International market prices for sorghum are largely determined by the supply and demand situation in the United States, and export prices are based on the reference sorghum, US Milo no. 2, yellow. Since sorghum is almost exclusively traded for feed, market quotations are closely related to price movements for other feed-quality grains, mainly maize, wheat and barley. The prices of feed grains are generally influenced by such factors as world production, the size of carryover stocks and the number of grain-consuming animals. There are no internationally recognized, regularly published prices for white (food) sorghum. Export prices for white sorghum are usually quoted irregularly and only for geographically restricted sub-regional markets, and bear little relation to sorghum (mainly feed sorghum) prices quoted on the international market4.
[4. In 1986, sorghum was sold f.o.b. US Gulf at an average price of US$ 83 per ton. But during the same period, the World Food Programme purchased sorghum at widely varying prices from different suppliers - US$ 117 per ton in Sudan, US$ 261 in Burkina Faso and US$ 263 in Niger. (Source: WFP Occasional Papers no. 11: A study of triangular transactions and local purchases in food aid, Jul 1987).]
Export prices were relatively low during the 1960s, when cereal stocks were high, but they more than doubled during the world food crisis of 1972-74. Prices increased from US$ 52 per ton in 1971/72 to US$ 123 in 1974/75. They climbed to another peak of US$ 141 per ton in 1980/81 but remained depressed during the second half of the 1980s and the early 1990s, in line with the level of other coarse grains. They began to increase sharply only in mid 1995 (Fig. 7), after world cereal output remained below global demand for three consecutive years, causing cereal stocks to fall to their lowest level in 20 years.
Competition between different grains for animal feed depends on relative feed values and prices. Although feed values of each grain vary for different types of animals, some rough, general rules have been established. Total digestible nutrients in sorghum are 95 percent of those in maize5. Sorghum, therefore, becomes attractive as a feed only when its price declines to below 95 percent of the maize price. Consequently, international sorghum prices move very closely with those of maize, the world's most important feed grain, but are usually slightly lower (Fig. 7).
[5. Total digestible nutrients in barley and oats are 90 percent and in wheat 105 percent of those in maize.]