Chinese government decision on US DDGS expected in September: source

03.08.2016

The Chinese Ministry of Commerce is expected to announce its decision on potential tariffs on imports of US dried distillers grains in September, a source close to the matter said Tuesday.

The ministry held a public hearing Tuesday regarding the antidumping investigation launched in January. Chinese ethanol producers had called for the investigation, arguing that US producers were selling DDGS at artificially low prices.

Market participants were waiting for the final decision by the Chinese government as they expected that there would be tariffs on US imports. However, a source close to the matter said that the final decision would be announced in September.

"Considering the current situation, it is very likely that a sanction will be made. It is just a matter of how high the tax will be," the source said.

An official in Trade Remedy and Investigation Bureau under the Ministry of Commerce said Tuesday no decision would be made until after the hearing.

"All participants of the hearing were requested to hand in the hard copies of their opinion on August 5, and there will be some more process to go through before releasing the final result of the case," the official said.

Chinese domestic DDGS prices rose Tuesday as the market anticipated there would probably be punitive tariffs for US DDGS later.

On the other side of the Pacific, the US DDGS market has seen prices fall sharply as interest from Chinese buyers has evaporated. On Monday, S&P Global Platts assessed CIF New Orleans DDGS for August delivery at $167.50/st, down from $210.50/st on June 20. Channahon, Illinois, trucks were assessed at $140.50/st, down from $205/st on June 17.

Chinese imports of US DDGS were down 52.97% by volume in the first four months of the year, according to US Census Bureau data.

China has been importing a large quantity of DDGS from the US since 2009. In 2016, 99.97% of China's DDGS imports came from the US, according to the Chinese Customs Information Center.

This is the second time the Chinese government has investigated the pricing of US DDGS since 2010. The previous investigation concluded in 2012 with no tariffs.


platts

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