Despite the Phase One trade deal with the US, China has maintained punitive sanctions on that country’s DDGS exports.
The Chinese officials are to begin a review of the anti-dumping and anti-subsidy measures, which were originally imposed in 2016 following a petition brought by the China Alcoholic Drinks Association.
The review process should be finalized before January 12, 2023, reported Reuters, citing statements from the ministry.
Any interested party can submit suggestions and evidence to the investigation within 20 days, added MOFCOM.
Damaging move for China’s feed and livestock sectors
China's tariffs on US DDGS were first implemented at a rate of 33.8%, and its imports of the feed ingredient fell sharply.
At that time, the US Grains Council (USGC) said that the US was not dumping the feed ingredient.
The anti-dumping and countervailing duties on the feed ingredient were increased to a rate of 42.2-53.7% with an 11.2% to 12% anti-subsidy tax in 2017 for a five-year period.
“The decision in the anti-dumping and countervailing duties investigations are not supported by the evidence and raise serious questions regarding the Ministry’s compliance with standard AD/CVD [anti-dumping/countervailing duty] procedures and with China’s international obligations,” the USGC told us at the time. “While painful and damaging to the US DDGS industry, their biggest negative impact will ultimately be on China’s feed and livestock industries.”
From January to November of 2015, China imported more than half of the DDGS that the US exported about 5.4m metric tons, as per USGC data.
New market push
Following the loss of the export market to China, the USCG upped its efforts to develop alternative target markets for US exporters of the ingredient.
US DDGS exports have exploded from 5 million tons in 2009 to more than 11 million metric tons in 69 countries in 2020/2021, reported the Council.
Mexico purchased the bulk of DDGS exports, consisting of more than 18% of the export market, while Vietnam was the second largest importer. South Korea, Turkey and Indonesia round out the top five importers for 2020/2021.
Meanwhile, ethanol production in the US has been hitting near record highs for the last few months, which has resulted in increased DDGS supplies.