Thursday, October 27, 2011

China’s Corn Deep-processing Industry Might be Further Restrained

CCM’s October issue of Corn Products China News has been published recently. The top story is that China's corn deep-processing industry may still be restrained by governmental policy in 2012.

According to Guidance about Promoting the Healthy Development of Corn Deep-processing Industry (the Guidance) published in 2007, the proportion of corn consumption in deep-processing industry among its total consumption shall be less than 26%. However, it is estimated that China’s corn consumption volume in deep-processing industry accounts for over 26% in 2011. Therefore, the government will continue to regulate and restrict the corn deep-processing industry in order to reduce the proportion in 2012.

On the other hand, China's corn is in slightly short supply now. Statistics shows that corn output in 2011 is estimated to reach 181.5 million tonnes, while its consumption volume will reach 181.3 million tonnes and the number will probably get higher in 2012. Since the country needs to replenish its national stock, the relationship between corn supply and its demand in China is predicted to be tight in 2012.

Moreover, if there is no significant increase of corn output in next five years, the corn supply in China can not meet the demand. But according to the 12th Five-Year Plan of the Development of National Farming, domestic supply of corn, wheat and rice should completely satisfy their demand at home by 2015. In order to achieve the goal, Chinese government should focus on how to increase corn supply and curb its demand. Unfortunately, deep-processing industry is always the first target to be restrained.

Based on the above reasons, it's believed that China’s corn deep-processing industry might be further restrained in 2012.

Headline news of Corn Product China News 1110:
-PLA’s import volume and export volume respectively increase by 43.2% and 8.4% during Jan. to Aug. 2011 over the corresponding period of 2010.
-HFCS witnesses a fast development in 2011, especially F55.
-Import volume of corn products in August 2011 witnesses an obvious increase, while the export volume suffers a slight decline.
-Domestic price of threonine has witnessed a downtrend since Aug. 2011, majorly due to its sluggish export demand.
-Domestic price of corn starch witnesses a downtrend in Oct. 2011, and the tendency may remain in the near future.
-Corn deep-processing industry in China may still be restrained in 2012.
-A new regulation on domestic VC industry may be published in 2011.
-The 12th Five-Year Plan of feed industry is published on 12 Oct. 2011, indicating a fast growth of the industry in the next five years.
-Star Lake Bioscience decides to improve lysine’s production technology in its wholly-owned subsidiary in Zhaodong City.
-Ministry of Commerce of China announced its final determination of the anti-subsidy duty on EU’s potato starch in Sept. 2011.
-Corn price in China witnesses a slight downtrend in Oct. 2011 due to the newly marketed corn in 2011.
-Large traders are becoming more and more important in domestic corn’s circulation, bringing positive effects on the corn industry.

All the above findings are from CCM’s Corn Product China News. If you are interested in this newsletter,  please feel free to contact us at
(Guangzhou China, October 24, 2011)

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