By Michael Hirtzer
CHICAGO, Jan 2 (Reuters) – China is seeking U.S. cargoes of
distillers’ dried grains (DDGs) for shipment in February and
March, as easing import restrictions have re-opened the most
lucrative market for the protein-rich animal feed, traders said
on Friday.
“My regular buyers are coming back. We’re getting new
inquiries as well,” said a U.S. trader of DDGs, a byproduct of
corn-based ethanol.
At least three U.S. exporters are asking buyers for down
payments of 20 percent to as much as 35 percent for each
intermodal container of DDGs heading to China, the traders said.
Down payments, required to protect against the possibility
of government rejections, were rare until late in 2013, when
China started turning away more than 1 million tonnes of DDGs
and corn that were found to contain an unapproved genetically
modified corn strain developed by Syngenta AG known as
Agrisure Viptera, or MIR 162.
The fresh import inquiries this week followed purchases last
month. State-owned COFCO was said to have bought as much as
900,000 tonnes of DDGs. The large sales volume was a signal
Beijing was set to approve the GMO corn variety, before Syngenta
made an official announcement on Dec. 22.
China had purchased more than 4 million tonnes of U.S. DDGs
in each of the past two years before imports slowed to a
near-halt last summer, according to the U.S. Department of
Agriculture.
DDGs prices now are hovering at the highest levels since
June. Top importer China and other major buyers such as Mexico,
Vietnam and South Korea have buoyed values with their increased
demand, even as production of the feedstuff was expected to be
record-large following a bumper U.S. corn harvest and lofty
returns in domestic ethanol refining.
(Reporting by Michael Hirtzer; Editing by David Gregorio)