China – Distillers Dried Grains and Solubles cargoes

28 October 2015

Members involved in the carriage of Distillers Dried Grains and Solubles (DDGS) cargoes for discharging in China should note that there have been recent instances where the colour of the cargo has been a quality issue.

DDGS is the solid remnants following ethanol manufacture. Most of the grain used in ethanol manufacture is maize, but there are varying contents of other grains such as rye and sorghum. Depending upon the grain, the temperature and moisture content during processing, the colour of DDGS can range from a very pale golden colour to a dark roast coffee colour.

DDGS is therefore not a homogeneous cargo and this is further exacerbated where it is loaded in bulk from multiple shippers, which can result in the layering of dark and pale cargo. Loading methods can also obscure the extent of the problem where, for example, cargo is loaded by spout and conveyor as the dust generated can obscure the colour of the stowed cargo. While colour differences are normal and may not have a bearing on quality in the US domestic market, the Chinese market preference is for pale DDGS.

Receivers can be quick to blame the vessel for the discolouration, resulting in demands for security while the affected cargo is segregated and analysed. Recently, the value of DDGS has plummeted, which may also have a bearing on the readiness of receivers to reject the cargo. While assessment of colour is often subjective, Members ordered to load a cargo of DDGS should be aware of the Chinese market’s preference for the paler shade. If darker cargoes are loaded, an appropriate protest may be made and the bills of lading claused as necessary.

DDGS is often used for livestock/poultry feed and the colour and nutritional value can be affected by heat. To help defend against potential claims Members should take care (and keep detailed records) during the voyage to ensure that the fuel tanks adjacent to cargo holds are not heated excessively.