June 30, 2011

 

China may impose 'smaller-than-expected' duties on US DDGS
 

 

Preliminary government findings in China's antidumping probe into imports of US distillers dried grains (DDGS) suggest that Beijing may decide to levy "lower-than-expected" antidumping duties, as import prices were found to be higher than domestic prices.

 

The Ministry of Commerce opened an antidumping investigation into US exports of DDGS in December, cutting off efforts by the US farm industry lobby to promote the imports among Chinese feed mills. DDGS is a byproduct created when corn is turned into ethanol.

 

The ministry's probe severely reduced the country's imports of the alternative to corn as a feed ingredient, to 645,000 tonnes in the first five months of this year, down 25% compared with the same period last year, the state-backed China National Grain and Oils Information Centre (CNGOIC) said Wednesday (Jun 29).

 

The ministry recently held an antidumping hearing on the case, inviting 56 domestic and global industry participants to assess the allegations, the CNGOIC said.

 

"The preliminary finding was that during the period under antidumping investigation, imported DDGS prices were on average higher than comparable local prices," the center said.

 

"The case for US dumping is not clear, and even if a case for material damage is found, the antidumping deposit may be lower than expected," it said.

 

China customs authorities charge cash deposits against imports in accordance with government findings on antidumping margins.

 

China's antidumping probe on such grains were one among a series of trade actions Beijing opened against major trading partners last year.

 

China also slapped antidumping duties on US chicken last year, accusing the US of subsidising its poultry industry and hurting China's domestic industry.

 

The US Grains Council has suggested that China's probe into US feedstock imports was in retaliation for a US investigation of alleged Chinese subsidies of wind energy. China has since agreed to end such wind-power subsidies, US officials said earlier this month.

 

US farm interests have viewed DDGS as an important inroad to the Chinese food market, as the country's domestic pork prices have soared to record levels due to changing domestic diet patterns.

 

Prior to the probe, China's farm sector was increasingly choosing DDGS over corn as an ingredient in feedmeal for livestock, in part because it is relatively higher in protein and fiber. Just as importantly, DDGS imports for use in animal feed are not subject to China's corn import quotas or its rules on genetically modified food.

 

China's imports of the commodity soared last year to around three million tonnes from 652,000 tonnes in 2009, according to the CNGOIC. In 2008, China imported "not even 10,000 tonnes" of DDGS, the centre said.

 

China is the US's top agricultural export market. Unlike its broader trade patterns, China usually runs a trade deficit with the US in the agriculture sector, importing US$17.5 billion a year on average, compared to US$3 billion a year in Chinese agriculture-related exports to the US, according to estimates by the US Grains Council.

 

Analysts have estimated that US DDGS imports in the middle of last year were around RMB300-RMB400 (US$46-62)/tonne cheaper than domestic DDGS, but prices have since levelled.

Video >

Follow Us

FacebookTwitterLinkedIn