In this file:
· China Cracks the Door Open for US DDGS Exports
· China drops VAT on U.S. distillers grains
China Cracks the Door Open for US DDGS Exports
BY DTN/Progressive Farmer
via KTIC (NE) - November 13, 2017
China’s Ministry of Foreign Affairs announced on its website that it would again allow U.S. distillers dried grains with solubles (DDGS) to be imported without charging an 11% value-added tax (VAT), the U.S. Grains Council (USGC) reported Nov. 9. The announcement was made in a report of key areas of consensus between the United States and China during President Donald Trump’s official visit that week.
I spoke to USGC President and CEO Tom Sleight about this latest news, which had been rumored since June. He said China’s statement to remove its VAT on imports of U.S. DDGS “opens the door a little” for U.S. imports. “We are pleased to see this move, which we’ve been working toward for months,” said Sleight.
However, while the VAT has been removed, the anti-dumping and countervailing duties remain, noted Sleight. China’s Ministry of Commerce began anti-dumping and countervailing duty investigations related to U.S. DDGS exports to its country in January 2016. Those cases resulted in a final ruling against the U.S. on Jan. 10, 2017, with China setting anti-dumping duties at a range from 42.2% to 53.7%, while anti-subsidy tariffs were set between 11.2% and 12%.
Along with the Jan. 10 duties applied to U.S. DDGS, Sleight said that also meant an end to the “ongoing exemption from paying the VAT. The combination of the duties and the VAT made U.S. DDGS exports to China even less competitive, affecting market prices and export flows globally.”
Those “penalties,” applied to both U.S. distillers dried grains with or without solubles, caused U.S. exports to China to fall from 5.4 million metric tons in 2015 to 3.3 mmt in 2016 and just 739,000 tons so far in 2017, according to USGC.
The council’s staff members in China and the United States have been working closely with the U.S government at the highest levels for nearly a year to emphasize the importance of this $1.5 billion market to the U.S. grains and ethanol industries.
“This change will immediately improve the competitiveness of U.S. DDGS in what was once our top market, which is a very positive thing,” said Sleight. He also noted that this may be a step, albeit small, toward a possible negotiation over the stiff duties and tariffs U.S. DDGS exports to China still face.
DDGS PRICES GAIN ON CHINA NEWS, U.S. RIVER ISSUES ...
China drops VAT on U.S. distillers grains
By Tom Steever, Brownfield
November 13, 2017
China has dropped its 11 percent value-added tax on imported U.S. dried distillers grains. U.S. Grains Council CEO Tom Sleight tells Brownfield Ag News the move by China comes as a result of President Trump’s Asia trip.
“We still have other tariff issues in China on U.S. DDGs coming from anti-dumping and countervailing duty tariff,” said Sleight, “but at least we’ve removed one obstacle, that being the value-added tax; it makes us a bit more competitive than we were yesterday.”
China reduced U.S. DDG imports, the price dropped, and other countries began buying more, said Sleight.
“It’s not an immediate slam-dunk that we’ll be sending boat loads and boat loads of DDGs to China because other markets have stepped in,” said Sleight, “which is great.”
Remaining anti-dumping and countervailing duties on U.S. DDGs are as high as nearly 54 percent...
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