China Dominates Discussions at USGC Summer Annual Meeting

China Discussion
China dominated discussions at USGC's summer annual meeting

China's new certification requirements for imports of distiller's dried grains with solubles (DDGS) and their impact on worldwide DDGS trade were critical topics of conversation at the U.S. Grains Council's 54th Annual Board of Delegates meeting, held last week in Omaha, Nebraska.

The new requirements call for a certification from the U.S government guaranteeing that the shipment is free of the biotech trait MIR 162.

This has thrown into limbo U.S. DDGS shipments that are currently in transit to China and effectively cut off new sales since no agency within the U.S. government issues such a certificate. This poses serious concerns for both U.S. sellers and buyers in China counting on their delivery. Before this most recent trade development, China was importing DDGS at a rate of approximately 20,000 metric tons per day.

MIR 162 is a biotech trait that provides protection against insects. It has been approved as safe for both production and consumption by the United States and all major markets except China. China has yet to approve it for unknown reasons.

USGC staff and consultants, as well as state organization partners, are actively and creatively pursuing a resolution with USDA and the government in China.

Julius Schaaf, who served as USGC chairman until July 30, wrote Secretary of Agriculture Tom Vilsack on the issue, calling the new restriction "arbitrary, capricious, a major impediment to trade" and asking for the Secretary’s direct assistance in finding a resolution. USGC staff are in dialogue with officials at USDA and at the office of the U.S. Trade Representative (USTR) regarding steps that can be taken to alleviate the issue.

The Council is calling for immediate approval of MIR 162 in China along with long-term solutions to the restrictions on China’s imports of biotech products. USGC's international staff is also seeking ways to reinvigorate other markets for U.S. DDGS, with promising markets including Japan, Korea, Taiwan, Mexico and Canada.

China has become a significant market for U.S. corn, DDGS and other commodities in recent years. The U.S. exported 2.7 million tons (106.3 million bushels) of corn from Sept. 1, 2013, until June of this year and 3 million tons of DDGS to China from January to June.

The Council maintains robust and ongoing programs focusing on building the market in China. In addition to in-country activities, these programs include bringing U.S. producers to China to build relationships with think-tanks, industry, academia and government, and by hosting trade teams made up of industry and government officials from China who play key roles in developing China's food security policies and biotech approval processes.