By Cheryl Anderson
DTN Staff Reporter
Imports of certain U.S. grains and dried distillers grains with solubles to China will need to be registered beginning Sept. 1, according to a recent announcement by China's Ministry of Commerce.
All Chinese importers of DDG, sorghum, barley and cassava will need to register details of their purchases under the new system and apply for import permits for shipments.
Although there had been some indications that China was planning on taking steps to monitor imports more closely, the announcement last week was a bit of a surprise, according to Tom Sleight, president and chief executive officer of the U.S. Grains Council.
News reports following the announcements referred to the move as China's wish to monitor imports more closely. However, suspicions of China's trade decision remain after it's shutdown on DDGS imports over the MIR 162 biotech trait in 2014 wreaked havoc on the U.S. DDGS market, causing prices to plummet.
Industry experts theorize that China new regulations may have more to do with their glut of corn and their wish to monitor DDGS imports when they need to ensure end users purchase their own domestic corn first. In the past year, China has imported increasing amount of DDGS and sorghum especially, since even importing such grains/coproducts was less costly for livestock rations than the country's own domestic corn.
Sleight believes the two may be related, especially since the Council met with China's Ministry of Commerce officials.
"China does have a lot of corn stock. They also have some issues in terms of supply and demand for internal corn production" he said. "There are definitely some concerns there."
Although the registration of DDGS imports will begin on Sept. 1, Sleight said the process has been in place with soybeans for a while. This is a tracking process done through the China Chamber of Commerce of Import and Export of Foodstuffs, Native Produce and Animal By-Products (CNFA), an organization Sleight said the Council knows well and has worked with before.
The new requirements shouldn't be over-burdensome in terms of cost or red tape for Chinese DDGS customers, but will just take a little getting used to, Sleight said.
"It will be a little more difficult for buyers with the additional paperwork, but once they get used to it, I think everyone will settle into business as usual," he said. "It just may take a few weeks."
Sleight added that both importers and exporters can learn from the process that is in place currently for soybeans.
Overall, Sleight said the new regulations imposed on Chinese importers are not something that is as concerning as the approaching deadline.
"How quickly those permits get processed by the September 1st deadline is probably the biggest issue right now," he said.
Exporters of DDGS now need to engage, help with the process and work out the new import requirements aggressively.
"Fear could slow down some trade," he said. "But Chinese end users -- both sorghum and DDGS, like the product and want to keep buying it.
Although trade with China remains complex, Slight said that it is important for the Council to continue communication, adding that Council members met last week with CNFA.
"Our job is to be there and be in touch with both importers and exporters," he said. "We will all be sort of evolving as we go along."
Cheryl Anderson can be reached at cheryl.anderson@dtn.com.
(CC\SK)
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