Chip Councell, Chairman of the U.S. Grains Council (USGC), recently returned from a USGC trip to Myanmar and India where the trade team evaluated import potential and expanding USGC programs. In Myanmar, there were positive attitudes toward increasing trade with the U.S. but the political changes needed will be difficult to achieve. The country is experiencing a high growth rate in their poultry and feed sectors of around 15%. Everyone mentioned that there was new competition coming into feed provisions and livestock production. National and regional livestock federations will be key to understanding the policy environment and building momentum in the market.  

“There is a tendency to underestimate the potential as well as underestimate the challenges when it comes to India,” stated Councell. They currently import corn from Ukraine under competitive trade agreements, which could present a major trade impediment to the U.S. The team saw great potential to move the needle in India for demand for US grains. The government will act quickly if need arises for grain imports. The ethanol blending process lies in the hands of the central government there as well potentially presenting challenges for ethanol imports. 

Overall, there was potential for trade seen in both countries. Members from the trip will be making their recommendations to expand USGC programs in these countries to the board next week. Councell hopes that these programs will be revamped over the next year or two. 

In  a letter to President Donald Trump this week, the U.S. Grains Council (USGC), Renewable Fuels Association (RFA) and Growth Energy are asking for help "in urgently addressing China’s recent implementation of protectionist trade barriers that are shutting out U.S. exports of ethanol and distillers dried grains (DDGS)." Specifically, the three groups are asking the incoming U.S. Trade Representative to put China’s recent actions near the top of the administration’s China trade agenda.

China has grown to be a top export market for U.S. DDGS. In 2015, the country imported 6.5 million metric tons of the ethanol co-product, worth $1.6 billion and accounting for 51 percent of total U.S. DDGS exports. By the end of 2016, China had become the U.S. ethanol industry’s third-largest export market, receiving nearly 20 percent of total exports. Nearly 200 million gallons of ethanol worth more than $300 million were shipped to China last year.

As the letter explained, China’s recent actions have contributed to lower prices for ethanol and DDGS. Ethanol prices have fallen 15 percent since mid-December 2016 while DDGS prices have fallen steadily since the summer of 2016. DDGS prices are currently approximately 40 percent lower than in June 2016.

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