1. Dried Distillers Grain
Sean Bartlett
Dried Distillers Grain
EXPORT TRENDS in 2016

2. Introduction to Platts Agriculture The Chinese market snapshot
Agenda
Introduction to Platts Agriculture
The Chinese market snapshot
Non-China markets
Conclusions

3. INTRODUCTION TO PLATTS AGRICULTURE

4. Platts Biofuels/Agriculture Team

5. Platts Global Grains coverage
September 2014: Launched Daily Grains report with Black Sea wheat, Azov Sea Wheat, Sea of Marmara Wheat and Black Sea Corn assessments
November 2015: Launched Australian wheat assessment in Daily Grains
2015
2016
2017
October 2015: Launched US DDGS assessments – CIF New Orleans, Channahon trucks in Biofuelscan
TBD 2017: US wheat assessments coming

6. CHINESE MARKET SNAPSHOT

7. Chinese Market Snapshot
Source: USDA

8. Chinese market snapshot
Source: USDA

9. Chinese DDGS imports by country, 2015
DDGS volume (metric tons)
France
775
USA
6,818,571
Japan 2
Brazil 99
Canada
477
Taiwan
0.417
Source: Chinese Customs Information Center

10. Tariffs Levied
Sept. 23: Chinese commerce ministry levies 33.8% anti-dumping duty on US DDGS imports effective
Sept. 28: Ministry adds additional 10 to 10.7% anti-subsidy duty effective immediately

11. DDGS prices after probe ended
First tariff imposed
Second tariff imposed
Source: Platts

12. NON-CHINA MARKETS

13. Market factors US ethanol production has reached record levels in 2016
Record production levels
US ethanol production has reached record levels in 2016
Federal law called for 14.5 billion gallons to be blended into US fuel supplies
During summer months, 11 of 15 weeks broke 1 million b/d
Source: US EIA

14. Market Factors US ethanol production aided by low corn prices.
US corn ethanol production margins
US ethanol production aided by low corn prices.
High crush margins allowed ethanol production to continue despite lower ethanol prices
Source: Platts

15. DDGS PRICES
Source: USDA

16. DDGS purchases, first eight months of 2016 (MT)
Non-China markets
DDGS purchases, first eight months of 2016 (MT) Q1 Q2
July-Aug
World total
2,408,908
2,951,996
2,254,190
China
551,139
788,310
621,186
Source: USDA
2 April, 2019

17. Year-on-Year DDGS purchases, first eight months of year (MT)
Non-China markets
Year-on-Year DDGS purchases, first eight months of year (MT)
2015
2016
Difference
World Total
8,590,699
27,615,094
-975,605
China
5,051,264
1,960,635
-3,090,629
Source: USDA
2 April, 2019

18. Non-China Markets
Top US DDGS customers, Nos. 2-10, in metric tons
Country
2012
2013
2014
2015
Mexico
1,503,305
1,280,554
1,577,727
1,650,235
Vietnam
371,481
357,396
638,396
650,460
South Korea
345,584
394,900
690,046
636,523
Canada
593,721
474,912
456,538
512,229
Thailand
209,820
265,974
363,092
398,756
Ireland
89,556
225,421
260,518
248,281
Japan
377,620
384,432
488,178
241,031
Indonesia
165,197
236,799
282,941
230,565
Turkey
175,965
289,358
498,412
207,914
Source: USDA

19. 2016 exports for selected non-China markets
2015
2016
Difference
% change
Mexico
1,046,746
1,297,490
250,744
24%
Vietnam
332,071
687,620
355,549
107%
S. Korea
323,977
532,032
208,055
64%
Thailand
231,964
420,227
188,263
81%
Turkey
28,904
516,530
487,626
1,687%
Canada
305,022
340,621
35,599
12%
Japan
154,424
208,920
54,496
35%
Spain
36,929
89,167
52,238
141%
Colombia
71,435
111,290
39,855
56%
Indonesia
143,226
248,580
105,354
74%
Ireland
141,792
163,407
21,615
15%
Source: USDA

20. INDIA: AN UNTAPPED MARKET
Projected to be world’s fourth-largest beef producer (4.3 million MT) and world’s largest beef exporter (1.95 million MT)
Projected to be world’s fourth-largest broiler producer (4.2 million MT)
Low corn supplies on the continent competing for use in feed, ethanol production and other uses
Ban on GMOs, including in livestock feed
Bureaucracy makes business difficult at times
2 April, 2019

21. CONCLUSIONS

22. China market has yet to shake out
Conclusions
China market has yet to shake out
Existing markets, such as those in Southeast Asia, seem to be willing to take on more exports
Trade-off is lower prices
The future relationship with China, DDGS and otherwise
2 April, 2019

23. PLATTS DDGS ASSESSMENTS
Private & Confidential

24. Platts US DDGS assessment methodlogy
Currency
Contract Type
Basis
Location
Delivery Period
Min size
Unit of measurement
Dried Distillers Grain with Solubles CIF New Orleans Barge
USD
Spot
CIF
New Orleans
Delivery on a barge that has loaded in the front-month
1,500
Short ton
Dried Distillers Grain with Solubles FOB Chicago Truck
FOB
delivered to the Channahon, Illinois, rail head
Delivery 1-7 days forward from date of publication 25
Quality: Assessments will reflect export quality DDGS, protein content minimum of 25%, minimum color of 50 (according to the Hunter L test), fat minimum of 6%, and a moisture level in the range of 10% to 12%, standardized to 11.5%.
Private & Confidential

25. Chicago delivered truck assessment
Private & Confidential

26. CIF New Orleans barge assessment
Private & Confidential