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China seeking U.S. distillers’ grains for Feb-March -trade

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.

“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.
Source: Reuters