August 2, 2010

China seeks more US DDGS

China has become Asia's largest importer of US distiller's dried grains with soluble (DDGS), with the grains industry anticipates that the Chinese will purchase 1.5 million tonnes of US DDGS in 2010, while some experts saying there is a possibility for double that amount.

Since the US Grains Council (USGC) first opened the door to DDGS in China, imports of the US product have grown from virtually nothing in the first half of 2009 to 651,000 tonnes in the second half of the year.

DDGS is used in China primarily in the poultry sector, with significant potential for growth in dairy and swine production.

Recently, a team of Chinese grain importers completed a 10-day US tour to learn more about US agricultural operations and shore up relationships with US grain suppliers.

"The Chinese team has focused principally on corn, which, along with soy, are the primary commodities in which the Chinese are interested in expanding US purchases," said Kevin Latner, USGC senior director in China, who accompanied the group.

Donna Jeschke, director of the Illinois Corn Marketing Board, met with the team July 25 in Chicago to help them learn about the commodity sampling done before the product is shipped. Jeschke said that despite differences in the scale of their farming operations, Chinese and US farmers share the same concerns about seed, prices, bugs and weeds.

Qiang Li, chairman of the large, state-owned JC Intelligence Co. in Shanghai said his company would continue to purchase corn and soy, and that the visit left him very confident that US grain producers and handlers have the ability to meet export agreements.

This is good for both the US and China, Li said, adding that if the US has a good harvest, China will buy more, which is good for the balance of trade.