March 9, 2011

 

New Hope urges dropping of US DDGS probe
 

 

China's largest animal feed producer, New Hope Group, called on the government to stop its anti-dumping investigation against exports of US dried distillers grains with soluble (DDGS).

 

"The investigation has not consulted the feed industry and only represents the interests of some ethanol producers," said Liu Yonghao, chairman of China's largest private agricultural conglomerate New Hope.

 

Cheap US DDGS imports last year helped cut costs for feed mills and China's investigation launched late last year have driven up domestic prices of the corn by-product, said Liu.

 

China became the world's largest importer of DDGS, and imported 3.2 million tonnes in 2010, equal to its total domestic production.

 

Rising US corn prices are making Chinese feed mills less interested in importing corn this year, said Liu. China's corn imports rose to the highest in a decade last year because of tight domestic supply.

 

Liu also called on Beijing to issue a majority of annual corn import quotas to private feed mills, which produce 95% of the country's animal feed production.

 

"We have to buy corn quotas from state-owned firms, which has indirectly pushed up import costs and passed on to food price rises," he added.

 

China only issued 40% of its annual import quotas totalling 7.2 million tonnes to private mills.

 

Liu said the company is looking to set up 15 to 20 feed mills overseas in the coming five years after a recent bid for a majority stake in New Zealand's biggest rural services company.

 

The company, together with China-based Agria, bid for 50.01% in PGG Wrightson.

 

"It is difficult to acquire land or farms overseas or in New Zealand, but it will benefit us to take over some good companies which play a key role in the local breeding industry," Liu said.

 

New Hope was mainly targeting developing countries in South Asia and Central Africa for its future feed mills expansion overseas.