CCM - DDGS: import volume to reduce dramatically in China 2016 12-23-2015

CCM predicted that China’s import volume of DDGS would reduce dramatically in 2016 because China is boosting the consumption of domestic corn and the imported DDGS is overstocked at ports.


Along with the slumping corn price in China, imported substitutes for corn no longer have advantage. The import volumes of DDGS, sorghum and barley gradually decline. In Oct., the import volumes were,

  • DDGS: 660,193 tonnes, a MoM fall of 29.21%;
  • Sorghum: 681,868 tonnes, a MoM fall of 36.12%;
  • Barley: 998,367 tonnes, a MoM fall of 22.91%.

Besides the decreasing cost performance, the policy is another factor led to the declining import volume of DDGS.

Currently, China’s imported DDGS is still in the shadows of anti-dumping investigation. Many Chinese traders have reduced the import volume due to the rumor of anti-dumping. Additionally, Chinese government initiated the automatic import license system on imported DDGS since 1 Sept., 2015. Many traders could not obtain import licenses because of the strict requirements and cumbersome application procedures.


China's imports of DDGS in Jan. 2013-Oct. 2015

Source: China Customs




As the end of 2015 comes, it is predicted that the import volume of DDGS would reduce sharply in 2016.

Increasing import volume of substitutes for corn goes against Chinese policy

It cannot be denied that Chinese government has strong control power on the market. Reviewing the import history in recent two years, in Oct. 2014, Chinese government banned the imported genetically modified (GM) DDGS (MIR162), which significantly pulled down the import volume from 539,000 tonnes in Sept. to 26,000 tonnes in Dec., decreasing by over 500,000 tonnes.

Then in Dec. 2014, the government announced to lift the ban on GM DDGS (MIR162) and then the import volume rebounded to 243,000 tonnes. Notably, policy plays an important role in the import market of DDGS.

In fact, Chinese government does not expect imported DDGS to squeeze the domestic corn market because this will hinder the government to boost the consumption of domestic corn. Therefore, it is estimated that Chinese government would strengthen the automatic import approval on DDGS in the future.

Meantime, the 13th Five-year Plan shows that the import market of substitutes for grains will be limited in the future. It is pointed out that ensuring the grain safety would be an eternal topic in China.

Increasing import volume of substitutes for corn does not come in line with Chinese market status

Import volume of DDGS hit record high in June-Sept. 2015. However, the sluggish downstream livestock market did not recover completely. The poor sales led to overstocked inventory at ports. According to China Customs, at the end of Nov., the inventory of imported DDGS reached about 1.32 million tonnes at China’s major ports, approaching the highest record - 1.36 million tonnes. How to quickly consume the imported DDGS at ports becomes a greatest difficulty for traders.

For this, part of import traders has conducted price-off promotions. The quotation was about USD295/t, which was lower than the purchase price. Some traders have suffered losses and some even disclosed that they are likely to exit the DDGS trading market in 2016 under losses and unclear policy.


Under the slow-growing economy in China, the price trend of corn, whether the anti-dumping investigation can be put on record and the DDGS inventory at ports at the end of 2015 will be the influential factors on the import volume of DDGS in 2016.

Nevertheless, the current situation is not optimistic. Since China encourages the consumption of domestic corn, corn price will remain at low level in 2016. Homemade DDGS enjoys low production cost, which will squeeze the market space of imported one.

In Jan.-Oct., China imported 5.93 million tonnes of DDGS, sourced from China Customs. Based on the inventory and policy, the figure will further decline in Nov. and Dec. It is preliminary estimated that the total import volume is around 6.30 million tonnes in 2015 and the figure will record a YoY drop of 20% in 2016.

If you would like to know more about the DDGS industry, you could have a look at our product: Corn Product China News.

About CCM:

CCM is the leading market intelligence provider for China’s agriculture, chemicals, food & ingredients and life science markets. Founded in 2001, CCM offers a range of data and content solutions, from price and trade data to industry newsletters and customized market research reports. Our clients include Monsanto, DuPont, Shell, Bayer, and Syngenta. CCM is a brand of Kcomber Inc.


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Tag: DDGS corn

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