The preliminary decision was announced Friday by the Chinese Ministry of Commerce (MOFCOM). Several US-based organizations working with dried distiller’s grains (DDGS) have slammed the move.
The US Grains Council (USGC), the Renewable Fuels Association (RFA) and Growth Energy said they have worked closely with China for many years and are proud of the role they have played in developing China’s feed industry.
“We are deeply disappointed that China’s Ministry of Commerce has issued a preliminary determination claiming that US dried distiller’s grains with or without solubles (DDGS) are being dumped and have caused injury to China’s DDGS industry,” the organizations said in a joint statement. “We are proud of the role that US and Chinese DDGS have played in helping China’s animal feed industry to produce high-quality animal feed products to supply China’s rapidly growing meat industry, and in ensuring that Chinese consumers continue to have access to safe, affordable and nutritious protein products.”
The organizations have worked with Chinese producers to improve the use of both imported and domestically produced DDGS as a feed ingredient, they said.
China was the largest market for US DDGS in 2015 and 2016, although sales have slowed since the anti-dumping and countervailing duty investigations started earlier this year, said the USGC.
Investigation recap
The anti-dumping and countervailing duty investigations into DDGS being exported to China started in January, after a petition was filed by the China Alcoholic Drinks Association.
The initial announcement promoted a registration process for companies that either produced or sold DDGs to China. That effort was led by the USGC with RFA and Growth Energy.
Tom Sleight, president and CEO of the USGC, told us at the time that the US is a “fair trader” and was not selling DDGS below market prices, and that the industry would be fully cooperative with the investigation.
Additionally, Tom Buis, CEO, and Bob Dinneen, CEO and president, with Growth Energy and the RFA, respectively, asked for the US government to get involved in case in March and challenge the process and initial determinations made as the issues were being investigated. The groups published an open letter on the topic.
“We request your administration work closely with the US distiller’s grain industry to mount an aggressive defense of our access to the Chinese livestock feed market throughout China’s antidumping and countervailing duty investigations,” they added.
Reaction
The USGC said that the US was not dumping DDGS into the Chinese market, when the investigation was first announced, and continues to maintain that position. “We are confident that US DDGS are not being dumped and are not causing or threatening injury to Chinese producers,” they added on Friday.
“As the Council asserted at MOFCOM’s hearing, US DDGS have not caused any injury to China’s DDGS producers,” the groups said. “Instead, DDGS play an important role in protecting Chinese feed producers and households against unpredictable swings in global commodity prices.”
The organizations said they are planning to work with Chinese government and producers to address feed market reforms. “We welcome opportunities to work together with the Chinese government, Chinese feed producers and consumers to continue to meet China’s growing feed demand in a mutually beneficial way for all parties as China implements market-oriented agricultural pricing reforms,” they added.
New markets
The investigation has slowed sales of DDGS to China, however the market has not completely vanished reported the Council. From September to August of 2015 about 3.7m metric tons of US DDGS were sold to China and for that period in 2016, about 2.75m metric tons have been sold there.
The groups said they hope to see future access to the Chinese market for US DDGS producers. “Our industry deeply appreciated the support that we received at the recent hearing in China from our Chinese customers, and we remain hopeful that MOFCOM will find in its final determination that continued access for U.S. DDGS is in China’s interest," they added.
However, said Sleight, though product prices dropped, other markets have been expanding.
Overall sales have expanded by 6%, with growth in Southeast Asia, Mexico, South Korea and Turkey, reported the Council.
“Once the product is introduced [and] they get to know how to formulate feed with it they kind of become hooked,” said Sleight. “It performs well in livestock diets, particularly for ruminants and swine, [and] people have a lot of success using it – it’s a good feed options all over the world.”