Ethanol Blog

China may once again be looking at restricting imports of dried distillers grains, as well as milo and barley, according to Tuesday's Morning Highlights market commentary by commodity brokerage CHS Hedging, LLC on Tuesday (http://bit.ly/…).

The article says that several cash trade sources report "China is taking a closer look at DDG, milo, and barley import shipments concerning phytosanitary requirements."

Trade with China has just been resuming after trade debacles in recent years over the Agrisure Viptera (MIR 162) biotech trait produced by Syngenta Ag. In early 2014, China began rejecting shipments of corn and DDGS containing the trait, causing prices of DDG to plummet as much as $70 in three days.

The remainder of 2014 left U.S. DDG exporters trying to deal with China's increasing demands and DDG prices falling to the lowest level since December 2010. Many in the industry attributed China's rejections/demand were merely to force their buyers to buy up the glut of China's own domestic DDG, which were believed to be of far less quality than U.S. DDG.

Finally, on Dec. 22, Syngenta announced it had received the safety certificate for MIR 162 from Chinese authorities and the trait would be granted approval.

Now that China has approved the biotech trait, the industry is left to wonder about the reason for the sudden concern over phytosanitary requirements concerning pests and pathogens.

An article by Agrimoney.com (http://bit.ly/…), also on Tuesday, speculated that China may be planning to curb imports of feed grains in order to "encourage domestic demand and erode what are believed to be large domestic inventories."

If China is indeed manipulating imports once again in order to reduce another glut in its domestic supply, the U.S. ethanol industry could be facing more volatility in the DDG market.

Cheryl Anderson can be reached at Cheryl.anderson@dtn.com

(ES)

© Copyright 2015 DTN/The Progressive Farmer. All rights reserved.