(Corrects spelling of GrainCorp in headline)
By Colin Packham
MELBOURNE, July 28 (Reuters) - Chinese demand for Australian sorghum has slowed so far this season, bulk grain handler Graincorp Ltd GNC.AX said, raising concerns that Beijing may plan to implement a tariff to limit soaring import volumes.
Chinese sorghum imports are expected to fall as much as 30 percent in 2015/16, with buyers reluctant to place fresh orders amid speculation Beijing may cut the domestic corn price, lowering the incentive to buy sorghum. ID:nL3N0ZM2U5
GrainCorp CEO Mark Palmquist said he was also concerned at the potential for Chinese regulatory restrictions.
"Demand hasn't started that strong," Palmquist told Reuters on the sidelines of a grains conference.
"The concern I have going forward is whether we are going to have any TRQ (tariff rate quota) issues to lower volumes. We haven't seen it yet, but we haven't seen a lot of forward business yet either."
Lower Chinese demand for Australian sorghum would be a significant headwind for GrainCorp, which has profited from record imports of the grain.
China, the world's top buyer, imports sorghum as a substitute for domestic corn, which has been kept at an artificially high price by Beijing's stockpile scheme.
In Australia, sorghum is grown exclusively along the east coast where GrainCorp is strongest, helping its trading division offset smaller wheat exports after a drop in production.
Chinese imports of Australian sorghum are expected to hit a record 483,000 tonnes in the 2015/16 season, according to Australian government forecasts, up from 464,000 tonnes the previous year.
Sorghum consumption in China has surged over the past three years from 3.2 million tonnes to 11.1 million tonnes in 2015, according to estimates by the Australian Bureau of Agricultural and Resource Economics and Sciences.