India Provides Duty Concession on DDGS Imports from US to Support Domestic Feed Supply

India has introduced a quota-based duty concession on 5 lakh tonnes of dried distillers grains (DDGS), which is just 1% of the country's total consumption. This measure is part of the initial phase of a bilateral trade agreement. An official stated that DDGS will enhance domestic feed availability, meeting growing demand without diverting food grains meant for human consumption.

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The domestic consumption of animal feed stands at 500 lakh tonnes, with the US receiving a quota of only 5 lakh tonnes. This represents merely 1% of the total consumption. The official noted that importing DDGS helps reduce the need for corn and soybean imports for feed purposes.

Impact on Domestic Markets

Access to DDGS is expected to lower feed cost fluctuations, benefiting poultry, dairy, aquaculture, and livestock producers. This move aims to curb food inflation by easing pressure on domestic corn and soybean markets, thus supporting the availability and affordability of staple grains.

India's feed demand is experiencing significant growth due to population increase, rising incomes, and urbanisation. This has led to higher demand for animal feed ingredients like corn (200 lakh tonnes), wheat (65 lakh tonnes), and soybean meal (62 lakh tonnes), which together make up nearly two-thirds of total feed consumption.

Long-term Feed Demand Projections

The growth in India's feed demand is structural and long-term. The 1% DDGS import quota is a practical, low-risk strategy. It diversifies imports from the US in small quantities, reduces corn and soybean imports for feed, supports livestock growth, stabilises prices, and aligns with national food security and export goals.

Domestic feed supply faces constraints due to limited arable land and productivity gaps. Feed demand is projected to outpace domestic supply growth, necessitating imports by the early 2030s under all realistic growth scenarios.

Current Import Trends

In 2021, India imported 15 lakh tonnes of soybean meal due to domestic price pressures. Currently, India imports over 6 lakh tonnes of animal feed from key suppliers such as Sri Lanka, China, USA, Thailand, and Nepal. Additionally, it imports 6 lakh tonnes of soybeans from Niger, Togo, Benin, and Mozambique, along with 9 lakh tonnes of corn from Myanmar, Ukraine, Singapore, and UAE.

This strategic import approach aims to support India's growing demand for animal products while ensuring stable prices and aligning with broader food security objectives.

With inputs from PTI