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Grains Council scrambles to answer dumping case

DANIEL LOOKER 01/06/2011 @ 1:43pm Business Editor

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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