KANSAS CITY, MISSOURI, U.S. — News that China has resumed buying U.S. distillers’ dried grains (DDG) after more than a year has sent prices of the co-product of corn ethanol production up 12% since Dec. 12, a veteran DDG trader said.
He quoted DDG at $185 a ton on Dec. 17, up from $165 a ton on Dec. 12 and up 28% from $145 a ton on Dec. 5. Prices surged on rumors last week that China was prepared to give government approval to import DDG containing the bioengineered trait MIR 162.
Information on China’s apparent reversal of its multi-month ban on importing bioengineered U.S. DDG hit newswires recently, but some questions remain. China has apparently not officially notified the U.S. government about any policy changes. Indications also were that the final decision may be delayed until January or February.
But a Chinese grain and oilseeds information center said a Chinese company recently bought 900,000 tonnes of U.S. DDG for December-March delivery, although the most recent purchases were at a much lower level than was typical before the ban.
“We used to sell China about 600,000 tonnes of DDG every month,” the DDG. trader said, referring to U.S. sellers of the inexpensive protein source blended into animal feed. “900,000 tonnes sounds like a lot, but delivery is over a three-month period.”
He said market expectations were that China would gradually ramp up its purchases of U.S. DDG until volume was comparable to amounts bought before the decision to ban U.S. supplies that began in Nov. 2013.
DDG also compete with millfeed as a feed ingredient.