Three US grain and ethanol industry groups representing have written to US president Donald Trump to urgently address China’s increased tariffs on US ethanol and its by-product – distillers’ dried grains (DDGS) (see Biofuel News, OFI February 2017).

China's recent actions are significantly injuring US ethanol producers and farmers," the Renewable Fuels Association (RFA), Growth Energy and the US Grains Council wrote in a letter on 7 February.

"We respectfully request that your administration, and specifically the incoming US trade representative, place the Chinese government's injurious trade barriers against US ethanol and DDGS near the top your China trade agenda."

In January, China announced that anti-dumping duties on DDGS – used for animal feed – would range from 42.2%-53.7%, up from 33.8% in its preliminary decision in September. Anti-subsidy tariffs would range from 11.2%-12%, up from 10%-10.7%.

This followed an earlier decision to increase tariffs on imported US ethanol from 5% to 30%.

The three groups wrote that in 2015, China imported 6.5M tonnes of US DDGS worth US$1.6bn, accounting for 51% of the country’s total DDGS exports.

“By the end of 2016, China had also become the US ethanol industry’s third-largest export market, receiving nearly 20% of total exports. Nearly 200M gallons of ethanol worth more than US$300M were shipped to China last year,” they wrote.

The three groups said China’s recent actions had contributed to sharply lower prices for both ethanol and DDGS in recent weeks.

“Ethanol prices have plummeted 15% since mid-December 2016, as Chinese buyers have cancelled shipments. Meanwhile, DDGS prices have fallen steadily since the summer of 2016, when it became apparent that Chinese duties on DDGS were imminent. Today, DDGS prices are approximately 40% lower than in June 2016.”