Chinese imports of distillers' grains (DDGS) rose 60.5 percent in June from a year earlier to a record 959,935 tonnes due to robust domestic demand for the protein-rich animal feed ingredient, official customs data showed on Tuesday. China is the world's largest buyer of DDGS, a by-product of corn ethanol that is used as a substitute for corn and meal in animal feed. China buys almost all of its DDGS from the United States, the world's top exporter.
"It is quite a big volume, which may explain why domestic prices earlier slumped so much," said a senior trader who declined to be identified. Chinese buyers have cancelled or pushed back as much as 300,000 tonnes since last month, a Chinese trader said, after hefty imports put pressure on domestic prices. A drop in domestic soymeal prices to their lowest level in eight years also hurt demand, another trader said.
"Buyers are still making losses, but not as big as earlier. Arrivals in July and August should stay high at about 700,000 tonnes," said the trader. Domestic prices for DDGS have risen about 12 percent since June to 1,800 yuan ($290) per tonne offered at ports. China's DDGS imports in the first half of the year were down 24.8 percent from a year earlier, according to data published by the General Administration of Customs, after imports in the first quarter were interrupted by a block on a genetically modified corn strain.
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