Three years ago there were virtually no dried distillers grains (DDGS) going to China. Last year there were more than 1.5 million metric tons of DDGS exported to the country and some estimate that the number could be as high as 3 million metric tons at the close of this year.
So, although the U.S. Grains Council (USGC) felt that this was the normal progression in trade in a market that is growing exponentially, it didn’t completely come as a surprise when the China’s Ministry of Commerce has launched an anti-dumping probe into the ethanol co-product DDGS. This according to Rebecca Bratter, the USGC director of trade development during a press call to give an update on the status of the situation, which was brought to you on DomesticFuel when the story first broke.
The case was initiated on December 28, 2010 and will take at least a year before a decision is made. In the meantime, the interested parties were only given 20 days to register their interest in the case.
“We understand the consequences. We know what’s at stake for registering or not registering,” said Bratter during the call. “We know this is just the first step in what will be a long process which will include both an injury investigation and on a separate track, a dumping investigation.”
Bratter continued to say that they would be communicating an industry response back to the Chinese government that could be as soon as today.
“We consider China a very important market, a very strategic market and we place a very high level of importance on our trade relationship with China,” Bratter stressed.
During the investigation, the Chinese government has the authority to impose higher duties on the exports. Today, there is a 5 percent duty on DDGS but this could climb as high as 50 percent or higher, which would have a major negative impact on trade.
During the course of the investigation, Bratter said, “The Grains Council intends to operate as normal in China.”