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China Cut Subsidies for Ethanol From Grain

25 April 2012

CHINA - China has lowered subsidies for ethanol produced from grains by more than half, in a bid to lower industrial use and ensure feed supply for the livestock industry.

Grain producers now receive 500 yuan ($79) for a ton of ethanol made with corn or other grain, this was 1,276 yuan last year.

This was announced in a statement by COFCO Biochemical Co. to the Shenzhen Stock Exchange, citing a Ministry of Finance order.

The statement added that ethanol subsidies from non-grain crops will be 750 yuan.

In February this year, the USDA announced that China will likely import 3.0 million tonnes of corn in the 2011/12 market year, more than triple the amount it took in 2010/11.

As Chinese consumers eat more meat, China’s corn imports are likely to evolve along the trajectory of its soybean imports, which have risen fourfold in the past decade.

The Chinese government announced in November that it would discontinue rebates on value-added taxes paid on grain-based ethanol by 2015.

TheCropSite News Desk

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