June 23, 2012

China to end anti-dumping probe on US DDGs

China will finally end an anti-dumping probe on US distillers' dried grains (DDGs) imports, launching further purchases of the feed ingredient from US, the country's commerce ministry stated on Thursday (June 21).

Feed mills in China, the world's top meat consumer, substitute DDGS for corn and sometimes soymeal. Domestic annual production of about 3.5 million tonnes of the by-product from the manufacture of corn-based ethanol cannot satisfy domestic mills' demand.

China's commerce ministry launched the probe one-and-a-half years ago at the request of four Chinese ethanol makers, threatening trade that grew massively in 2009 and 2010, when the country briefly became the world's largest importer of the grains.

In a statement, the commerce ministry said the four companies had withdrawn the request on May 10, and asked for the termination of investigation, which had been due to run until June 28.

"It is good news for Chinese feed mills, which have been expecting this to happen for some time," said one official of an industry body that promotes US DDGs.

China's imports of DDGs fell 47% last year because of the probe to stand at 1.68 million tonnes. The 2010 figure of 3.16 million, worth more than US$753 million, was a dramatic increase of 385% over the previous year.

China's imports this year could hit two million tonnes, estimated the official, who declined to be identified as he is not authorised to speak to the media.

Imports in May jumped 346% to 294,704 tonnes, bringing the first five months' total imports to 913,371 tonnes, official Customs data show.

"But US supplies right now are tight, after some ethanol plants have shut down for maintenance," said the official.