Brazilian DDGS flows may heighten competition for US DDGS exports: sources

Brazil's dried distillers grains with solubles entry into the Chinese marketcould reshape global trade flows, market participants said on Feb. 4, pointing to increased competition but also potential opportunities for US exporters elsewhere in Asia.

Brazil's corn-based ethanol producer Inpasa is expected to export its first DDGS cargo to China on Feb. 8, according to local media reports, following the formal opening of Chinese market access for Brazilian DDGS earlier this year. The operation would consolidate a new commercial front in animal feed between the two countries.

"All Brazilian DDGS will go to China, and that will open up more Asian homes for US DDGS," one broker said, suggesting Brazilian supply could displace US product in China while creating room for US material in other regional markets.

A second broker pointed to the broader structural trend, saying, "There are more and more DDGS in the world as ethanol production grows globally, we're already shipping it everywhere we can." Participants said expanding production in Brazil adds to a global supply pool that is increasingly looking for export outlets.

China is expected to be a major destination. The US Department of Agriculture reported that China could import around 1 million tons of Brazilian DDGS annually, underscoring the scale of potential trade flows following the approval of Brazilian shipments. In its 2025 Brazilian Production of Distillers Dried Grains and Distillers Dried Grains with Solubles report, the USDA said that, "While there are no official estimates for Brazil's DDG export potential to China, the industry projects volumes exceeding one million tons starting in 2026."

A trader cautioned that the shift may initially be competitive rather than supportive for exporters, saying it would be "more of a race rather than a benefit, but it's something to keep an eye on." Participants said competition between Brazilian and US DDGS in Asia is likely to intensify as global ethanol output continues to expand.

Platts, part of S&P Global Energy, assessed CIF New Orleans DDGS barges at $213/short ton on Feb. 4, and the Chicago DDGS truck market for the same delivery period was assessed at $175/st.