After two-year rises, import volumes of
sorghum, barley and other substitutes for corn all reduced in Feb. 2016
affected by the Spring Festival and the dropping corn price. CCM predicts that figures
would continue declining due to the decreasing corn price.
![](http://www.cnchemicals.com/Webdata/WebResources/image/20160513/20160513092126_3372.jpg)
Source: Bing
In Feb. 2016, some substitutes for corn
recorded MoM declines in import volumes, according to China Customs:
Sorghum: 566,866 tonnes, down by 38.64%
Barley: 261,766 tonnes, down by 27.76%
Besides, some downstream products of corn
also recorded MoM falls in import volumes in Feb.:
DDGS: 290,653 tonnes, down by 37.78%
Corn starch: 130 tonnes, down by 25.91%
Notably, the import volume of cassava
starch (substitute for corn starch) also reduced by 28.14% to 123,384 tonnes in
Feb.
Import volumes of substitutes for corn, corn
starch and downstream products of corn, Feb. 2016
Product
|
Feb. 2016 (tonne)
|
MoM change (%)
|
Cassava starch
|
123,384
|
-28.14
|
Sorghum
|
566,866
|
-38.65
|
Barley
|
261,766
|
-27.76
|
Corn starch
|
130
|
-25.91
|
DDGS
|
261,637
|
-9.98
|
Source: China Customs
In fact, in recent years, import volumes of
some corn substitutes rose rapidly. According to China Customs, in 2015, import
volumes were:
Sorghum: 10,700,297 tonnes, up by 85.27%
YoY
Barley: 10,732,338 tonnes, up by 98.25% YoY
It is the continuously rising domestic corn
price that pushed up the import volumes of substitutes. Enterprises hoped to relieve
pressure on cost by importing substitutes for corn. Meanwhile, the widened
price gap between domestic and imported corn increased the price difference of
downstream products, stimulating the imports. Data from China Customs show that
China imported 6,820,891 tonnes of DDGS in 2015, up by 26% YoY.
Import volumes of cassava starch, sorghum
and barley in China, Jan. 2013-Feb. 2016, tonne
Source: China Customs
There are following factors reducing import
volumes of corn substitutes in Feb. 2016:
![](http://www.cnchemicals.com/Webdata/WebResources/image/20160513/20160513093423_3590.jpg)
Firstly, China's enterprises usually
suspend production during the Spring Festival holiday for nearly half a month in
Feb. Therefore, some importers will reduce/ suspend the import volumes of some
agricultural products.
Secondly, substitutes lose their price
advantages due to the falling corn price. According to CCM's research, since H2
2015, the market price of corn has slumped in spite of a slight rebound in Nov.
2015. In 2016, the situation is even worse - the price dropped to USD287.53/t
(RMB1,880/t) in March, the lowest since Jan. 2014. Corn won back market shares
by its low price, which weakened the demand for its substitutes.
Market price of corn in China, Jan.
2014-March 2016
Source: CCM
The purchase policy of corn for temporary
storage has been changed to "marketized purchase + subsidy" in
Northeast China. Although the specific subsidy measures have not been disclosed
yet, 250 million tonnes of corn of the state is waiting for sale. Because of
the high inventory and the changing policy, corn price will drop further, which
will affect the demand for substitutes. Importers will be cautious for
purchasing.
In addition, the General Administration of
Quality Supervision, Inspection and Quarantine issued the Management Method of
the Inspection and Quarantine on Imported and Exported Grains on 20 Jan., 2016
and will implement it on 1 July. At that time, unqualified imported corn,
sorghum, barley and DDGS will be returned under stricter inspection. So, CCM
predicts that import volumes of sorghum, barley and other corn substitutes will
decline further in later period.
This article comes from Corn Product China News 1604, CCM
About CCM:
CCM is the leading market intelligence provider for China's
agriculture, chemicals, food & ingredients and life science markets.
Founded in 2001, CCM offers a range of data and content solutions, from price
and trade data to industry newsletters and customized market research reports.
Our clients include Monsanto, DuPont, Shell, Bayer, and Syngenta. CCM is a
brand of Kcomber Inc.
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Tag: corn substitutes