Sino-Global Shipping America, Ltd. (NASDAQ: SINO) (Sino-Global), a non-asset based global shipping and freight logistic integrated solution provider, announced on June 25 that it has signed a Non-Binding Memorandum Of Understanding (MOU) with Yunnan Jingyifeng Supply Chain Management Co Ltd (JYF) to jointly develop the business of exporting products to China. These products include sulphur, vegetable oil, soybean, barley, wheat, and dried grains with solubles, which are used for fuel production, feeding, and other agriculture needs.
The Company has seen a considerable increase in export demand following the January 15, 2020 signing of the U.S.-China Phase 1 deal, which included China's commitment to purchase $200 billion of U.S. products over the next two years. These products include fertilizer raw materials such as sulfuric acid, phosphoric acid, ammonia and niche categories of sulfur, along with agricultural products.
Under the MOU, JYF aims to use Sino-Global's customer relationships and experience as a procurement agent in purchasing approximately 1,000,000 metric tons of these products per year, which will then be marketed to JYF's customers in South West China, including Guangxi, Yunnan, Guizhou and Sichuan provinces. The Company anticipates reporting an increase in agency-based trading revenue, with the current market prices ranging from $75 per ton for sulphur products to $400 per ton for soybean products. Sino-Global's revenue under similar types of arrangement typically ranges between 8-12% of the total amount.
Mr. Lei Cao, Chief Executive Officer of Sino-Global, stated, "We are seeing a tremendous opportunity to leverage our shipping agency expertise and contacts with growing demand for exporting products to China under the requirements of Phase 1 of the U.S. / China trade deal. The U.S. has historically been a net importer of sulfuric acid and has not historically exported significant volumes to China, and the impact of COVID-19 has placed considerable pressure on China-based importers to expand and improve their supply chain network in order to meet the demands under the agreement. Sino-Global will provide a turnkey supply chain logistic service solution for JYF, which can then sell these products directly to Chinese clients. We have successfully worked with JYF in the past, and expect to pursue additional arrangements where Sino-Global can provide solutions to those importers that have been working diligently to secure raw materials and components and protect supply lines."
Source: Sino-Global