By Whitney McFerron
Jan. 6 (Bloomberg) — The Chinese government’s anti-dumping investigation of U.S. dried distillers grains, a corn-based feed ingredient, may disrupt trade and result in higher duties on imports, the U.S. Grains Council said.
Distillers grains, commonly known as DDGs, are a by-product of making ethanol from corn. China’s current 5 percent duty on U.S. DDGS might increase to as much as 100 percent during the dumping investigation, which will take up to a year, according to Rebecca Bratter, the director of trade development for the Washington-based council.
China’s Ministry of Commerce announced on Dec. 28 that the government would probe unfair trade practices after receiving complaints from four domestic ethanol producers. The country is the world’s biggest user of grain.
“This is potentially disruptive, and China is a very critical partner for us,†Bratter said today on a conference call with reporters. “We are dedicated to the free and open flow of trade, and we certainly want to see this resolved in the most expedient manner possible.â€
In the first 10 months of 2010, China imported $427 million of U.S. DDGS, or between 10 percent and 12 percent of U.S.
production, she said.
The four Chinese ethanol companies that filed the complaint represent about 50 percent of DDGS output in China, which produces about 3.5 million metric tons annually, Bratter said.