China Launches DDG Anti-Dumping Probe

Investigation Likely to Slow China's DDG Imports

Lin Tan
By  Lin Tan , DTN China Correspondent
U.S. is the largest DDG producer in the world while China is the largest DDG importer. (DTN file photo by Cheryl Anderson)

BEIJING (DTN) -- The Chinese Ministry of Commerce will start an anti-dumping investigation against U.S. dried distillers grains exports to China starting on Tuesday.

According to a formal declaration from the Ministry of Commerce, the investigation will focus on the subsidies of U.S.-produced dried distillers grains (DDG) with or without solubles. The time period for the subsidies in question is from Oct. 1, 2014, to Sept. 30, 2015.

U.S. is the largest DDG producer in the world while China is the largest DDG importer. It's the second time China has launched an anti-dumping investigation of DDG. China's previous investigation into DDG imports started in late 2010 and was dropped in mid-2012. DDG imports slowed after the investigation, but it did not stop entirely.

China's DDG imports from the U.S. have grown in recent years: 4.0 million metric tons in 2013, 5.4 mmt in 2014, and 6.4 mmt in the first 11 months of 2015. Domestic production in China is much smaller, around 3 mmt.

P[L1] D[0x0] M[300x250] OOP[F] ADUNIT[] T[]

"Rumors about the anti-dumping investigation had been in the market early last year, but it was only last December when the U.S. agricultural attaches in Beijing confirmed that China has formally accepted the petition from China Alcoholic Drinks Association seeking anti-dumping duties on imports of the feed ingredient from the United States," said Zhonghua Wang, an agricultural commodity analyst of Zhaoshang Futures.

The document shows that the Ministry of Commerce consulted with the China Alcoholic Drinks Association, gave the U.S. government a chance to respond and allowed for written comments before launching the formal investigation.

"The investigation will be based on the petition, which claimed that U.S. governments had provided more than 42 subsidy programs for DDG production, including 10 from federal government and 32 from local governments," Wang said.

The petition claimed the increase of U.S. exports into the Chinese market harmed local industries.

The investigation will be completed on Jan. 12, 2017, but could be extended to July 12, 2017, if the government feels it needs more time.

The investigation will likely slow down China's DDG imports this year.

"However, there is a 'buffer' time of 60 days after the initial start of the investigation," Wang said. "That means that the business is still 'safe' in the following two months. It is estimated that importers may contract more DDGs in the following 60 days to avoid any anti-dumping duties, though they need to register any business through the Ministry of Commerce to define departure and arriving schedule."

(KM/AG/BAS)

P[L2] D[728x90] M[320x50] OOP[F] ADUNIT[] T[]
P[R1] D[300x250] M[300x250] OOP[F] ADUNIT[] T[]
P[R2] D[300x250] M[320x50] OOP[F] ADUNIT[] T[]
DIM[1x3] LBL[] SEL[] IDX[] TMPL[standalone] T[]
P[R3] D[300x250] M[0x0] OOP[F] ADUNIT[] T[]