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CCM: China finalises anti-dumping and anti-subsidy duties on American DDGS


The MOC finalized the anti-dumping and anti-subsidy duties on imported DDGS from the US. CCM believes that this move will further reduce Chinese DDGS import volume, strengthen demand for corn and soybean meal, and stimulate the supply of alcohol.


On 11th Jan., 2017, the Ministry of Commerce of the People's Republic of China (MOC) announced that the US was ruled to have dumped DDGS into China, which has caused substantial damage to the Chinese DDGS industry. Therefore, China decided to respectively impose 42.2%-53.7% and 11.2%-12.0% of anti-dumping and anti-subsidy duties on US DDGS for 5 years, starting 12 Jan., 2017.

Source: Baidu


In 2016, China launched anti-dumping and anti-subsidy investigations into American DDGS:


-12th Jan. - The MOC announced that it had decided to conduct an anti-dumping investigation into American DDGS

-23th Sept. - The MOC made an initial ruling that the US has dumped and subsidized its DDGS into China. It subsequently required importers to pay an anti-dumping deposit and an anti-subsidy deposit at 33.8% and 10.0%-10.8% respectively. Note: Deposit amount = (duty-paid value assessed by the customs * deposit rate) * (1 + import-related value-added tax rate)

-2nd Aug. - The MOC held a hearing on whether to launch an anti-dumping and anti-subsidy investigation on DDGS, at which the US and China debated whether the US dumps DDGS into China


Actually, in early Dec. 2010, China had launched anti-dumping and anti-subsidy investigations into American DDGS. However, the investigations were terminated due to various factors. At that time, China didn't form a definite conclusion on whether the US dumps DDGS into China.


As the largest DDGS importer in the world, China mainly imported DDGS from the US. Compared to the DDGS made-in-China, American DDGS enjoys both a lower price and higher quality. Coupled with the surging domestic corn price in the past few years, import volume of DDGS rose significantly. According to China Customs, import volume reached 6.82 million tonnes in 2015, up 26.1% YoY. In addition, the proportion of apparent consumption volume of imported DDGS climbed 70.2% in Jan.-Sept. 2015 from 41.6% in 2012, according to the MOC.


DDGS is a by-product of corn alcohol, which can be used as a raw material in feed to provide energy and protein. Therefore, DDGS is a good substitute for corn and soybean meal. In 2016, China's corn price slumped and dragged down the domestic DDGS price, resulting in sharply falling import volume of DDGS. According to China Customs, the country imported about 3 million tonnes of DDGS in Jan.-Nov. 2016, down 46.8% YoY.


Output, import volume and apparent consumption volume of DDGS in China, 2012-2015 (Jan.-Sept.)


Source: MOC


It is noteworthy that China made an initial ruling on American DDGS in Sept. 2016, caused many importers have slowed down their imports. Some feed enterprises said that they’re now targeting domestic DDGS suppliers or homemade soybean meal for raw materials. It is predicted that the final judgment would further suppress DDGS import volume. CCM thinks that this may help domestic industries in a number of ways:


1. Increase corn consumption and reduce corn inventory

At present, China holds a huge corn inventory – 230 million tonnes. Additionally, the cancelation in 2016 of the purchase policy of corn for temporary storage affected corn sales seriously in some producing areas, such as Heilongjiang Province.


2. Raise domestic soybean meal prices

The largely reduced DDGS import volume will strengthen demand for soybean meal. The domestic soybean meal price will keep rising.  


3. Increase supplies of alcohol

The strengthened demand for domestic DDGS will stimulate domestic production. The supply of alcohol will further increase in the future.


China's anti-dumping and anti-subsidy duties on American DDGS companies, Jan. 2017

Source: MOC


About CCM

CCM is the leading market intelligence provider for China’s agriculture, chemicals, food & ingredients and life science markets.


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