sorghum's global price, global production, and global trade volumes. The simulations are based on three scenarios: if China's sorghum import volume decreased by 50% from USDA-ERS's baseline projection, if China's sorghum import volume decreased by 35% each year from the previous year, and if China's sorghum import volume decreased by 70% from USDA-ERS's baseline projection in year one and by 90% from USDA-ERS's baseline projection in subsequent years.

The modeling system is a large scale multi-country and multi-commodity partial equilibrium dynamic simulation model which solves for global prices and trade using individual country models. Policy instruments are applied to the China model and solved globally. The USDA-ERS China Model and the CCLS, used to project Chinese and global sorghum trends, includes the following policy instruments: tariffs, quotas, tariff rate quotas, export tax, direct payments, input subsidies, and procurement policies. This model simulates projections using price and income elasticities and assumed values for exogenous variables such as income and population growth. This model also incorporates behavior of state trading enterprises and WTO commitments into imported and exported equations for sorghum.