In a recent study commissioned by the U.S. Grains Council, the respected Chinese market analysis firm JCI reported
that the new Five-Year Plan in China will restrict ethanol and dried distiller’s grains with solubles (DDGS) production
growth to no more than 5 percent annually.
Assuming an appropriate price for DDGS relative to corn and soybean meal,
JCI projects that China’s imports of DDGS
will grow steadily, reaching 6 million metric
tons in 2016 and accounting for 42 percent of
total DDGS use.
As this chart illustrates, Chinese ethanol/
DDGS production followed a rapid growth
trend until 2007.
At that time, as growth in
corn demand outstripped growth in production,
the government of China placed limits on
domestic ethanol production growth, leading
to a dramatic increase of DDGS imports –
almost all from the United States.
As DDGS
imports reached 3.1 million metric tons in
2009/10, China announced an anti-dumping
investigation which led to a slow-down in
DDGS exports last year.
JCI does not foresee
in its outlook that the investigation will result
in significant barriers to U.S. DDGS exports to
China in the future.
For more information, call 202-789-0789.
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