Ethanol industry leaders want the Obama administration to launch a complaint with the World Trade Organization against China’s anti-dumping investigation into dried distillers grains imported from the United States.
In a letter to President Barack Obama on Wednesday, Bob Dinneen, president and chief executive officer of the Renewable Fuels Association, and Tom Buis, chief executive officer of Growth Energy, said China’s pursuits have hurt ethanol producers.
“The uncertainty and market risk resulting from China’s actions has already triggered substantial financial losses for U.S. distiller’s grains producers,” the letter said. “Distiller’s grains prices have plunged more than 25% since last summer, while prices for corn and other feedstuffs have been stable or even increased slightly.
“At a time when both U.S. ethanol producers and farmers are facing serious economic challenges, it is estimated that China’s actions have already resulted in distillers grains losing $30 to $35 a ton in value. This is equivalent to an annualized aggregate loss of $1.2 billion to $1.6 billion to U.S. ethanol producers, many of whom are small businesses in rural America.”
Dinneen and Buis said those losses would continue to mount “potentially to $50 to $60 a ton or more, if the anti-dumping and countervailing duty actions ultimately result in a total collapse of distiller’s grains exports to China, meaning a loss to the U.S. economy of more than $2 billion.”
Dinneen and Buis asked the president to direct the Office of the U.S. Trade Representative, Department of Commerce and Department of Agriculture to “challenge both the process and preliminary determinations made by China’s investigating authority through comments to MOFCOM (Ministry of Commerce) and through the World Trade Organization.”
In addition, the groups asked the president to “work closely with the U.S. distiller’s grain industry to mount an aggressive defense of our access to the Chinese livestock feed market throughout China’s anti-dumping and countervailing duty investigations.”
On Jan. 12, 2016, China filed anti-dumping and countervailing duty cases against the ethanol industry. DDG is a widely-used livestock feed and co-product of ethanol. In 2015, China was the largest foreign buyer of DDG produced in the United States — representing about 50% of all DDG exports.
China asked U.S. ethanol companies to complete what Dinneen and Buis said was “an extremely lengthy and complex preliminary questionnaire” related to China’s investigation — within a two-week period.
The questionnaire was used by the Chinese to select a preliminary sample of companies to participate in the anti-dumping and countervailing duty investigations.
About 20 companies filed individual responses to the questionnaire, according to the letter. An additional 50 to 60 companies filed a joint response to the questionnaire because they “were unable to provide specific data related to DDG exports to China,” the letter said.
“These transactions were facilitated through third-party traders or exporters, making it impossible for producers to trace the final destination,” the letter said.
More on Distillers Grains
On Wednesday, China published notices on its anti-dumping sampling results and countervailing sampling results. The country preliminarily selected three ethanol companies that filed individual responses to the questionnaire, to then take part in China’s investigations of both trade actions.
“Those companies that participated in a joint response to the questionnaire were determined by MOFCOM to have not submitted the necessary information requested in the questionnaire within the specified time,” the letter said, “and are thus subject to punitive duty rates should China determine the facts support the imposition of anti-dumping and/or countervailing duties on U.S. DDG exports.”
Dinneen and Buis said comments concerning China’s sampling methodology and preliminary decisions resulting from a review of the questionnaires are required to be submitted to the Chinese government by March 7.
Todd Neeley can be reached at email@example.com
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