China seen likely to launch antidumping probe into US dried distiller grains


Chinese authorities have formally accepted a petition calling for an antidumping probe into dried distiller grains imported from the US, the US Department of Agriculture said this week.

The US Embassy in Beijing was notified of the move -- which could have far-reaching ramifications for the US DDG industry -- by China's Ministry of Commerce or MOFCOM Tuesday, according to a USDA report.

While MOFCOM has up to 60 days after accepting a petition to decide whether to formally investigate, it usually moves quickly to launch a probe.

Chinese ethanol producers reportedly called on the government to launch an antidumping probe in late October, Platts reported earlier.DDGs are a byproduct of ethanol production used mainly as livestock feed.

China is the main importer of DDGs from the US, accounting for more than 42% of total imports in 2014, when high domestic corn prices prompted DDG end-users in China to rely heavily on imports.

The Chinese government launched a similar antidumping probe into US DDG in 2010, but it was terminated 18 months later after three Chinese ethanol plants withdrew their request for the probe.

DDG imports were also curtailed in 2014 when the Chinese government rejected corn and byproducts that included a genetically modified strain of corn. That restriction was lifted in December.

News of China's latest move is set to further dampen sentiment among Western ethanol producers, who had already been wary of an over-reliance on China as a key export market.

Delegates at an ethanol conference in Hungary in November were told DDG businesses in the US and Europe could no longer rely on Chinese demand and that global prices were being dictated by policy decisions made in Beijing.

Traders will become even more cautious about sending cargoes to China if they run the risk of being unable to sell if new regulations curtailing imports were to come into effect, market sources said Friday.

Source from : Platts