Imports of US feed grains halted over fumigation

CHICAGO: Exports of a key animal feed ingredient from the United States to Thailand have stopped due to new fumigation requirements imposed after beetles were discovered in a shipment last year, American traders say.

Thai government officials said US shipments of distillers’ dried grains (DDG) required certificates showing they had been “properly fumigated”. Traders on Friday said sales had effectively been halted while the two governments negotiate which gas is best for fumigation.

Thailand in 2017 was the fourth-biggest overseas market for DDG, importing 738,413 tonnes of the high-protein feed that is used in poultry and livestock farms, according to data from the US Department of Agriculture (USDA).

Thai authorities discovered the Khapra beetle in two DDG shipments from the US, in August and November last year, according to Osama El-Lissy, a deputy administrator for the Animal and Plant Health Inspection Service at the USDA.

Since Jan 1, Thai regulations require all such shipments entering the country to be fumigated with methyl bromide. However, many US shippers would prefer to use phosphine, El-Lissy said, adding that the USDA would send information about the process to Thailand over the weekend.

“Right now, I can’t ship,” one US DDG exporter said, requesting anonymity because he was not authorised to speak with the media. “Trade is shut down.”

The issue threatened to dent what had been a rare bright spot for US ethanol makers. An oversupply of ethanol has forced many biofuel makers to cut production. China, which formerly was the top importer of both DDGs and ethanol, has largely stopped buying the products due to the Washington-Beijing trade war.

But relatively robust demand for DDG elsewhere in Asia and in Mexico has bolstered prices, helping ethanol producers offset losses in the biofuel market.

Bids for bulk cargoes of DDG shipped by barge to the US Gulf Coast export market were about $176 per tonne on Thursday, down from $185 per tonne a week ago.

Vietnam halted DDG imports in 2017 before banning imports after officials there said shipments were contaminated by beetles. That ban was lifted after US and Vietnamese officials agreed on fumigation protocols.

“It’s one more market we can’t muck up,” another US trader for an ethanol producer and DDG exporter said of Thailand.