China Begins Investigations of U.S. DDGS Exports; USGC Initiates Industry Response

China’s Ministry of Commerce (MOFCOM) announced this week it has initiated anti-dumping and countervailing duty investigations of U.S. distiller’s dried grains with solubles (DDGS) exported to China, prompting a U.S. industry response.

The announcement confirmed what had been rumored for several months and had the immediate effect of beginning an industry-wide registration process for companies that produce or sell DDGS to China, coordinated by the U.S. Grains Council (USGC) along with Growth Energy and the Renewable Fuels Association (RFA).

The anti-dumping case alleges that the Chinese ethanol industry has been injured by imports of U.S. DDGS at unfairly low prices. The countervailing duty case claims that U.S. and state agricultural and ethanol policies unfairly subsidize production of U.S. DDGS exports to China.

USGC President and CEO Tom Sleight said in a statement and in media interviews that the organization was disappointed to see MOFCOM’s actions but will cooperate fully in the investigation.

“We believe the allegations by the Chinese petitioners are unwarranted and unhelpful,” he said. “They could have negative effects on U.S. ethanol and DDGS producers, as well as on Chinese consumers, potentially over a period of many years.”

Sleight reiterated that the Council will work throughout the industry to respond to the investigations while simultaneously remaining engaged in its longtime work in China.

There is a 20-day period following initiation of the cases in which U.S. companies that want to maintain access to the Chinese market must register to indicate their cooperation with the investigation.

The Council, state corn organizations and ethanol organizations are encouraging all companies that produce or merchandise DDGS to register through the coordinated process.

Since 1981, the Council has worked in China to find solutions to the challenges of food security through development and trade. These programs continue today, focused on trade servicing, information sharing, livestock development and air quality.

“We and our members will work vigorously in the coming months to demonstrate that the allegations being investigated by MOFCOM are false, even while we continue to stand ready to expand our cooperation with China on agricultural issues of mutual benefit,” Sleight said.

China is a large and critical market for U.S. farmers and agribusinesses. The country imported more than 50 percent of the exportable supply of U.S. DDGS, or 6 million metric tons valued at $1.5 billion, from January to November 2015.

Click here to read the full statement from Sleight.