China suspends animal feed imports

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Several major Chinese importers have suspended imports of an animal feed from the U.S., due to concerns China's government may levy high duties on the product after it launched an anti-dumping investigation.

The U.S. farm industry views distiller's dried grains as a tremendous new trade opportunity in China, and Chinese imports rose strongly this year amid expectations the commodity will prise feedmeal market share away from corn.

Guangdong Jun Jie Agricultural Trading Co. halted inbound shipments of DDG, as the corn-ethanol byproduct is known, earlier this month due to the uncertainty of the policy outlook, company Chairman Xie Xiongping told Dow Jones Newswire by phone Friday.

As import volumes are small relative to other commodities, "we make only thin profits from importing commodities such as DDG, so we suspend (such imports) when the policy outlook is uncertain," he said.

Shandong Liuhe Group Co., a major animal feed manufacturer in China, is due over the next few months to receive shipments of U.S. DDG it previously ordered, but isn't placing new orders, Zhou Xiaoyan, a grain purchasing manager at the group, told reporters in a phone interview Friday.

"We are importing now, but have cancelled shipments from March," she said, adding that high DDG prices at present will also limit Liuhe's purchases. Local analysts have said other importers have also suspended shipments.

An official responsible for animal feed imports at Cofco Group, also a major importer, declined to comment.

China's Ministry of Commerce said in December that it has opened an anti-dumping investigation into U.S. DDG. It expects to complete the probe by Dec. 28 this year but could extend the investigation to next June.

China likely imported more than 3.1 million metric tons of DDG from the U.S. last year and produced about the same amount locally, accounting for less than a twentieth of the domestic feedmeal market, according to industry data. Still, imports were up sharply from 652,000 tons in 2009.

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