U.S. Farmers And Ethanol Producers Face Restricted Market Access In China

This past week the Ministry of Commerce in China announced anti-dumping and countervailing duties on DDGS imports from the U.S. beginning January 12. This action came only 10 days after China increased its tariff on U.S. ethanol from five to 30 percent. While these exports to the Chinese market will likely be curtailed for the foreseeable future, the real negative impact will be with end users in China.

DDGS are a cost efficiency feed ingredient vital to the feed and livestock industries in China. The restricted access to the cost-effective feed ingredient may result in an increase in food prices for pork, poultry, and dairy products. Ultimately, food security may be put at risk in China, however, the far greater concern will likely be felt by global markets.

Corn industry leaders such as the U.S Grains Council (USGC) and Illinois-based ethanol producer, Marquis Energy, are tirelessly working to negotiate this new trade barrier, which the USGC states will “challenge the extent of our engagement with China.”