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Grains Council scrambles to answer dumping case

With only 20 days allowed to respond to a December 28
antidumping case against U.S. exports of distillers grains to China, the U.S.
Grains Council has been working around the clock to help this nation’s ethanol
industry respond, a Council staffer said Thursday.

Members of the industry who don’t register with China as
interested parties could face up to 100% duties that could be imposed any time
during an investigation that could take up to a year, said Rebecca Bratter, the
Council’s director of trade development. Those who do register might also face
tariffs, but at a 40% to 50% level, she said. Currently, DDGS go into China
with a low tariff of 5%.

“The Chinese government has the ability to impose duties at
any time during their investigation. That is something we’re very concerned
about,” Bratter told Agriculture.com during a press conference.

China’s demand for distillers grains, known as DDGS (dried
distillers grains with solubles), has grown from virtually nothing three years
ago to 1.3 million metric tons (MMT) in 2010, almost matching the volume of
U.S. corn exports. The DDGS shipments represent about a tenth of the output of
the ethanol coproduct and was valued at more than $200 million last year. DDGS
represent about a third of the corn that goes in to making ethanol and,
depending on market conditions, they can be a key ingredient in a plant’s
profitability.

Bratter said the Chinese investigation will have two parts.
First, it will look at claims by four Chinese ethanol companies that they’ve
suffered economic injury. Then it will look at the pricing by a smaller number
of U.S. DDGS  exporters to
determine if the exports have been dumped into the Chinese market at a cheaper
price than in the U.S. or a third country.

The Chinese companies account for half of China’s own
production of DDGS, she said.

Before the case was filed, USGC had been expecting exports
of U.S. DDGS to grow to 2.5 MMT to 3 MMT this year.

The antidumping case is just one in s string of recent trade
disputes between the U.S. and China. The U.S. has alleged that China is
violating World Trade Organization rules to protect its own wind energy manufacturers
and China already has claimed that the U.S. is dumping sport utility vehicles
in its auto market.

Chinese President Hu Jintao will visit President Barack
Obama at the White House on January 19, where trade tensions are likely to be
discussed. Batter said it’s safe to asume that her organization wants Obama to
bring up the DDGS dispute and to ask that the industry be treated fairly. 

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