Promising Future of High Fructose Corn Syrup

High Fructose Corn Syrup (HFCS) industry in China is enjoying sound development at present, which is estimated to have a promising future. According to CCM International's survey, the capacity of HFCS is expected to increase from about 1,200,000t/a in 2008 to 3,000,000t/a in 2011, with a compound annual growth rate (CAGR) of 35.72%. There are two reasons to drive the development of HFCS.

On one hand, demand of HFCS is increasing. HFCS is a perfect substitute for sucrose, because of HFCS' great taste and similar sweetness as sucrose. When price of sucrose goes up, HFCS becomes the first beneficiary. As the market price of sucrose is much higher than that of HFCS,  more and more downstream producers chose HFCS to replace sucrose, which boosts the increasing demand for HFCS. HFCS manufacturers begin to expand capacities of the product.

On the other hand, consumption increase also drives the development of HFCS. HFCS is mainly used in food, especially beverages and confectionery. In recent three years, Chinese beverage and confectionery industries have been growing rather fast, promoting the consumption of HFCS. According to statistics from National Bureau, the output of soft drinks reached about 66.9 million tonnes in the first seven months of 2011, up 23.36% over the same period last year. Besides, the output of confectionery rose to 1.07 million tonnes in the first seven months of 2011, up by 19.10% over the same period last year. Booming growth of the two industries greatly pushes forward the consumption of HFCS.

The promising future of HFCS attracts investment of five major producers, including Luzhou Bio-chem Technology Co., Ltd. (Luzhou Bio-chem), Shandong Xiangchi Group Co., Ltd., GBT-Cargill High Fructose (Shanghai) Co., Ltd., Wuhan COFCO Food Technology Co., Ltd. and Star Lake Bioscience Co., Ltd. (Star Lake Bioscience) All of them will be engaged in the production of F55, a major kind of HFCS.

The above is extracted from Sweeteners China News 1111. Please check below for more News:

-It is estimated that the rice starch sugar industry will develop better in the future, but its market share in the whole starch sugar industry may keep stable.

-Five High Fructose Corn Syrup (HFCS) projects will be launched soon, which may lead to the price decrease of HFCS in H2 2012. 

-So far, many domestic producers of sucralose improve their production technology actively, which may lead to competitiveness rise and price decrease.

-In recent three years, domestic alitame industry developed slowly due to small capacity and high price, and the situation is estimated to continue in the next several years.

-On 5 October, ACT announced its new partnership with Sinosweet, aiming to develop the UK and Irish markets of aspartame.

-In October 2011, Shengxiangyuan puts its stevia sweetener production line with a total capacity of about 750t/a into trial production in Qufu City, Shandong Province, suggesting its business expansion ambition thanks to the increasing demand from the downstream.

-According to Suzhou Economic and Technological Development Zone, Anhui VitaSweet launches an acesulfame-K project with capacity of 5,000t/a in October 2011.

-On 15 October 2011, Layn published a notice to revise its performance in the first three quarters of 2011, which explains that the the company's net profit gets worse than expected.

… …

(Guangzhou China,  November 15, 2011)

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Source: http://www.cnchemicals.com/PressRoom/PressRoomDetail_c_817.html

Five HFCS Projects to be Launched

Five High Fructose Corn Syrup (HFCS) projects will be launched in China in the next few months, which may lead to the price decrease of HFCS in H2 2012, according to CCM’s November issue of Sweeteners China News.

According to CCM International's survey, five domestic HFCS producers will launch their HFCS projects in the near future, including Luzhou Bio-chem Technology Co., Ltd. (Luzhou Bio-chem), Shandong Xiangchi Group Co., Ltd., GBT-Cargill High Fructose (Shanghai) Co., Ltd., Wuhan COFCO Food Technology Co., Ltd. and Star Lake Bioscience Co., Ltd. (Star Lake Bioscience). All of them will be engaged in the production of F55, one main kind of HFCS. Among the five companies, two will solely focus on F55 thanks to its profitable prospect in the near future. (Please refer to Sweeteners China News 1110, p2).

The HFCS industry in China is enjoying sound development at present. In accordance with CCM International's research, the capacity of HFCS is estimated to increase from about 1,200,000t/a in 2008 to 3,000,000t/a in 2011, with a compound annual growth rate (CAGR) of 35.72%.

It is the HFCS industry's promising future that attracts the five producers to join in the business. On one hand, due to HFCS' great taste and similar sweetness as sucrose, it is a perfect substitute for sucrose. Thus, when the price of sucrose goes up, HFCS becomes the first beneficiary. In terms of China Sugar Index, the market price of sucrose in China has been showing a rising trend since October 2008, which reached USD1,198/t in September 2011, increasing 32.38% over the same period last year. Meanwhile, the prices of F42 and F55, the two major kinds of HFCS, rose by 13.01% and 23.17% respectively over September 2010. As seen from the below data, the price growth rate of sucrose was much higher than that of HFCS. Thus, more and more downstream producers chose HFCS to replace sucrose, boosting the demand for HFCS. Hence, HFCS manufacturers begin to expand capacities of the product.

On the other hand, consumption increase also drives HFCS development. Actually, HFCS is mainly used in food, especially beverages and confectionery. In the recent three years, Chinese beverage and confectionery industries have been growing rather fast, promoting the consumption of HFCS. In light of the National Bureau of Statistics, the output of beverages has been growing considerably during the past. For example, the output of soft drinks reached about 66.9 million tonnes in the first seven months of 2011, up 23.36% over the same period last year. Besides, the output of confectionery rose to 1.07 million tonnes in the first seven months of 2011, growing by 19.10% over the same period last year. Booming growth of the two industries greatly pushes forward the consumption of HFCS.

Therefore, most HFCS producers believe in HFCS' huge development potential. Take Star Lake Bioscience as a good example, Ms. Sun, a representative of the company's bond department, explained that the increasing demand for HFCS attracted Star Lake Bioscience to construct a new HFCS project in early 2011.

Besides, some HFCS producers launch new projects in order to improve product structure. In view of Luzhou Bio-chem, the company only has HFCS production lines of F42. As F55 is used more and more widely, Luzhu Bio-chem decided to build HFCS F55 production lines.

Normally, the price of HFCS is affected by corn supply and its downstream demand. Domestic price of corn may stay relatively stable in the rest months this year thanks to the expected bumper corn harvest, indicating corn supply won't have notable effect on HFCS price in the near future. In accordance with a report published by China National Grain and Oils Information Center (CNGOIC) in Aug. 2011, China's corn output is estimated to increase by 2.96% to about 182.5 million tonnes this year over 2010, and the price of corn may stay comparatively steady, maintaining the cost of HFCS which is made from corn.

Under the above conditions, the rising new supply of HFCS may be the main reason for its prospective price decrease. When those five HFCS projects with total capacity of 0.55 million t/a get launched, the supply of HFCS is estimated to increase abundantly, and its growth rate may also exceed that of HFCS demand from downstream industries. Therefore, HFCS price may decrease to some extend in the near future.

However, though the launches of those five HFCS projects may affect the price jointly, the five producers will not start keen competitions against each other owing to their different targeted sales regions. Because of HFCS' three months of short shelf life and high freight fees, companies usually market their products locally or nearby. Since the five producers are located in various regions around China, their newly launched HFCS projects will hardly overlap in marketing areas, avoiding contests against each other.                                                                                                   

Source: Sweeteners China News 1111

http://www.cnchemicals.com/Newsletter/NewsletterDetail_190.html

Content of Sweeteners China News 1111:

Stevia may have bumper harvest in China in 2011

Guangxi Nanning Sugar may obtain good profit

Lanzhou Dafeng plans to build a science and technology zone of plants

New beet sugar marketed in Xinjiang

GLG's new beverages to be late

Wenshan Yingmao founded in Yunnan Province

Overview of rice starch sugar

Five HFCS projects to be launched

Sucralose producers improve production technology actively……

If you are interested in CCM’s October issue of Sweeteners China News, please do not hesitate to contact us by +86-20-37616606, or email us at econtact@cnchemicals.com.

(Guangzhou China, November 9, 2011)

Sweeteners China News is a monthly newsletter published by CCM International Limited. Based on China market, CCM offers timely update and close follow up of China’s various kind of sweeteners market dynamics, analyze the market data and trends, Major columns include market dynamic, company dynamic, raw material supply, price update, import & export analysis, Consumption Trend & Competitiveness.

About CCM

CCM is dedicated to market research in China, Asia-Pacific Rim and global market. With a staff of more than 150 dedicated highly-educated professionals. CCM offers Market Data, Analysis, Reports, Newsletters, Buyer-Trader Information, Import/Export Analysis all through its new proprietary product ValoTracer.

For more information, please visit http://www.cnchemicals.com.

CCM International Ltd.
Guangzhou CCM Information Science & Technology Co., Ltd.
17th Floor, Huihua Commercial & Trade Mansion, No.80 Xianlie Zhong Road, Guangzhou 510070, China

Tel: 86-20-37616606

Email: econtact@cnchemicals.com