The U.S. Grains Council has confirmed that the sale of U.S. DDGS have slowed down following the Chinese anti-dumping investigation announced at the beginning of the year. &ldquo;We have also heard that some buyers in China have canceled orders due to the uncertainly of what&rsquo;s going to happen with the price of DDGS and if there are going to be high tariffs applied or not,&rdquo; said Rebecca Bratter, USGC director of trade development.
Still, it isn&rsquo;t yet known exactly how the anti-dumping case will affect the DDGS market and overall supply. Although China was the U.S.&rsquo;s largest importer of DDGS last year, bringing in a whooping 3.1 million metric tons, there are still many other countries, such as Mexico and Canada, who are buying DDGS as usual. &ldquo;It&rsquo;s too early to detect if there&rsquo;s [going to be] a surplus left in the U.S. and it&rsquo;s too early to detect whether or not other countries are going to order more,&rdquo; she said.
According to government data released March 10, 714,000 metric tons of DDGS were exported in January, nearly the same amount as was exported last month. Exports to China dropped by 30 percent, likely due to the anti-dumping investigation, said Geoff Cooper, vice president of research and analysis for the Renewable Fuels Association. That&rsquo;s 183,000 mt exported in December to 129,000 mt exported in January. On the other hand, exports to Mexico surged 76 percent, offsetting the drop in exports to China.
Bratter also pointed out that this time for exports to China, as the country works through an annual political event. USGS will know more about what&rsquo;s expected for future exports to China after that concludes, perhaps in early April, she said.
Renewed interest in the topic comes amid news reports that a Chinese animal feed company called on its government to halt the investigation. New Hope Group said recently that the case represents the interests of some Chinese ethanol producers but not the Chinese feed industry and that it has driven up prices on a previously inexpensive product for feed mills.
When asked about the comments made by New Hope Group, Bratter told EPM that USGC didn&rsquo;t have anything to do with the Chinese company&rsquo;s comments on the situation and only learned of it when it was reported in the media, the same as everyone else. She didn&rsquo;t have any additional details about the incident and added that there&rsquo;s really nothing new to report about the case itself either. &ldquo;There&rsquo;s no major development right now, we&rsquo;re too early,&rdquo; she said. &ldquo;We&rsquo;re just simply working with the industry to make sure that they get the information that they need so that we can just move along the continuum that this case is going to take.&rdquo;
The undisputable facts of the case are that China&rsquo;s imports of U.S. DDGS went from virtually zero to the No. 1 importing country in just three years. In 2009 nearly 600,000 metric tons of DDGS came into China and in 2010 that skyrocketed to 3.2 mmt. Although it&rsquo;s not part of the DDGS dumping investigation, Chinese corn imports have also increased in the past few years. Up until the last few years the U.S. hadn&rsquo;t exported any significant amount of corn to China since 1995 and in the last year it exported 1.4 mmt to the country.
To rule against the U.S., China must show evidence that DDGS have been dumped on the Chinese market at prices lower than what other buyers pay, injuring Chinese interests. The decision is expected by the end of 2011, with the possibility of a six month extension.
China has a strong and dynamic economy that recently passed up Japan as the second largest economy in the world, Bratter pointed out. As countries grow and industrialize their ag sector, such as hog or dairy industries, more protein inputs, such as DDGS or corn are needed. From USGC&rsquo;s point of view, the increases are part of the normal course of trade. &ldquo;Things changed very fast for China,&rdquo; she said, &ldquo;and I think going from a net exporter to a net importer of any product is going to involve a period of adjustment and I think that&rsquo;s the phase we&rsquo;re in right now.&rdquo;
In addition, China and the U.S. have a history of accusing one another of dumping or applying trade safeguards, a punitive tariff that is automatically triggered when imports surge above a specific level. Other recent cases include a U.S. safeguard against China for imported tires and a Chinese dumping case against U.S. poultry. &ldquo;Unfortunately there is some political tension surrounding the U.S. China trade relationship and that may or may not have had a role here,&rdquo; she said.
Regardless of whether the DDGS dumping case is a trade growing pain or not, it is a very serious matter. &ldquo;For the U.S. ethanol industry and for the U.S. grain industry, this could be a major setback,&rdquo; she said.
NOTE: Data on DDGS export numbers added in the third paragraph.

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2011/03/12997856518165.jpg

The U.S. Grains Council has confirmed that the sale of U.S. DDGS have slowed down following the Chinese anti-dumping investigation announced in January. Orders have been canceled and reports indicate a Chinese feed company is protesting the action.

Sale of U.S. DDGS to China slow in January

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Sale of U.S. DDGS to China slow in January.css-7jxktu{position:absolute;bottom:0px;left:0px;right:0px;height:3px;border-radius:3px;background-color:var(--chakra-colors-brandBlack);}

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Sale of U.S. DDGS to China slow in January