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Reduced Tariffs on DDGS Spell Opportunity for US

by 5m Editor
16 December 2010, at 12:43am

COLOMBIA - The Colombian government recently announced a reduction in tariffs for the import of US distiller's dried grains with solubles (DDGS), opening the door for more purchases of the product.

Originally set at 15 per cent, tariffs are now 10 per cent with these same rates applying to imports of US corn gluten feed (CGF) and 3,000 other items. While the changes are a result of the government’s efforts to counteract the appreciation of the Colombian peso, they also create a greater need for education on the proper use of DDGS.

"Feed manufacturers are still cautious when it comes to using DDGS," said Kurt Shultz, USGC director in Latin America and the Caribbean Region. "Many see it as an expensive product and unfamiliarity with its uses in animal feeds could limit growth in consumption.

Mr Shultz said an example is the Council’s recently conducted assessment of the profitability of DDGS in the Colombian market. The assessment found the Colombian swine industry could save as much as $8-13 million a year by using DDGS in place of higher priced feed ingredients.

"In light of these tariff reductions and the opportunities they bring, the Council plans to market the advantages of DDGS to importers and end-users in the poultry, dairy and swine sectors and show them the value this product can bring," he said.

According to Mr Shultz, the Colombian market holds much potential for US producers and passage of the US-Colombia- Trade Promotion Agreement would open the door for DDGS imports.

In 2010, Colombia imported 69,000 tons of US DDGS and 59,000 tons of CGF. However, with a free trade agreement in place along with proper market education, these imports could reach 700,000 tons per year.