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China's distiller's grains imports 'could rocket'

Exporting distiller's grains to China has "enormous" potential, and could slow China's return to being a major corn importer, a high-level research team has said.

While China imported 8,000 tonnes of corn-based distiller's grains from America last year, its pig farmers could have taken 3m tonnes - equivalent to more than one-third of US exports.

And that's before taking into account potential demand from China's poultry sector, which is 76% bigger than America's, and dairy, where the national herd are nearly three times as large.

The grains, use of which typically cuts feed costs by about 6%, are already prized in China by duck farmers for giving the skin colour and yolk a more yellow hue favoured by consumers.

"The potential for growth is enormous," a joint report by researchers at the UN, two US universities and the US Department of Agriculture, said following a visit to China.

'Serious toxin problem'

Furthermore, China's own distiller's grains (DDGS), typically as a byproduct of brewing rather than ethanol manufacture as in America, were held by farmers in low regard.

Energy sources used in Chinese livestock feed rations

Corn: 87.4%

Wheat: 10.2%

Barley: 1.4%

Sorghum: 0.7%

Other grains: 0.3%

Source: Fapri

Besides having a lower protein content, of about 8% compared with 27-34% in US, Chinese distiller's grains were typically sold in wet form, leaving loads vulnerable to "product spoilage in a very short period of time".

They were also dogged by concerns of toxic fungal residues in the corn they were made from, reflecting a "high humidity [growing] environment" and poor storage practice and facilities.

"Since whatever is in the [corn] gets multiplied three times in the DDGS product, any presence of mycotoxin in corn can possibly translate into a serious problem in the DDGS," the report said.

Red tape 

However, for China to raise its imports of US distiller's grains, which are a fraction of those bought by Asian neighbours such as South Korea, Taiwan and Vietnam, would require a shake-up of its import bureaucracy.

Make-up of 'optimal' feed ration for finishing US pigs (incl DDGS)

Corn: 59.5%

Soymeal: 15.2%

DDGS: 20.0%

Others: 5.3%

Source: Fapri

"The team was informed about cases in which the [registration] process took longer than two years," the report said.

"Entry can be quickly interrupted through regulatory intervention. Under such uncertain rules, it will likely be difficult for DDGS use in China to take root and develop into a mature market."

One factor which might prompt a regulatory rethink was the prospect of China returning in 2011 to corn imports which will reach 2.7m tonnes by 2018, on Washington estimates.

"Although there is a consensus that China will need to import more meat or feed grains to meet its fast growing food demand, what remains uncertain is what mix of products it will import," the researchers said.

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