This decision comes after the U.S. launched trade enforcement action on Sept. 13 against China at the World Trade Organization concerning excessive government support for domestic wheat, corn and rice production.
The U.S. is the largest DDGS producer and has a surplus to export, while China is the biggest importer. DDGS is a byproduct of ethanol production used for animal feed.
“We are deeply disappointed that China’s Ministry of Commerce has issued a preliminary determination claiming that U.S. dried distillers grains with or without solubles (DDGS) are being dumped and have caused injury to China’s DDGS industry,” the U.S. Grains Council (USGC), Renewable Fuels Association (RFA) and Growth Energy said in a joint statement. “As part of our three-decade long partnership with China, we have worked closely with government agencies, industry associations, and the feed and livestock industries in China to educate stakeholders about the benefits of both imported and domestic DDGS as an alternative feed ingredient.”
According to the USGC, DDGS exports increased from 1 million tonnes in 2006 to more than 11 million tonnes in more than 45 countries in 2014. China received the bulk of DDGS exports, consisting of 38% of the export market, while Mexico (14%) was the second largest importer. Combined, U.S. ethanol plants possess the capacity to produce more than 14 billion gallons of ethanol and 39 million tonnes of DDGS.
Beijing previously launched an anti-dumping investigation into DDGS imports from the U.S. in late 2010, later extending the probe before dropping in mid-2012. The earlier investigation slowed China’s imports of the feed ingredient but did not stop them entirely.
