Dim Sums: Agricultural Markets in China

China has opened its market to Brazilian distillers dried grains (DDG), a co-product of distilling fuel ethanol from corn that is a cost-efficient ingredient in animal feed. This will further enhance Brazil's dominance as a supplier of China's agricultural imports. China was once a big market for U.S. DDG, but those sales were diverted to other countries after China hit them with steep duties. Exports of Brazilian DDGs to China are expected to grow at a rapid pace. Brazil's corn-based ethanol production has been growing rapidly, and the Brazilian industry has been eager to gain access to China's market for its DDG coproducts.  According to S&P Global  Brazil's industry has been working hard to gain access to China's market. A Brazilian official told S&P Global, "[W]e continue to push forward with a major goal: opening up the Chinese market, ensuring even more sustainability for this sector." An estimate circulated in news media  forecasts that ...

China has agreed to open its market to Brazilian distillers grains and peanut meal with a sanitary and phytosanitary protocol between China's General Administration of Customs and Brazil's Ministry of Agriculture and Livestock announced today. Distillers grains produced from Brazilian corn and meal produced from Brazilian peanuts that meet requirements specified in the agreement can be imported to China as of the date of the announcement.  Both products are used as ingredients in livestock feed.  Distillers grains are co-products of corn ethanol production, including distillers dried grains (DDG) and distillers dried grain with solubles (DDGS). Brazil produced an estimated 4.2 million metric tons of distillers grains in 2024. China was the largest export market for U.S. DDGS with 6.5 million metric tons exported in 2015. Exports were redirected to other markets after China assessed antidumping and countervailing duties on U.S. DDGS in 2016. In 2024 the United States exported ...

There are rumors that China's Ministry of Commerce is mulling an antidumping investigation to slow imports of U.S. Distillers Dried Grains with Solubles (DDGS). On October 27, 2015, China's Farmers Daily published a collection of articles from a "corn industry alert" meeting held by the Ministry of Agriculture's Information Center on October 9 where industry representatives discussed how to deal with problems of soaring corn stockpiles, declining prices, weak demand and pressure from imported corn substitutes. Two of the articles called for limits on DDGS imports to help the domestic ethanol industry return to profitability. DDGS is the by-product of manufacturing ethanol from corn. China also has manufacturers of ethanol for fuel, beverage and industrial uses who rely on selling distillers grain by-products for a significant portion of their revenue. Domestic DDGS prices have tumbled by half or more over the past year. One price report today says DDGS pr...

China's Inspection and Quarantine authority has issued a bulletin ordering its local bureaus to test for the presence of genetically modified material in imported distillers dried grains with solubles (DDGS) and related corn and oilseed processing by-products. Shipments containing unapproved GM material are to be returned or destroyed. This issue has already severely disrupted corn trade over the past month and will now likely disrupt trade in DDGS, a substitute for corn and protein meals that has been gaining in popularity among Chinese feed mills. The December 24 bulletin notified local inspection and quarantine bureaus that the Shanghai bureau had detected MIR162, a GM corn variety that China has not approved for import, in a shipment of DDGS. Local bureaus were ordered to abandon existing safety risk monitoring plans and begin testing samples of all shipments of corn byproducts for unapproved genetically modified material. Shipments that are found to contain unapproved mater...

As forecasts of Chinese corn imports inflate, it's worth keeping in mind that China has a tariff rate quota (TRQ) system that limits corn imports to 7.2 million metric tons annually. Some of the arcane restrictions associated with the system could limit imports by even more. A closer look shows that the TRQ system is stacked in favor of state-owned companies...er, a state-owned company. Last month, the National Development and Reform Commission announced the annual application for 2012 corn import quotas . The total quota available is 7.2 mmt, of which 4.32 mmt is reserved for state-owned traders. That leaves 2.88 mmt for private companies. These amounts were set at the time of China's WTO accession in 2001 and have not changed since then. Corn imported within the quota is assessed a tariff of just 1% while over-quota imports are charged a tariff of over 70%. According the NDRC announcement, applicants for corn quota must register with the state commercial and industrial manag...

On December 28, China announced an antidumping investigation against imports of U.S. distillers dried grains with solubles (DDGS), the by-product of ethanol production which is used as an animal feed ingredient. An earlier post is here . A January 10 article on the yumi.com.cn site offers some speculation on what may have prompted the investigation of DDGS. The article describes how burgeoning demand for protein among Chinese feed mills prompted the imports. U.S. DDGS has better quality and lower price than domestic DDGS. DDGS imports are not subject to quotas nor limitations on GMO content, so compared with corn, “import problems are relatively easy to solve, the purchase method is relatively convenient.” The article emphasizes competition between imported and domestic DDGS. The author points to a declining trend in Chinese DDGS prices during 2010 that coincided with the imports. He claims that the declining income from the DDGS byproduct combined with high corn prices has squeezed p...