January 15, 2011

Chinese traders stall US DDGS imports amid anti-dumping concerns

Several major Chinese importers have suspended imports of distiller's dried grains (DDGS) from the US, due to concerns that China may levy high duties on the product after it launched an anti-dumping investigation.

The US farm industry views DDGS, a corn-ethanol byproduct, as a tremendous new trade opportunity in China, and Chinese imports rose strongly this year amid expectations the commodity will prise feedmeal market share away from corn.

Guangdong Jun Jie Agricultural Trading Co halted inbound shipments of DDGS earlier this month due to the uncertainty of the policy outlook, company Chairman Xie Xiongping said Friday (Jan 14).

"As import volumes are small relative to other commodities, we make only thin profits from importing commodities such as DDGS," he added.

Shandong Liuhe Group Co, a major animal feed manufacturer in China, is due over the next few months to receive shipments of US DDGS it previously ordered, but isn't placing new orders, said Zhou Xiaoyan, a grain purchasing manager at the group.

She added that high DDGS prices at present will also limit Liuhe's purchases. Local analysts have said other importers have also suspended shipments.

China's Ministry of Commerce said in December that it has opened an anti-dumping investigation into US DDGS. It expects to complete the probe by December 28 this year but could extend the investigation to next June.

China likely imported more than 3.1 million tonnes of DDGS from the US last year and produced about the same amount locally, accounting for less than a 20th of the domestic feedmeal market, according to industry data. Still, imports were up sharply from 652,000 tonnes in 2009.