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 soyameal 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.
China, the world's second-largest corn consumer, imported 872,919 tonnes of corn in June, up from 27,250 tonnes in June 2014, official data showed. Ukraine remained the largest supplier in June, with 764,178 tonnes. China imported almost no corn from the Black Sea region in June last year. Imports of barley rose 198 percent from a year before to 974,720 tonnes. Chinese feed mills have increased imports of the grain to substitute for expensive domestic corn.
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