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U.S. DDGs to China to resume

Updated: 06/21/2012 @ 8:07am

China's Ministry of Commerce said Thursday that it will end an antidumping investigation against imports of U.S. distillers dried grains with solubles, or DDGS, paving the way for more imports of the animal feed.

The ministry launched the antidumping probe in December 2010 at the request of major domestic producers and last year extended the investigation for six months until June 28 this year.

Imports of U.S. DDGS--comprising protein, fiber and oils from corn that has been processed into ethanol--will benefit Chinese feedmills, whose profit margins are under pressure due to high corn prices, analysts said.

Cofco Biochemical (Anhui) Co. (000930.SZ ), Jilin Fuel Alcohol Co., Meihekou Fukang Alcohol Co. and Jilin New Tianlong Wine Industry Co. on May 10 asked the ministry to end the probe, and the ministry decided to accede to the request, according to a statement on its website. This completed the circle for the investigation, which the four companies requested to be initiated in 2010.

Demand from Chinese feedmills for U.S. DDGS is strong as it costs less that feed grains. Exporters in the U.S. also see the commodity as a significant new trade opportunity in China.

The semi-official China Feed Industry Association urged the commerce ministry to suspend the antidumping investigation in 2011, according to the statement, which added that Archer Daniels Midland Co. (ADM) also reported to the ministry that China's relevant industries didn't suffer substantial damage from the imports of U.S. products.

In 2011, China's imports of DDGS totaled 1.69 million tons, down 47% from 2010, customs data showed, as buyers feared Beijing might impose duties on imports.

Write to Zhoudong Shangguan at zhoudong.shangguan@dowjones.com

(END) Dow Jones Newswires

June 21, 2012 05:12 ET (09:12 GMT)

DJ UPDATE: China to End Antidumping Investigation Against US Distillers Grains->copyright

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