Corn Products China News 1510 (12 issues per year)

Date: 2015-11

“On 14 Oct., 201 5, Jilin again increased the subsidy on corn deep-processing. CCM analyzes that this has little effect on inventory consumption but can increase enterprises’ enthusiasm for production. Meantime, subsidy offers corn deep-processing enterprises cost advantage.

Under huge inventory pressure of temporarily-stored corn, Chinese government is likely to rebuild corn ethanol project. This will do much to consume the mouldy corn and reduce the air pollution. However, the historically low crude oil price will be another problem.

Due to a large quantity of American DDGS coming into China’s market, it is rumored that the Chinese government perhaps will initiate an anti-dumping investigation on American DDGS. And based on the analysis of producers’ profits, the corn inventory and the policy trend, CCM believes that it is of high possibility for the MOC to carry out the investigation.

Since Aug. 201 5, China’s market price of MSG has fallen. But manufacturers’s gross profit has not been affected because the corn price drops even sharper. Meantime, high profit attracts more investors to the MSG industry, which compresses the market shares of traditional enterprises Fufeng Group and Meihua Bio.

Since Sept. 201 5, Global Bio-chem, Henan Lotus and Star Lake Bioscience have announced reorganization one after another, kicking off the reform of corn deep-processing enterprises. Meantime, due to the influence of temporary purchase and storage policy, declining demand and excess capacity, losses and slumps in performance have become a kind of normality for China’s corn deep-processing enterprises.

In Oct. 201 5, north corn, based on its sufficient supply, low price and excellent quality, is squeezing the market of northeast corn in China.

In Aug. 201 5, China’s import volume of sorghum slumped affected by the falling corn price and the stagnant downstream white spirit industry.

In Jan.-Aug. 201 5, China’s starch syrup reported a YoY rise in export volume, mainly attributed to the slumping domestic price.Meantime, HFCS accounts for a larger proportion in export gradually.

In the first eight months of 2015, China’s export price of xylitol reported large YoY drop, highlighting the export advantage and largely boosting the export volume.

Since Aug. 201 5, affected by dropping raw material price, China’s corn oil price fell again. In fact, the market price of corn oil continued falling in recent three years due to rapidly increasing capacity and dropping consumption volume. Meanwhile, with no significant improvement in end demand, the market price of corn oil is predicted to stay at low level in Q4 201 5.”

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