Brazil eyes global feed market with soaring DDGS output

Brazil’s booming corn ethanol industry is driving a surge in dried distillers grains with solubles production, and producers — especially in Mato Grosso state — are teaming up with local authorities to open new international markets, with a major push underway to secure export access to China.

Brazil currently exports to 18 countries — 14 of which opened their markets recently, including Mexico, the UK, Canada, and Vietnam.

“But we continue to push forward with a major goal: opening up the Chinese market, ensuring even more sustainability for this sector,” Agriculture and Livestock Minister Carlos Fávaro said at a corn ethanol industry event in Mato Grosso in early April.

Although China is a major destination for international DDGS trade, it has yet to import the product from Brazil due to the absence of a bilateral sanitary agreement.

The potential deal is part of a broader push by the Brazilian government to deepen trade ties with China, which also includes ongoing negotiations over fish exports and expanding the list of Brazilian meatpacking plants authorized to export to the Chinese market.

According to the Brazilian government’s official agenda, the DDGS agreement was part of a bilateral meeting held on April 22 between the Ministry’s Secretary of Trade and International Relations, Luis Rua, and China’s Vice Minister of the General Administration of Customs, Lyu Weihong.

To support international sales, Brazil’s Agriculture Ministry is also working on new quality regulations for DDGS exports. “A public consultation will be opened soon, and once we reach consensus, the regulation will be published,” said Hugo Caruso, director of the Department of Plant-Origin Products Inspection. Standardizing DDGS quality is seen as key to accessing markets that require rigorous certification.

With tensions escalating between the US and China, Brazilian officials view this potential agreement as a strategic opening in a market traditionally dominated by US suppliers.

US industry participants also see knock-on effects across Asia. “This is actually a good thing,” a US-based market participant said. The source added that Brazil has been shipping competitively priced product into markets like South Korea and Vietnam, adding that if China begins absorbing some of that volume, it could ease pressure and reopen opportunities in those regions for US exporters.

If finalized, the agreement would mark a key step in Brazil´s push to expand its role in global feed supply chains, offering new market options for exporters and reshaping trade flows across the whole DDGS market.

The country’s output is projected to reach around 4 million tons in the 2024-25 season, up from 3.04 million tons the year prior. Between 800,000 and 1 million tons could be exported, reflecting Brazil’s expanding role as both an ethanol producer and a global supplier of animal feed ingredients.

Mato Grosso leads state-level push

At the state level, Mato Grosso — home to much of Brazil’s corn ethanol industry — is leading parallel efforts to build bilateral partnerships. Notably, Chinese agribusiness giant Donlink is eyeing imports of DDGS and other pulses such as sesame and beans.

A Donlink delegation visited Mato Grosso on April 13 to tour production facilities and signed three memoranda of understanding with the state’s Economic Development Secretariat, the cereal association ACEMAT, and the bioenergy industry association BIOIND.

The agreement with BIOIND is particularly strategic, as it could help Donlink convince Chinese authorities to open the DDGS market.

“By working to open the DDG market, we’re strengthening the entire corn ethanol value chain. We’re showing investors that Mato Grosso has market potential and competitiveness and that DDGS can be an asset,” said BIOIND Executive Director Giuseppe Lobo.

Corn ethanol boom in Brazil

These efforts come as corn ethanol continues to gain ground in Brazil’s energy mix, driven largely by rising production capacity in the country’s Center-West — particularly in Mato Grosso and Goiás.

While sugarcane has traditionally been Brazil’s primary ethanol feedstock, new corn ethanol projects are springing up across the country. Industry leaders remain optimistic about strong supply and growing demand for both the fuel and its byproducts, especially DDGS. Improved logistics, including expanded railways and a dedicated ethanol pipeline, have played a key role in connecting the production chain to major consumer markets.

Corn ethanol production is also expanding into non-traditional regions, such as Rio Grande do Sul in the South and parts of the Northeast, where sugarcane ethanol has historically dominated. According to UNEM, Brazil produced 8.25 billion liters of corn ethanol in the 2024-25 season, with projections approaching 10 billion liters for 2025-26.

Platts, part of S&P Global Commodity Insights, assessed the CIF price of hydrous ethanol in Paulínia at Real 3,300/cu m on April 24, an increase of Real 10 from the previous session. This CIF price reflects out-of-state volumes delivered to Paulínia, a key hub in the Greater São Paulo area, by truck, pipeline, and rail, as well as inter-tank transfers. Ex-mill transactions are excluded to prevent distortion of the benchmark.

In the US, Platts assessed CIF New Orleans distillers dried grains with solubles barges for the April shipment at $206/st on April 24, while the Chicago DDGS market for trucks for the May delivery period was assessed at $164/st on April 24.

Tags: DDGS, China, corn, Brazil, ethanol