Corn Products China News
Corn Products
                                                      Vol.2 Issue 10, 2009




    ...
Corn Products China News
       Supply and Demand ................................................................... 1
  ...
Corn Products China News

                                                                            Welcome to the Septe...
Corn Products China News

                                              Overview of cornstarch industry in 2008

         ...
Corn Products China News
                    100,000t/a (TABLE 1).                               announced to raise cornst...
Corn Products China News
                    and US are the leading export destinations       FIGURE 5: Major export desti...
Corn Products China News

                                                              PLA export plunges in 2009

      ...
Corn Products China News
                    PLA demand since early 2009. PLA                                     FIGURE 9...
Corn Products China News
                                        Ex-factory prices of corn products in Oct. 2009
         ...
Corn Products China News
                                                    Vitamin C price sees slight rise in October
 ...
Corn Products China News
                                                     Furfural export price soars
                ...
Corn Products China News
                                                           Maltitol price glissades in October
  ...
Corn Products China News

                                    COFCO expects to participate in national corn storage plan

...
Corn Products China News
                                                         Global Sweeteners: net profit down 97%
 ...
Corn Products China News
                            of 40,000t/a and Global Sweeteners        Global Sweeteners. The acti...
Corn Products China News 1001(Sample Issue) - Published by CCM International Ltd
Corn Products China News 1001(Sample Issue) - Published by CCM International Ltd
Corn Products China News 1001(Sample Issue) - Published by CCM International Ltd
Corn Products China News 1001(Sample Issue) - Published by CCM International Ltd
Corn Products China News 1001(Sample Issue) - Published by CCM International Ltd
Corn Products China News 1001(Sample Issue) - Published by CCM International Ltd
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Corn Products China News 1001(Sample Issue) - Published by CCM International Ltd

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Corn Products China News is a monthly report with 12 issues per annum published by CCM International Limited. It looks into the whole corn processing industry covering corn, corn starch, starch sugar, sugar alcohol, orgainic acid, amino acid etc. Key columns include supply & demand, price update, market & company dynamic, competitiveness, corn supply, corn products use monitoring,etc. If you are interested in this newsletter or ask for the latest sample, please contact Joy at emarket2@cnchemicals.com or 86-20-37616606.

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Corn Products China News 1001(Sample Issue) - Published by CCM International Ltd

  1. 1. Corn Products China News Corn Products Vol.2 Issue 10, 2009 Copyright © CCM International Limited
  2. 2. Corn Products China News Supply and Demand ................................................................... 1 Overview of cornstarch industry in 2008 ...............................................................................1 Monosodium glutamate export volume soaring................................................................... 2 PLA export plunges in 2009............................................................................................... 4 Price Update ..............................................................................6 Ex-factory prices of corn products in Oct. 2009 ................................................................... 6 FOB corn price change in Dalian Port from Oct. 2008 to Oct. 2009 ................................... 6 Vitamin C price sees slight rise in October ............................................................................ 7 Furfural export price soars ....................................................................................................8 Maltitol price glissades in October ........................................................................................ 9 Market & Company Dynamics .................................................. 10 COFCO expects to participate in national corn storage plan .............................................. 10 Global Sweeteners: net profit down 97% .............................................................................. 11 Jinan Healtang expanding L-arabinose market ...................................................................12 Domestic biobutanol stagnating ...........................................................................................13 Hebei Derui building 40,000t/a edible corn oil plant .........................................................14 Bailong Chuanyuan enhances FOS capacity to 16,000t/a ...................................................15 Competitiveness ...................................................................... 16 Starch sugar price declines in mid October ..........................................................................16 Corn Supply ............................................................................. 17 Trading volume of corn auctions reaches 12 million tonnes................................................17 Corn price down in mid October ......................................................................................... 18 Corn Products Use Monitoring ................................................ 19 Angel Yeast develops high end yeast extract ........................................................................19 News in Brief .......................................................................... 20 Novozymes (China) launches pilot plant .............................................................................20 BBCA’s profit increases by 80%-110% ................................................................................20 Jiangsu Gadot runs 60,000t/a citric acid ...........................................................................20 India faces serious shortage of vitamin C ............................................................................20 Star Lake sees good performance ........................................................................................20 Major related ready reports from Coming related reports from CCM: Export analysis of related products CCM: - Production & Market of Lactic Acid from CCM: - Future of White Biotechnology in in China – Edition (2) (in the mid of - Aspartame; China - Edition (2) November) - Sucralose; - Production and Market of Sucralose - Future of Starch in China (in the end Trade report of related products from in China of November) CCM: - The Survey of Sorbitol in Asia Pacific - Production, Market and -Sucralose Export in China 2007- - Edition (1) Benchmarking of Xanthan Gum in Apr.2009 - Production and Market of China CCM Related Newsletter: Monosodium Glutamate (MSG) in - Production and Market of Xylitol in - Industrial Biotechnologies China China - Edition (1) China News - The Future of High Intensity - Survey of Maltitol in Asia Pacific - Dairy Products China News Sweeteners in China; - Future of Polyols in Asia Pacific Rim - The Survey of Saccharin in China; - Survey of I+G Markets in China Contact us for details of CCM. - Glucose Production & Market in - Future of Enzyme in China China. CCM International Co., Ltd.
  3. 3. Corn Products China News Welcome to the September issue of Corn Headlines Products China News, specially published by CCM International. ■ Chinese cornstarch still sees capacity expansion but stable ■ Domestic biobutanol producers China’s economy saw rapid development output in 2009. still have no plan to resume in the last few months. National Bureau biobutanol production at present. of Statistics of China reveals that national ■ Homemade PLA saw 94% financial revenue in September increased decrease in export volume year on ■ Hebei Derui is building by 33% year on year, and export volume of year. 40,000t/a edible corn oil plant in industrial products has maintained uptrend. early September. ■ Chinese MSG witnessed 60% With the leave of Chinese traditional holidays increase in export volume in the ■ Bailong Chuanyuan will launch like Mid-Autumn Festival and the National first eight months of 2009. its second FOS phase project in Day, national demand for food and its related early Nov. 2009. additives stopped the sharp uptrend and ■ Vitamin C price sees slight rise maintains stable in October. in October. ■ Domestic starch sugar price slips according to decreasing But from a whole perspective, demand for ■ Furfural export price has been sucrose price in mid October. corn products has been increasing. Most increasing constantly since August. of the corn processors have continued to ■ Trading volume of Chinese raise operation rate thanks to the recovering ■ Domestic maltitol price drops reserved corn auctions has reached economy and current sufficient corn supply. to USD733/t in October. totally 12 million tonnes. New corn has been on the market since early October. Coupled with the depressed ■ COFCO has been preparing ■ Corn price has slipped since demand for corn in last two months, the to apply to participate in China’s mid October. government’s last few corn auctions have corn storage plan of 2009 since late seen poor performance. September. ■ Angel Yeast has successfully developed high IMP+GMP yeast With corn price decline, most domestic ■ Global Sweeteners saw 97% extract and culture medium enterprises cut down price of products like decrease in net profit in H1 2009. yeast extract which can reach the starch sugar and sugar alcohols in October, international high level. etc. Besides impacts from corn price, starch ■ Jinan Healtang is endeavoring sugar price is also hit by declining sucrose to expand domestic L-arabinose price. However, increasing demand has market in China currently. pushed up furfural price. Main companies mentioned in this issue CCM International Co., Ltd.
  4. 4. Corn Products China News Overview of cornstarch industry in 2008 A s global second largest corn deep- FIGURE 1: Cornstarch capacity and output changes in China, 2003 ~ 2009 processing country following 30.00 U.S., China still sees cornstarch capacity 26.00 expansion in 2009 despite the gloomy 23.00 24.00 25.00 economy (FIGURE 1 ). However, cornstarch 20.00 18.00 (Unit: million tonnes) 20.00 output is estimated to keep stable in 2009 16.00 due to gloomy downstream market in H1 14.50 15.00 14.00 13.50 15.00 12.00 2009. 10.50 8.35 9.00 10.00 In 2009, cornstarch capacity in China may 5.00 be enlarged to 26 million t/a. Although financial crisis has made some producers 0.00 stop expansion projects or slow down 2003 2004 2005 2006 2007 2008 2009 est. expansion, some large-scale cornstarch Capacity Output producers like China Sun Bio-chem Technology Group Co., Ltd. and Luzhou Source: CCM International Supply and Demand Food Group Co., Ltd. etc. launched their FIGURE 2: Regional distribution of cornstarch capacity, 2009 plants as scheduled in 2009, eyeing increasing demand for cornstarch when economy recovers. 23.96% 37.59% Cornstarch output had decreased in H1 compared to last year. Cornstarch industry saw a big deficit in H1 2009 and many 15.90% producers lowered their operation rate, mainly resulting from increased corn 7.67% 4.91% price and low cornstarch price. Insiders 1.20% 4.31% disclosed that cornstarch price has been 2.99% 2.82% only USD14/t higher over corn price in Shandong Jilin Hebei Henan Liaoning early 2009. Moreover, many corn deep- Heilongjiang Inner Mongolia Ningxia Others processing products like starch sugar, Source: CCM International ethanol and citric acid saw decrease in demand and price in H1 2009, which PICTURE 1 : Capacity distribution of corn starch in China, 2009 shrank demand for cornstarch as well. Therefore, many cornstarch producers had to decrease operation rate to minimize the Heilongjiang loss. Jilin In H2 2009, operation rate of domestic Xinjiang Liaoning cornstarch producers may still keep Gansu Inner Mongolia Beijing Hebei low level. Despite the gradual economy Ningxia Shanxi Shandong recovery, cornstarch has only risen slightly Qinghai Henan Jiangsu Shaanxi since this July. Coupled with the relatively Anhui Shanghai Tibet Hubei high corn price, many domestic cornstarch Sichuan Chongqing Zhejiang Jiangxi producers still have no plans to raise Hunan Fujian Guizhou operation rate. an iw Yunnan Guangdong Ta Guangxi ≥7 million tonnes ≥6 million tonnes In China, there are thousands of cornstarch ≥5 million tonnes Hainan producers with total capacity of 24 million ≥1 million tonnes t/a in 2008, but only around thirty Source: CCM International cornstarch producers have capacity of over 1 CCM International Co., Ltd.
  5. 5. Corn Products China News 100,000t/a (TABLE 1). announced to raise cornstarch export tax rebate to 5% from 0% since this June, it didn’t boost the export a lot. Over 80% of overall cornstarch output is FIGURE 3: Homemade cornstarch export volume changes, 2003 ~ 2008__ used in corn deep-processing industry. North China is the key cornstarch production region (PICTURE 1) with 0.50 0.45 abundant raw material. Shandong is the largest cornstarch production province 0.40 (Unit: million tonnes) 0.34 (FIGURE 2). 0.30 Most of homemade cornstarch is consumed 0.20 0.18 in China, and only a small quantity is 0.14 exported (FIGURE 3). In recent years, 0.11 0.11 homemade cornstarch has witnessed a big 0.10 increase in export volume. But cornstarch export volume in the first eight months of 0.00 2003 2004 2005 2006 2007 2008 2009 saw 42% decrease to 21,382 tonnes year on year. Though the government has Source: China Customs Supply and Demand TABLE 1: Domestic key cornstarch producers, 2009 Producers Capacity ,09, '000 t Output '08, '000 t Zhucheng Xingmao Corn Developing Co., Ltd. 2,550 1,680 Global Bio-chem Technology Group Co., Ltd. 2,400 1,510 Shandong Xiwang Group Co., Ltd. 1,000 900 Shandong Runsheng Group Company 1,000 850 China Agri-Industries Holdings Limited 1,600 900 Shandong Juneng Electric Power Group Golden Corn Co., Ltd. 850 650 Source: CCM International Monosodium glutamate export volume soaring T otal export volume of monosodium glutamate (MSG) in China had reached 25,610 tonnes in the first eight FIGURE 4: MSG export volume and price in China, Jan. ~ Aug. 2009 6,000 1,300 months of 2009, up approximately 63% 5,262 year on year. Owing to the improved MSG 5,000 1,250 4,327 quality and brand awareness, MSG export 3,860 volume has increased largely since Apr. 4,000 3,635 1,200 (Unit: USD/t) (Unit: tonne) 2009 and the price has maintained high 2,791 level regardless of economic crisis (FIGURE 3,000 1,150 2,296 4). 2,000 1,637 1,803 1,100 Growing overseas market has pushed up MSG export volume. Since outbreak of 1,000 1,050 economic crisis in Oct. 2008, MSG export 0 1,000 had been hampered in early 2009. However, Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09 Jul-09 Aug-09 MSG exporters have been endeavoring to develop new market in Southeast Asia, Volume price South America, Africa and Middle East, etc. Before that, main market was focused Source: China Customs on E.U. and US. At present, Southeast Asia 2 CCM International Co., Ltd.
  6. 6. Corn Products China News and US are the leading export destinations FIGURE 5: Major export destinations of Chinese MSG, Jan. ~ Aug. 2009 of Chinese MSG (FIGURE 5). Mainly two factors have contributed to the 5,000 4,347 booming export. 4,000 Firstly, improved MSG quality and 3,190 more varieties of MSG developed have (Unit: USD/t) 3,000 strengthened MSG competitiveness in overseas market. 2,000 1,576 1,557 1,506 Domestic production technology of MSG has been improved a lot in recent years, 1,000 thus improving its quality. More and more MSG producers have widely adopted continuous production process such as 0 continuous neutralization and continuous U.S. Burma Ghana Hong Kong Singapore crystallization to improve product quality. Source: China Customs Supply and Demand As the life quality has been improved, FIGURE 6: Chinese sodium glutamate export volume and price changes, consumers have higher requirements for Jan. ~ Aug. 2009 MSG, the common flavor agent. Therefore, domestic many key MSG producers, such as 25,000 1,275 Jianyang Wuyi Gourmet Powder Co., Ltd. and Henan Lianhua Gourmet Powder Co., 1,270 20,000 Ltd. (Henan Lianhua), have developed MSG with different tastes according to people’s 1,265 (Unit: USD/t) (Unit: tonne) diet habits. This has helped to enlarge 15,000 overseas market shares. 1,260 10,000 Secondly, brand awareness is deepened. 1,255 Domestic MSG producers always pay more attention to brand promotion in overseas 5,000 1,250 market. Brand is one of the most important intangible assets to MSG producers. 0 1,245 Currently, well-known brands include Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09 Jul-09 Aug-09 Meihua, Lotus, Courser, Chunrui, 999 and so on. Volume price Actually, as key upstream product of MSG, Source: China Customs sodium glutamate also witnessed 14% small-scale MSG manufacturers with capacity less than 30,000 t/a have increase in export volume which reached been washed out of market last 3 years. 146,246 tonnes in the first eight months of 2009 (FIGURE 6). After many small-scale MSG producers withdrawing from the market, over 70% of current total MSG capacity is concentrated in domestic In China, MSG industry is always restricted several key MSG producers such as Henan Lianhua, Meihua Hebei by the government due to its high pollution Meihua Monosodium Glutamate Group Co., Ltd. etc. and high energy consumption. In order to reduce environmental pollution and Actually, MSG is mainly sold in domestic market, with a small volume accelerate industry integration, Chinese exported. Over 87.93 % of the total output is consumed in domestic government has issued many policies on market. China has a long history of adding MSG into food and there is MSG industry since 2007. With the stricter large demand for MSG in China. environmental policies on MSG industry, 3 CCM International Co., Ltd.
  7. 7. Corn Products China News PLA export plunges in 2009 H omemade polylactic acid (PLA) export volume was just 158 tonnes in the first eight months of 2009, down FIGURE 7: Homemade PLA export volume changes, 2007~2009 5,000 94% year on year. Actually, homemade PLA 4,478 has seen continuous downtrend in recent 4,000 years (FIGURE 7) due to its inferior quality compared with overseas PLA. 2,879 (Unit: tonne) 3,000 Following factors have resulted in the sharp decline in PLA export volume in 2009. 2,000 On one hand, domestic largest PLA exporter 1,000 stopped production due to its poor product quality in late 2008. As domestic largest 158 lactic acid producer with overall capacity 0 of 100,000t/a, Henan Jindan Lactic Acid 2007 2008 2009(Jan.~Aug.) Supply and Demand Co., Ltd.(Henan Jindan) also began PLA production in 2007 and became the largest PLA Source: China Customs exporter since then. According to statistics from FIGURE 8: Import volume changes of PLA in China, 2007~2009 China Customs, in 2008, Henan Jindan totally exported PLA of 2,092 tonnes which accounted 2,500 for 73% of the national total export volume. 2,261 However, Henan Jindan had to stop PLA 2,000 1,813 production in late 2008 and has canceled its PLA export business at the beginning of 2009, (Unit: tonne) 1,500 mainly due to its immature PLA production 1,145 technology. According to Mr. Cui, sale manager 1,000 in Henan Jindan, Henan Jindan was unable to produce qualified PLA to meet the demand of its customers with current production technology. 500 Although export volume in 2008 was large, 0 Henan Jindan had not made great profit owing 2007 2008 2009(Jan.~Aug.) to its lower export price than that of other Source: China Customs domestic PLA producers such as Zhejiang based plastics though its development in China is still restricted Hisun Group Co., Ltd.(Zhejiang Hisun), by high production cost, overall poor quality and low awareness of Nantong Jiuding Biological Engineering environmental protection currently. Co., Ltd.(Nantong Jiuding) and Shanghai Tong-jie-liang Biomaterials CO., Ltd. On another hand, more and more PLA producers consumes PLA by (Shanghai Tong-jie-liang) etc. themselves to produce PLA-based end products of much higher added value rather than export PLA to overseas market since 2008. Zhejiang But PLA’s promising prospect lures Henan Hisun, domestic largest PLA producer with total capacity of 5,000t/a, Jindan researching PLA production has always focused on PLA-based end products such as PLA-based resin technology constantly. By cooperating with products, PLA-based blow moulding products and PLA-based nonwoven domestic famous science and research products etc. So do the other domestic leading PLA producers like institutions, Henan Jindan is endeavored Shanghai Tong-jie-liang and Nantong Jiuding. to update PLA production technology and expect to resume production in the middle Besides, decreasing price of petroleum-based plastics, caused by large of 2010. Actually, PLA is always a popular slump in international oil price since Oct. 2008, has shrunk global alternative to traditional petroleum- 4 CCM International Co., Ltd.
  8. 8. Corn Products China News PLA demand since early 2009. PLA FIGURE 9: Different import origins of PLA, Jan. ~Jul., 2009 production cost can only be lower than that of petroleum-based plastics when 1,800 6,000 international oil price is above 100/barrel. 5,245 1,600 1,532 The relatively high production cost has 5,000 restricted PLA application. 1,400 1,200 4,074 4,000 (Unit: USD/t) (Unit: tonne) In the following months of 2009, 1,000 homemade PLA export volume may 3,000 800 2,616 still keep low due to continuously low 2,421 international oil price. Though there 600 2,000 are many potential PLA producers who 400 1,000 target PLA’s good future prospect, these 200 112 76 48 enterprises are difficult to launch PLA 0 0 production in the short run.  Germany  U.S. Japan South Korea In China, there are about five PLA Import volume Import price producers with total capacity of Source: China Customs approximately 10,000t/a. To pursue Supply and Demand further development, domestic PLA As a biodegradable plastic, PLA will see promising market in the future, producers have to resolve bottlenecks like especially in countries like China, South Africa, Uganda and Ireland that high production cost and poor product have banned plastic grocery bags responsible for the world wide serious quality. “white pollution”. It is estimated that market value of PLA industry in China will reach USD295 million in 2014, with CAGR of 53.16% in 2009- In recent years, PLA import volume has 2014. risen year by year in China (FIGURE 8). And Germany has become the largest PLA PLA is widely applied in many downstream industries, such as packaging, exporter to China (FIGURE 9) with high textile, biomedical and agriculture in China. price depending on its best quality. 5 CCM International Co., Ltd.
  9. 9. Corn Products China News Ex-factory prices of corn products in Oct. 2009 Price in October 2009 Price in September 2009 Products (USD/t) (RMB/t) (USD/t) (RMB/t) Corn starch (North China) 359 2,450 337 2,300 Corn starch (South China) 394 2,690 385 2,630 Ethanol (Industrial grade) 586 4,000 659 4,500 Ethanol (Food grade) 747 5,100 747 5,100 80% Maltose syrup 322 2,200 425 2,900 70% Sorbitol 522 3,560 469 3,200 Monohydrate citric acid 777 5,300 798 5,450 Oxidized starch 879 6,000 630 4,300 68% Xylitol (Liquid) 747 5,100 805 5,500 HFCS (Fructose: 42%) 344 2,350 395 2,700 HFCS (Fructose: 55%) 447 3,050 454 3,100 Crystal Isomaltitol 3,224 22,000 3,807 26,000 Malt dextrin 454 3,100 483 3,300 75% Maltitol (Liquid ) 733 5,000 761 5,200 Price Update Anhydrous glucose (Food grade) 608 4,150 718 4,900 Glucose Monohydrate 462 3,150 513 3,500 Itaconic acid 1,788 12,200 1,757 12,000 98.5% lysine 1,575 10,750 1,538 10,500 Source: CCM International FOB corn price change in Dalian Port from Oct. 2008 to Oct. 2009 270 260 250 (Unit: USD/t) 240 230 220 210 26-Nov 26-Dec 20-Jan 19-Feb 18-Mar 13-Apr 14-May 11-Jun 20-Jul 20-Aug 20-Sep 20-Oct Corn price 230 215 216 222 240 239 238 242 250 253 259 253 Source: CCM International 6 CCM International Co., Ltd.
  10. 10. Corn Products China News Vitamin C price sees slight rise in October I n early October, both domestic and export price of vitamin C has seen resulting from suspended production of two leading vitamin further. Gloomy demand for vitamin C Vitamin C price may slip may continue due to the slight rise compared to C producers, namely slightly in November. coming of cold weather, late September (FIGURE Northeast Pharmaceutical as demand from beverage 10), driven by current Group Co., Ltd. (Northeast Vitamin C supply will that contains vitamin C insufficient supply of Pharmaceutical) increase because two will slump. vitamin C. With production and Shijiazhuang leading producers will resumption of leading Pharmaceutical Group soon resume production. However, vitamin C price vitamin C producers in Co., Ltd.(Shijiazhuang According to Mr. Ma, won’t decline largely in November and current Pharmaceutical) in current sales manager from November, especially the price downtrend of two or three months. Northeast Pharmaceutical, export price. Vitamin C corn, vitamin C price is In September, both the company may export price is always estimated to slip slightly in Northeast Pharmaceutical resume vitamin C under supervision of the November. and Shijiazhuang production in early government, who wants to Pharmaceutical, whose November. Shijiazhuang avoid malignant price war In mid October, North total capacity takes up Pharmaceutical also among domestic vitamin C China Pharmaceutical Co., around 50% of the national discloses to resume producers. Ltd. (NCPC), domestic key total, have suspended production in Oct. ~ Nov. Price Update vitamin C producer with vitamin C production for China is the largest capacity of 25,000t/a, equipment maintenance. Corn price decrease may vitamin C producer in quoted its vitamin C export also pull down vitamin C the world, capturing price as 11,500USD/t, up Though demand for price to some extent. With around 80% of global approximately 3% over vitamin C still maintains sufficient supply of corn vitamin C output. That has half month ago. stable at low level in after new corn is marketed equipped Chinese vitamin October, decreased supply since October, corn price C producers with strong Domestic vitamin C of vitamin C fails to meet will witness downtrend in pricing power. supply has decreased a the demand since vitamin the future months. lot in recent two months, c storage has declined FIGURE 10: Changes of domestic and export VC price, Aug. ~ Oct. 2009 13,500 13,000 12,500 (Unit: USD/t) 12,000 11,500 11,000 10,500 10,000 5-Aug 15-Aug 25-Aug 4-Sep 14-Sep 24-Sep 4-Oct 14-Oct Domestic price Export price Source: CCM International 7 CCM International Co., Ltd.
  11. 11. Corn Products China News Furfural export price soars F urfural export price has been continuously increasing since August (FIGURE 11), FIGURE 11: Average furfural export price changes, Aug. ~ Oct. 2009 mainly thanks to the global economic recovery. 1,220 If foundry industry, main consumption filed of 1,180 furfural, continues rebound in future months, furfural export price may further increase. 1,140 (Unit: USD/t) In October, average export price of furfural 1,100 continues uptrend though there is disparity in 1,060 furfural quotations from different producers in China. For instance, on Oct. 16th, 2009, price 953 960 980 of furfural with 98.5% purity is FOB USD1,310/ 1,000 924 t quoted by Shijiazhuang Worldwide Furfural & Furfuryl Alcohol Funan Resin Co., Ltd., a leading 900 furfural producer in China. Meanwhile, quoted 7-Aug. 20-Aug. 21-Sep. 23-Sep. 3-Oct. 16-Oct. by Hebei Furan International Co., Ltd., price of furfural with 98.5% purity is FOB USD1,176/t. Source: CCM International FIGURE 12: Export situation of furfuralcohol and tetrahydrofurfuryl alcohol Over 50% furfural output is used to produce Price Update in China, Jan. ~ Aug. 2009 furfuralcohol, the key raw material of furan resin (an important chemical raw material of 6,000 1,140 foundry industry). As the building industry has 4,723 4,714 1,120 been recovering, demand for furfuralcohol and 5,000 4,279 4,275 3,788 4,099 furfural has been rising accordingly, thus pushing 4,061 1,100 3,887 up their prices. Since early August, furfuralcohol 4,000 (Unit: USD/t) 1,080 (Unit: tonne) export price has seen increase (FIGURE 12). 3,000 1,060 Tight furfural supply also results in price rise. Despite furfural demand beginning rising in 1,040 2,000 end July, domestic furfural producers have 1,020 still maintained low operating rate in past 1,000 1,000 three months. General speaking, most furfural producers would store large quantity of corncob, 0 980 raw material of furfural, in first half year when Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09 Jul-09 Aug-09 corncob price was relatively low. However, Export volume Export price depressed demand for furfural since outbreak of global financial crisis had made producers reduce Source: China Customs corncob stock volume in H1 2009. Shortage of FIGURE 13: Changes of homemade furfural export volume and price, corncob has led to low operating rate of furfural Jan. ~ Aug. 2009 producers. Moreover, corncob price has risen 3,500 1,050 due to soaring corn price in recent months. 3,000 2,862 1,000 In following months, price trend of furfural will 2,500 2,242 2,023 950 (Unit: USD/t) (Unit: tonne) depend on the recovery situation of foundry 2,000 1,586 900 industry. If demand from foundry industry 1,445 1,500 1,206 1,375 continues to increase in following months, 1,113 850 1,000 furfural price will rise too. 500 800 Actually, furfural export volume rose to 2,242 0 750 tonnes in July, showing overseas demand Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09 Jul-09 Aug-09 recovery (FIGURE 13). Export volume Export price Source: China Customs 8 CCM International Co., Ltd.
  12. 12. Corn Products China News Maltitol price glissades in October D omestic maltitol price has seen slip since October, mainly caused by sufficient supply, declining witnessing downtrend. Average corn price in Shijiazhuang has fallen to USD252/t on Oct. 12 from USD283/t Weitong Dextrose & Sorbitol Products Co., Ltd. (Guangdong Weitong, the largest sugar alcohol producer in corn price and falling demand after last month. South China). the leave of Mid-Autumn Festival Thirdly, maltitol price is pulled down (FIGURE 14). The increased corn supply is mainly by sucrose price which is constantly caused by new corn on the market and decreasing. The average price of In Northeast China, domestic key the government’s release of reserved sucrose fell to USD704/t, USD29/t sucrose alcohol production base, corn. Since July 2009, Chinese lower than maltitol price of USD733/ average maltitol price is ranging government has been working hard t on Oct. 12th. Therefore, some between USD761/t~ USD733/t, down on the corn auction. Total trading downstream industries turn to use about USD38/t over the previous volume of the government’s twelve sucrose (both sucrose and sucrose month. The same decline has also auctions has reached 12 million alcohol can be used as edulcorator in taken place in South China, attributed tonnes. Besides, corn dealer is food). to the abundant maltitol supply keeping wait-and-see attitude as the from Northeast China. Actually, government may further cut down In China, only four kinds of sugar South China is one of the leading corn auction price in the near future. alcohol are permitted to use in food consumption regions of maltitol in Corn supply will keep sufficient in the to replace sucrose as edulcorator at China. short run. present, including sorbitol, xylitol, Price Update maltitol and lactitol. Following three factors have led to Secondly, maltitol supply is ample, the price downtrend of maltitol in thanks to enlarged output in Insiders predict that maltitol price China. September boosted by Mid-Autumn will keep downtrend in the short festival. Many producers still have run if corn price continues to fall, Firstly, domestic corn price has some storage currently. Lots of especially in Northeast China. declined constantly since late maltitol producers raised output and Meanwhile, demand for maltitol September, attributed to increased price before Mid–autumn Festival, and price of sucrose is decreasing corn supply. Corn price in according to Mr. Zhang, sales currently. Changchun, Shijiazhuang, Wuhan, is manager from Guangdong Huaiji FIGURE 14: Domestic maltitol price change, Jan. ~ Oct. 2009 780 760 740 720 (Unit: USD/t) 700 680 660 640 620 600 580 10-Jan. 12-Feb. 10-Mar. 12-Apr. 10-May. 12-Jun. 10-Jul. 12-Aug. 10-Sep. 12-Oct. Source: CCM International 9 CCM International Co., Ltd.
  13. 13. Corn Products China News COFCO expects to participate in national corn storage plan C OFCO has been preparing to submit materials to the National Development and Reform Second benefit will be that sufficient corn supply can be guaranteed for these enterprises. For any enterprise Firstly, it can relieve the government’s burden of financial support to the corn storage plan. Since 2007, the Commission and Ministry of Finance that can participate in the corn government has begun to store People’s Republic of China, hoping to storage plan, certainly they will have corn in order to stimulate peasants’ participate in the government’s corn priorities of the access to stored corn. enthusiasm in corn planting. And storage plan of 2009 on condition the government had to spend about that the government can provide In 2008, as government purchased USD60~85/t (including expense on subsidy of USD22 ~ USD29/t to it. 40 million tonnes of corn in corn drying, management and subsidy Northeast China in 2008, decreased for processors, etc) on the corn, Besides COFCO, domestic many corn in circulation in the market had much higher than the subsidy of only large-scale corn deep-processing seriously affected the production USD22 ~ USD29/t demanded by the enterprises also have capabilities for corn processors during H1 2009 enterprises that hope to participate in Market & Company Dynamics to participate in the corn storage in terms of corn supply and higher corn storage plan. plan, said Mr. Yue, assistant production cost caused by raised president of COFCO. Strong financial corn price since this February. Mr. Secondly, it can decrease corn power, sufficient storehouses and Yue reveals that COFCO’s four corn circulation times and ensure corn transportation ability of some corn processing plants located in Jilin have safety. Most of the government’s deep-processing enterprises can help all witnessed a big deficit in H1 2009, stored corn is laid outdoors. the government to better carry out due to too high corn price and still the storage plan. depressed downstream industries like But many small-scale corn deep- corn-based ethanol. processing enterprises are opposed to Actually, domestic many large-scale COFCO’s proposal because they have corn deep-processing enterprises Lastly, enterprises can enjoy to face further intensified competition such as Jiliang Group and CJ Group decreased operation risk by well from large-scale producers who can have expressed their hopes to take coping with the government’s volatile enhance competitiveness through part in the plan, and are expecting policies on corn storage. In 2008, participation in the government’s that the government can issue related many corn processors could not corn storage plan. policies as soon as possible. timely adopt measures to deal with the decreased corn supply since the At present, the government has If the government approves the government didn’t issue any plans of issued no related policies on the corn participation of corn processors, corn storage in advance. Corn supply storage plan in 2009. Insiders predict enterprises that are engaged in situation is of significant importance that this propose will probably come the corn storage plan can get huge to deep-processing enterprises, true in the future. benefits. particularly to producers of citric acid and ethanol whose 70% production The first obvious benefit is the lower cost is on corn. cost on raw material. The subsidy, if provided by the government, can Actually, this is a win-win situation. offset some cost on raw material. This The participation of corn processors will strengthen the competitiveness of in the national corn storage plan is these enterprises. also beneficial to the government. 10 CCM International Co., Ltd.
  14. 14. Corn Products China News Global Sweeteners: net profit down 97% G lobal Sweeteners Holdings Limited. (Global Sweeteners) witnessed its worst performance in history in H1 FIGURE 15: Business performance of Global Sweeteners, H1 2008 and H1 2009 135.87 160.00 2009 (FIGURE 15), with net profit of only USD516,129, down 97.19% over H1 2008. 95.61 120.00 (Unit: million USD) In H1 2009, Global Sweeteners saw 44% decrease in gross profit year on year, recording at USD12 million (TABLE 2), 80.00 mainly resulting from decreased sales 21.29 18.19 volume, dropped sales price but increased 40.00 production cost. Influenced by financial 12.00 0.52 tsunami and melamine scandal, Global Sweeteners’ overall sales volume, average 0.00 H1 2009 H1 2008 Market & Company Dynamics sales price and production cost in H1 2009 have been down 7.3%, 5.8% and up 8.2% Revenue Gross profit Net profit respectively year on year. Source: Semi-annual report of Global Sweeteners TABLE 2 : Gross profit of Global Sweeteners’ key business, H1 2008 and H1 2009 Gross profit (million USD) Products H1 2009 H1 2008 Growth rate (%) Cornstarch and its refined products 3.7 0 - Corn syrup 4.4 10.8 -59% Crystal corn syrup 3.4 9 -61% Sorbitol 0.4 1.55 -75% Source: Semi-annual report of Global Sweeteners brands promotion of retail edible industries like drink and foodstuff Depressed demand from downstream sweeteners with small-package and have seen blooming demand. industries caused the decrease in high end beef. sales volume and price of Global In addition, Global Sweeteners has Sweeteners’ key products like corn At present, retail business of Global launched many new production lines syrup. For instance, sales volume of Sweeteners is beginning to make for its key products. glucose syrup in Global Sweeterners profit, which may become another in H1 2009 decreased by 22.5% to important profit growth point for A new starch sugar plant with total 90,000 tonnes and that of crystalline Global Sweeteners in the future. glucose syrup and malt syrup capacity dextrose, another key product of of 200,000t/a, constructed in Q2 Global Sweeteners, also saw 11% Global Sweeteners expects to make 2009, has been put into operation decrease. Price of starch sugar and good achievement in H2 2009. in Jinzhou in H2 2009. Currently, sorbitol, etc, had maintained low level total starch sugar capacity of Global during H1 2009. According to the semi-annual report, Sweeteners has reached 1,260,000t/ orders for starch sugar of Global a. Moreover, Global Sweeteners Sweeteners has recovered since invested large fund in promotion July, and may maintain uptrend in A 40,000t/a crystalline dextrose during H1 2009. Since early 2009, following months. production line in Changchun Global Sweeteners has endeavored was also successfully launched in to develop some products’ retail Attributed to the soaring sucrose Q3 2009, making total crystalline business and promote brands price and peak consumption season dextrose capacity of Global for these retail products. Global from July to September, both demand Sweeteners reach 240,000t/a. Sweeteners has invested USD110,395 and price of corn syrup have been Actually, sorbitol may share this and USD1 million respectively in its rising largely in China. Downstream same production line with capacity 11 CCM International Co., Ltd.
  15. 15. Corn Products China News of 40,000t/a and Global Sweeteners Global Sweeteners. The active these expansion projects may begin in will adjust production according to promotion carried out in H1 2009 Q2 2010. market situation. will definitely largely push the development of Global Sweeteners. Global Sweeteners was listed in Hong Global Sweeteners will continue to Kong on 20 September 2007. The enlarge overseas market in H2 2009. Global Sweeteners is also company aims to become a leader in Since 2008, Global Sweeterners has programming future development in sweeteners market in Asia or even enjoyed obvious improvement in following years. the world. Also, Global Sweeteners export business. In H1 2009, Global has begun retail business of high Sweeterners totally exported 22,000 According to Ms. Guo, senior director added value products such as edible tonnes corn refined products and of business development in Global sweeteners and high end beef in 9,000 tonnes starch sugar to Japan, sweeteners, Global Sweeteners is 2009. South Korea and Philippines etc., and planning to continually expand total export volume was up 230.9% capacity of starch sugar including Actually, another leading starch year on year. high fructose syrup capacity by 100, sugar producer named Xiwang Sugar 000 t/a, crystalline dextrose by 100, Holdings Co., Ltd. also met 99.5% Market & Company Dynamics Besides, high reputation may bring 000 t/a and maltodextrin by 40, 000 plunge in net profit in H1 2009 (Corn more opportunities to t/a in future two years, with total Products China News 0909, P15). investment of USD44 million. And Jinan Healtang expanding L-arabinose market J inan Healtang Biotech Co., Ltd. (Jinan Healtang), China’s largest L-arabinose producer with Additionally, Jinan Healtang has built up three direct marketing websites But this situation may change in the near future as domestic demand for L-arabinose is expected to see rapid overall capacity of 2,000t/a, is including www.tht001.com, www. increase. actively promoting its L-arabinose tht007.com and www.tht006.com branded “Healtang” currently, currently. Meanwhile, Jinan Healtang L-arabinose is mainly used in food aiming to explore larger domestic is expanding its sales teams. against diabetes and obesity etc. L-arabinose market. L-arabinose is a kind of aldopentoses Besides, Jinan Healtang jointed with with low-calorie. It can be used At present, Jinan Healtang is paying United Daily News and Qilu Weekly, as pharmaceutical intermediate, great attention to domestic market domestic two influencing Medias, to preparing culture medium and used besides overseas market. In order to carry out press conference for “sugar for synthesis in flavour industry. raise the reputation of its L-arabinose revolution” on Sep. 19th 2009. This branded “Healtang” in China, Jinan conference aims to arouse people’s Jinan Healtang is a subsidiary of Healtang is investing large fund in awareness of the much harm done Shengquan Group which is a key promotion. by sucrose and the better benefit by high-tech enterprise founded in 1979. L-arabinose. Jinan Healtang always adhere to The promotion will be firstly carried standards of safety, environmentally out in Shandong province in H2 In China, as a new sweetener, friendliness and hygiene. 2009 and then will extend to whole L-arabinose was approved to be a nation in early 2010, reveals Ms. Jv, food additive by Ministry of Health in Mr. Niu, a sales manager in Jinan salesperson from Jinan Healtang. May 2008. L-arabinose is not widely Healtang, reveals that Jinan adopted due to its much higher price Healtang is domestic unique L- Jinan Healtang has published related than other healthy sweeteners and arabinose producer with large-scale advertisements for L-arabinose less awareness by consumers, but production while domestic other branded “Healtang” on newspapers, popular in overseas market like EU L-arabinose producers like Thomson television, magazine and networks, and US. Thus L-arabinose in China Biotech(Xiamen) Co., Ltd. and BBCA etc. since this September. The is still an export-oriented product Group are of small scale. reputation of “Healtang” brand currently. L-arabinose is rising constantly. 12 CCM International Co., Ltd.

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