U.S. grain shippers are warning that an anti-dumping investigation by China's ministry of commerce could disrupt trade flows, the latest in a series of skirmishes over trade between the United States and China.
The Chinese government launched the investigation into imports of dried distillers' grains on Dec. 23 after complaints by four domestic DDG producers. DDG, a byproduct of ethanol production, is highly valued as livestock feed. China is expanding livestock production and domestic DDG production can't meet the demand. The U.S. produced some 44 million metric tons of DDG in 2009-2010, compared with China's average annual production of 3.5 million tons.
By The Numbers: U.S.Trade with Mainland China.
The USGC said the investigation was surprising, and market analysts note proving a dumping case will be difficult since Chinese importers are willing to pay a higher price for the U.S. product because of its higher quality.
Observers said the DDG investigation could be in retaliation for a U.S. complaint to the World Trade Organization last month that China was illegally subsidizing wind turbine manufacturers.
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