Chinese Buyers Suspend DDGS Imports from the U.S.
Chinese buyers have suspended purchases of U.S. distillers dried grains (DDGS) due to concerns that Beijing is set to launch another anti-dumping probe surrounding imports of the feed ingredient that is often substituted for corn and soymeal by feed mills.
China is the number one buyer of DDGS in the world, buying almost its entire supply from the U.S., which is the world’ biggest exporter. The value of Chinese imports reached $1.6 billion so far this year.
Chinese ethanol companies reportedly submitted an anti-dumping request to the country’s commerce ministry last week, although these claims by industry sources have not been confirmed by the ministry.
Cheap imports of DDGS from the U.S. have put pressure on China’s domestic ethanol industry, according to Zhang Guohong, a senior official with China’s Alcohol Industry Association, who claims that the 5.41 million tons of U.S. DDGS that China imported last year would equal about 10 million tons of corn – adding to the country’s surplus in corn supplies.
China’s inventories of corn currently stand at 150 million tons, or eight months of consumption. These reserves are expected to climb to more than a year’s consumption after the 2015/16 stockpile scheme, which ends in April 2016.
Between July and September of this year, China’s imports of DDGS from the U.S. stayed at a record high, showing solid recovery after investigations into unapproved GM strains in shipments led to a trade disruption in the second half of last year.
If Beijing does launch an anti-dumping probe into U.S. shipments of DDGS, it would be the second such probe in recent years. In 2010 the ministry launched an investigation into U.S. DDGS imports, extending the probe until mid-2012.