There are great challenges, as well as huge opportunities of China's corn product industry in 2011. Different corn products have different performance during the whole year, affected by the factors of high raw materials cost, domestic inflation, government's strict supervision or even restriction, as well as some booming downstream markets.
As the most important raw material of corn products, corn always attracts abundant attention. And corn price had run an uptrend in general from Jan. to Sept. 2011 majorly because of its insufficient supply. The average domestic market price of corn increased by 18.6% to USD363/t in Dec. 2011 compared with that in Jan. 2011, partly caused by which, corn products' average prices also rose by 8% during the same period.
Based on the sound economic environment and some promising market situations, a few corn products have enjoyed fast development in 2011, such as starch sugar, especially HFCS (high fructose corn syrup), some amino acids, like lysine. Take HFCS as an example, due to the insufficient supply of sucrose and its high price in 2011, HFCS' demand and price have enjoyed obvious increase, attracting lots of producers to enter into this industry or expand the production of HFCS, whose capacity all over the country reaches about 3 million t/a in 2011, up 38.9% over that in 2010.
However, some corn products have suffered bad market situation in 2011, like vitamin c (VC). Owing to VC's terrible oversupply, domestic and export prices of VC have maintained a low level in 2011, resulting in great loss of VC producers.
As for future development in 2012, policies, market and industry environment make 2012 a key year for corn product's development. With the expected growth of China's economy in 2012, domestic corn product industry will still boom, but production costs will remain a problem, whilst corn price will still run at a high level due to the tight relationship between corn's supply and demand, even though corn's output enjoyed a bumper harvest in 2011. Besides, governmental restrictions will be still the leading factor to affect the industry, while it's a great opportunity for large enterprises to develop further by merging small ones.
The detailed annual review of China’s corn product industry in 2011 is shared in CCM International’s December issue of Corn Products China News. If you need a more comprehensive understanding, please feel free to contact us.
Highlight News of Corn Products ChinaNews 1112:
-VC's demand structure should be changed in the future in view of its serious current oversupply situation.
-Corn products' import and export volumes increase by 66% and 17% respectively in Oct. 2011 compared with those in the previous month.
-Lysine price in China maintains a downtrend in Dec. 2011, and will keep that way in the short run as predicted.
-Domestic corn starch price in Dec. 2011 still maintains a downtrend due to oversupply.
-Development of fuel ethanol using grain as feedstock will be restricted in China by new policies published in Nov. 2011.
-2011 edition of the guide of key fields in high technology industry with priority to develop was forwarded by CBFIA on 19 Nov. 2011, involving some corn products.
-In late November, the Chinese government launches a new announcement to reduce the business income tax for small and micro enterprises in the next four years.
-Output of sucrose in 2011/2012 is expected to increase to 12 million tonnes in China, negatively affecting the starch sugar industry.
-Corn price in China begins to bottom out in Dec. 2011, majorly thanks to its demand increase.
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