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China’s Corn Deep-processing Industry Might be Further Restrained

28 October 2011

CHINA - China's corn deep-processing industry may still be restrained by governmental policy in 2012.

According to Guidance about Promoting the Healthy Development of Corn Deep-processing Industry (the Guidance) published in 2007, the proportion of corn consumption in deep-processing industry among its total consumption shall be less than 26 per cent.

However, it is estimated that China’s corn consumption volume in deep-processing industry accounts for over 26 per cent in 2011. Therefore, the government will continue to regulate and restrict the corn deep-processing industry in order to reduce the proportion in 2012.

On the other hand, China's corn is in slightly short supply now. Statistics shows that corn output in 2011 is estimated to reach 181.5 million tonnes, while its consumption volume will reach 181.3 million tonnes and the number will probably get higher in 2012.

Since the country needs to replenish its national stock, the relationship between corn supply and its demand in China is predicted to be tight in 2012.

Moreover, if there is no significant increase of corn output in next five years, the corn supply in China can not meet the demand. But according to the 12th Five-Year Plan of the Development of National Farming, domestic supply of corn, wheat and rice should completely satisfy their demand at home by 2015. In order to achieve the goal, Chinese government should focus on how to increase corn supply and curb its demand. Unfortunately, deep-processing industry is always the first target to be restrained.

Based on the above reasons, it's believed that China’s corn deep-processing industry might be further restrained in 2012.

TheCropSite News Desk

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