The demand for starch sugar from the domestic beverage industry is likely to expand in the next several months with the arrival of summer season. As a result, the demand for starch sugar in China may exceed its supply a bit in next several months, which can provide chances for the producers to raise the prices of their products.
In addition, the domestic price of corn starch, a raw material of starch sugar, may also show an uptrend at the same time. Owing to the increased demand for corn starch from the domestic starch sugar industry, corn starch producers in China can also increase the prices of their products. Meanwhile, the price of corn, a raw material of corn starch, has increased over the past two years. Although the domestic market price of corn decreased in recent months to a certain extent due to the oversupply as well as the incident of the H7N9 bird flu (H7N9) in 2013, it will still stay at a high level. For example, the average market price of corn in China was USD381/t in 2012, and it remained USD377/t in the first four months of 2013.
According to the official website of the State Administration of Grain of China, the deadline of China's temporary purchase and storage of corn for 2012 has been extended to May 31, 2013 from April 30, 2013, in order to protect the interests of corn growers. Corn farmers still have some corn for sale due to the weak market demand and the recent H7N9 bird flu. Some experts estimate that the prolongation of the national corn reserve could contribute to the possible stability in the domestic corn price to some extent in a short term.
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