Sweeteners China News 1603

Date: 2016-04

“On 2-16 March, 2016, the annual “Two Sessions” (NPC & CPPCC) was held successfully. Specifically, the supply-side structural reform was a hot topic. In Nov. 2015, President Xi Jinping raised to carry out this reform. From then on, measures such as de-capacity, de-stocking, de-leveraging and de-cost have played an important role in advancing the reform.

It is a very prominent problem that the supply and demand is imbalanced, in view of both agriculture and industry.


Take corn for example: its stock is now up to 250 million tonnes, which is more than enough for the demand in 2016 even if no corn is harvested this year. De-stocking is a focus in this industry. Many policies, such as the target sales of corn will be issued in succession. One to be highlighted is that in autumn, China will cancel the purchase for temporary storage policy in Heilongjiang, Jilin and Liaoning provinces and Inner Mongolia Autonomous Region, and instead will issue the planting subsidy policy, which is expected to be indexed to target price mechanism. Accordingly, this is aimed at optimising the planting structure and then reducing the stock.

All this will be favourable for the extremely high price of corn in China to return to normal. For Chinese corn sweetener enterprises, it will help reduce the production cost and increase the profit.


HIS, for example: the continuous capacity expansion makes the supply and demand imbalanced. Enterprises, with an intention to promote sales, launch a price war inevitably. This, however, only leads to anti-dumping investigations made by foreign countries: at the end of Feb., the EU preliminarily decided to levy anti-dumping duties on Chinese aspartame exporters.

Also involved in such typical overcapacity, China’s functional sugar industry is facing deficient market recognition also. This has now resulted in the slow market expansion and the dull sales. It is expected that the government could issue policies to forward its development, and that enterprises can make greater efforts to expand the application by enlarging publicity and expanding sales channels.”

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