Corn Products China News 1509

Date: 2015-10

“The MOA will soon issue a new policy for the adjustment of the corn planting structure on over 1 /3 of corn planting area. The adjustment involves reducing the planting area for food crops and increasing the planting area for corn feed, and reducing the overall corn planting area.

On 1 8 Sept., 201 5, Chinese government issued the new policy on 201 5 temporary purchase and storage of corn, adjusting the price, time, quality standard and related units related to purchase and storage .
In Sept., new corn is gradually put onto the market. However, affected by the weakening downstream demand, new corn is difficult to sell, which further aggravates the inventory pressure.

On 25-28 Aug., 201 5, COFCO’s seven listing subsidiaries released their semi-annual financial report of 201 5. Of these, three engaging in grain & oil and grain deep-processing made a loss while two engaging in corn deep-processing performed bad, mainly affected by stagnant market of main product and the mounting total cost of sales.

On 30 Aug., 201 5, Global Bio-chem announced to introduce USD232.2 million (HKD1 .8 billion) for capital expansion. After that, it will gain large number of capital bail out the plight of capital. However, the company still faces challenges including overcapacity and good performance of competitors.

In H1 201 5, Fufeng Group recorded a sharp YoY growth in net profit, fuelled by newly increased income from selling a subsidiary. Meanwhile, its gross profit margin represented a slight YoY growth, which was driven by the outstanding performance of amino acid segment.

On 25 Sept., 201 5, Henan Lotus attempted to get out of trouble by reconstructing. However, due to divided opinions on development direction of shareholders, the restructuring scheme was pronounced a failure.

Affected by the price declines of competing products, together with the steady growth in importing cassava starch, the market space for potato starch is squeezed.

Affected by the environmental protection and rising gross profit of downstream products, the export volume of glutamic acid decreases annually. Meantime, Thailand has replaced Vietnam as the largest export destination of glutamic acid in China.

In Q3 201 5, China’s corn starch price continues falling affected by reductions in both raw material price and downstream demand. Meantime, the slumping raw material price also lowers the losses of manufacturers.”



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