CHICAGO, ILLINOIS, U.S. — Archer Daniels Midland Co. (ADM), one of the largest U.S. ethanol producers, and other suppliers of the biofuel face further margin pressure as China investigates imports of a related commodity, Bloomberg reported on Jan. 20.

China’s Ministry of Commerce announced last week a probe of U.S. supplies of dried distiller grains with solubles (DDGS), amid allegations that Chinese companies have been injured by unfair low prices and subsidized output. DDGS, a co-product of ethanol production, is used as animal feed. Prices are already down amid concerns about China’s announcement, according to Farha Aslam, an analyst at Stephens Inc., Bloomberg reported.

The U.S. is the largest DDGS producer and has a surplus to export while China is the biggest importer. The imposition of Chinese anti-dumping tariffs on imports would limit U.S. producers’ ability to export, Bloomberg Intelligence analyst James Evans said in a report on Jan. 19. In the first 11 months of 2015, China bought 6 million tonnes of U.S. DDGS valued at $1.5 billion, according to the U.S. Grains Council, which has called the Chinese probe “unwarranted.”

“This trade imbalance intensifies the demand risk for U.S. producers in the event that an adverse Chinese subsidy and dumping trade ruling is passed,” Evans said.

Chicago, Illinois, U.S.-based ADM’s corn-processing business, the world’s largest, is already seeing shrinking returns from ethanol amid near-record production and a steep drop in the price of gasoline, with which the biofuel is blended. The spread between the cost of corn and the price of ethanol and DDGS in Iowa, an indicator of industry margins, has narrowed 21% in the past two weeks to a record low, according to U.S. Department of Agriculture (USDA) data.

ADM shares are down 18% this year, compared with the 9.9% decline in the Standard & Poor’s 500 Index. The Andersons Inc., a Maumee, Ohio, U.S.-based ethanol producer, is down 22%. Spokeswomen for both companies declined to comment on the ethanol and DDGS markets, Bloomberg said.