Friday, August 3, 2012

China Stops Anti-dumping Investigation into DDGS Imported from the US

On June 28, 2012, Chinese Ministry of Commerce (MOC) published a notice that China had stopped the anti-dumping investigation into Distillers Dried Grains with Solubles (DDGS) imported from the US because Chinese applicants, namely COFCO Bio-chemical (Anhui) Co., Ltd. (COFCO Bio-chemical), Jilin Fuel Alcohol Co., Ltd. (Jilin Fuel Alcohol), Meihekou Fukang Alcohol Co., Ltd. (Meihekou Fukang Alcohol) and Jilin Province New Tian Long Wine Co., Ltd. (Jilin New Tian Long Wine), applied to stop it on May 10, 2012, according to CCM International’s July issue of Corn Products China News.

As a matter of fact, on Nov. 16, 2010, COFCO Bio-chemical, Jilin Fuel Alcohol, Meihuakou Fukang Alcohol and Jilin New Tian Long Wine stood for domestic DDGS industry to apply for the anti-dumping investigation into DDGS imported from the US. Then on Dec. 28, 2010, MOC published a notice that China started the anti-dumping investigation into DDGS imported from the US. And the dumping investigation period was from July 1, 2009 to June 30, 2010 and the industry injury investigation period was from Jan. 1, 2007 to June 30, 2010.

However, the situation of anti-dumping investigation into DDGS imported from the US was complicated, leading to MOC's extending of the deadline of anti-dumping investigation to June 28, 2012. And various correlative industries investigated gave different feedbacks. For example, in 2011, China Alcohol Drinks Association handed in Letter on Supporting Domestic Anti-dumping Investigation into DDGS in the hope to speed up the anti-dumping investigation and make a judgement in order to protect domestic DDGS industry. Meanwhile, China Feed Industry Association handed in Letter on Suggesting to Suspend the Anti-dumping Investigation into DDGS Imported from the US, which gave an opposite advice. However, before MOC could make a formal judgement on the anti-dumping investigation, the application to stop the investigation was approved by MOC.

DDGS, a side product of ethanol production line, is a substitute for corn and dregs of beans as feed additive. As China restricts the development of ethanol made from corn, domestic output of DDGS can't meet its demand. Imported DDGS can make the gap up to some extent and relieve the pressure of corn import. However, the anti-dumping investigation into DDGS decreased its import volume because almost all imported DDGS in China is from the US, the largest production country of DDGS. In detail, according to data from China Customs, domestic import volume of DDGS in 2010 was 3.16 million tonnes while it declined to 1.69 million tonnes in 2011, down 46.7% year on year.

Nevertheless, some insiders thought it was good news for domestic feed industry to stop the anti-dumping investigation into DDGS imported from the US. "China should import more DDGS, which can give more choices to domestic feed enterprises," said Doctor Fan Xuezhi from the Development Research Centre of the State Council. "Compared with domestic DDGS, US-made DDGS has advantages in quality such as higher content of protein and fat as well as lower content of flavacol and vomitoxin. If the import price of US-made DDGS is reasonable, its import volume will increase due to its good cost performance," said Manager Li Shiqiang from Zhengzhou Hongle Feed Co., Ltd., an importer of DDGS in China.

Overall, considering the huge demand for DDGS in China, it is predicted that China's import volume of DDGS will recover in H2 2012. For example, domestic demand for DDGS in 2011 was about 11.5 million tonnes while the output was just about 3.5 million tonnes, leaving a huge gap for imported DDGS. And the situation in 2012 is similar.

Source: Corn Product China News 1207

Content of Corn Products China News 1207:
Domestic export of furfural decreases in the first five months of 2012
Chinese corn products Imp. & Exp. analysis in May 2012
Domestic market price of corn starch keeps stable in July 2012
China Corn Oil changes to a high-end food enterprise
China's lysine sees contrary market situation in H1 2012 over in H1 2011
450,000t/a glucose monohydrate production line of Xiwang Pharmaceutical comes on stream
Domestic furfural producers plan to found a national furfural industry union
The US launches anti-dumping probe into xanthan gum from China
Chinese corn products perform poorly in H1 2012
… …

Corn Products China News, a monthly publication issued by CCM International on 20th of every month, reveals the driving force of news stories and deeply analyzes the influence of trends and dynamics on domestic and international corn deep processing industry.

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