USGC: duties on DDGS imports to China possible

by World Grain Staff
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WASHINGTON, D.C., U.S. — It could take more than a year to resolve charges of dumping against U.S. dried distiller’s grains with solubles (DDGS) instigated by China, but the nation could impose duties on DDGS imports at any time, said U.S. Grains Council officials on Jan. 6.

“The Chinese government has the power to impose duties at any time during the investigation,” said Rebecca Bratter, USGC director of trade development. “A duty before the investigation concludes will likely have an impact on trade.

“This is a very critical partner for us in trade. We are dedicated to the free and open flow of trade. We want to see this issue resolved in the most expedient matter possible.”

Duties, which are now 5%, could increase to as much as 50% or more, depending on whether a company is registered as an interested party in the case, Bratter said. Registering as interested party means a company is agreeing to be part of the resolution process, she said. Not registering is considered to be uncooperative.

“If you don’t register at all, the duty could be 100% or more,” Bratter said.

The USGC is coordinating an industry-wide registration process for interested U.S. companies. The deadline for registration is extremely short and further complicated by the need to translate all registrations into Chinese, the USGC said.

U.S. companies that wish to participate must e-mail the USGC at grains@grains.org with contact information by the close of business Jan. 7. From there, legal counsel will contact each participant and provide the necessary registration form and instructions.

The registration form must be completed and returned to the law firm by the close of business Jan. 10. The law firm will assume responsibility for translation and submission to China’s Ministry of Commerce by the Jan. 17 (Beijing) deadline.

On Dec. 28, the Chinese Commerce Ministry said it is investigating how much damage the alleged dumping of DDGS has caused to China’s own industry from Jan. 1, 2007 to June 30, 2010. The claim was filed by four Chinese ethanol producers, Bratter said, who represent 50% of the domestic DDGS market. China’s total domestic DDGS market is expected to reach 3.5 million tonnes this year.

The investigation process runs for a year, Bratter said, but the Chinese government has the ability to extend it for six months.

In three years, the amount of U.S. DDGS exported to China has increased significantly, Bratter said, from virtually nothing to an estimated 3 million tonnes. That represents 10% to 12% of total DDGS production in the U.S., and has a value of $427 million.

“The market has been very dynamic. We consider it to be the normal course of trade with a country with such a strong economy as China,” she said. “What happened in China is not limited to that market. It is a trend in a number of markets around the world.”
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