April 2, 2008

  

China's corn processing sector not to divert corn from food and feed use

 

 

China's corn starch industry can sustain its production pace without cutting down on corn intended for food and feed consumption, an official from the China Starch Industry Association (CSIA) said Monday.

 

Under the CSIA's proposal, China's starch production will reach 18.5 million tonnes per year by 2010 with an annual growth rate of 10.8 percent. Of this, corn starch will account for 92 percent, at 17.02 million tonnes, Zhao Jixiang, a senior consultant with the CSIA, said. 

 

This scale of development will not affect feed corn consumption, Jixiang pointed during the 3rd Shanghai International Starch & Starch Derivatives Exhibition.

 

China is expected to face a tight balance between corn supply and demand from 2008 to 2010 period.

 

However, domestic corn production is seen to satisfy domestic corn demand.

 

The National Development and Reform Commission and CSIA projected that China's corn production will reach between 150 million and 160 million tonnes in 2010, while total corn consumption will be around 162.33 million tonnes.

 

Analysts said that corn stockpiles left over from previous years could be used to fill any supply shortfall.

 

Zhao pointed that the country's corn processing industry has developed rapidly since 2000 but the industry lacked a rational plan during the first five years of development.

 

This time, the government has implemented control measures for the industry, Zhao said. He added that if industrial corn consumption is capped at below 26 percent of total corn consumption, corn processing will not endanger grain supply safety.

 

In order to adjust the industry's structure, the government will have to eliminate 42 small-scale starch enterprises with annual production capacities below 30,000 tonnes over the 2005 to 2010 period.

 

Southern China's corn market has been weak for the last fortnight due to the slow recovery of the livestock industry, according to Jilin Province Grain Administration.

 

During the same period, corn processors in northeastern China raised corn purchase prices slightly, but turnover volume dropped.

 

The weak corn market is expected to continue due to the lagging recovery of the livestock and poultry industry in central and northern China.

 

Corn purchase prices in production areas increased by RMB 20 (US$2.85) per tonne last week, amid continued purchasing by state grain authorities.

 

By March 20, grain enterprises, including state-owned enterprises and private enterprises, purchased 41.18 million tonnes of fresh corn in 10 provinces. Of this, 44 percent, or 18.12 million tonnes, was purchased by state-owned enterprises.