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Corn Products China News 202107

July 2021 | 38 pages | ID: CAAFC34E2FCEN
Guangzhou CCM Information Science & Technology Co., Ltd. (CCM)

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In July, due to declines of corn prices, most prices of corn deep-processing products fell accordingly. In addition, influenced by declined corn prices and weak demand, China's price of con oil (first grade)has dropped continuously in recent two months, and declined to USD1,482.02/t in July, a new low for the year.

Policy:

At the end of June, China's Ministry of Finance, Ministry of Agriculture and China Banking and Insurance Regulatory Commission jointly published the Notice on Expanding Coverage of Full Cost Insurance and Planting Income Insurance for Rice, Wheat and Corn. The notice is expected to dramatically increase farmer's motivation in crop plantings.

In July, many provinces launched their provincial agricultural subsidy schemes, in which corn-growing farmers are included.

Market:

In July, Sinograin continued special auctions of non-GM corn from Ukraine and GM corn from US, but overall closure rate was increasingly lower and the market passion for imported corn was waning.

Shouguang won the title of National Starch Deep Processing Industry Cluster District. Shouguang People's government said that it would advance the development of local leading enterprises clusters

China Starch Industry Association published reports and introduced the situation of China's corn starch industry in 2020.

Enterprises:

Enterprises of corn deep processing published their semi-annual reports or heralded their performance in H1 2021.

Meihua's net profit went up by 58% YoY, exceeding the full-year net profit in 2020.

China Starch and COFCO Biotechnology were expected to witness remarkably better performances in H1, 2021. In addition, both enterprises were focusing on expanding the capacity of polylactic acid and its upstream lactic acid.

Bailong Chuangyuan saw mild YoY increase of its net profit in H1 2021. It issued notices and planned to invest in its new projects of 15,000 t/a crystallised sugar and 20,000 t/a dried functional sugar.

Imports & Exports

China exported 12,343 tonnes of corn starch in May 2021, nearly doubling MoM. The export price was USD519.53/t, decreasing by 2.34% MoM. From Jan. to May, China's exports volume of corn starch declined sharply by 87.77% YoY.

In Jan.–May 2021, China imported up to 11.73 million tonnes of corn, up by 323% YoY (exceeding the overall 11.30 million tonnes recorded last year).

The USD/CNY exchange rate in this newsletter is USD1.00=CNY6.4709 on 1 July, 2021, sourced from the People's Bank of China. All the prices mentioned in this newsletter will include the VAT, unless otherwise specified.

HEADLINE

At the end of June, China's Ministry of Finance, Ministry of Agriculture and China Banking and Insurance Regulatory Commission jointly published the Notice on Expanding Coverage of Full Cost Insurance and Planting Income Insurance for Rice, Wheat and Corn. The notice is expected to dramatically increase farmer's motivation in crop plantings. Soon after that, in response, Shandong Province took the initiative to launch the provincial subsidy policy.

The central government recently granted USD3.09 billion (RMB20 billion) of one-time subsidies to crop-growing farmers. In response, some provinces launched their provincial agricultural subsidy schemes, in which corn-growing farmers are included. Accordingly, farmers' motivation to plant corn is expected to increase.

China Starch Industry Association published reports and introduced the situation of China's corn starch industry in 2020. Corn starch industry's annual operating rate went down slightly while the output continued to increase; the demand for corn starch decreased mildly while the deep processing profit of corn starch improved.

The 9th General Meeting of China Starch Industry Association & the 7th World Starch Indstry Conference has been held in Shanghai recently. During the event, Shouguang won the title of National Starch Deep Processing Industry Cluster District. By now, Shouguang's deep processing capacity has reached 3 million t/a, accounting for around 10% of the national capacity.

In July, Sinograin continued special auctions of non-GM corn from Ukraine and GM corn from US, but overall close rate was increasingly lower and the market passion for imported corn was waning. Correspondingly, China's corn price on the market presented a trend of declining.

In late July, China Starch and COFCO Biotechnology, China's two major corn deep processing enterprises, took the initiative to herald their performances in H1 2021, expecting to witness remarkably better performances in H1, 2021. In addition, both enterprises were focusing on expanding the capacity of polylactic acid and its upstream lactic acid.

At the end of June, Bailong Chuangyuan issued two notices in succession. It planned to invest in its new projects of 15,000t/a crystallised sugar and 20,000t/a dried functional sugar, so as to expand production chains and strengthen its competitiveness in the market. Its operation revenue in H1 2021 arrived at USD47.29 million (RMB306.00 million), up by 27.75% YoY; net profit reached USD7.86 million (RMB50.83 million), up by 0.40% YoY.

Meihua's operation revenue reached USD1.70 billion (RMB11.03 billion) in H1 2021, up by 35.51% YoY; its net profit arrived at USD155.16 million (RMB1.00 billion), up by 57.96% YoY, exceeding the full-year net profit in 2020. The company's higher profitability in H1 2021 mainly benefited from the increased sales volume and price of feed grade amino acid products and MSG products.

China exported 12,343 tonnes of corn starch in May 2021, nearly doubling MoM. The export price was USD519.53/t, decreasing by 2.34% MoM. From Jan. to May, China exported 49,277 tonnes of corn starch in total, volume declining sharply by 87.77% YoY.

Due to decreased corn prices and weak demand, the price of corn oil (first grade) in China showed a downtrend in the most recent 2 months and even fell to USD1,482.02/t this month, a new low for the year.
Headline
Corn Products China News 202107
Governmental Direction
China's application scope of full-cost insurance and planting income insurance for rice, wheat and corn to expand
Some provinces in China launch their one-time agricultural subsidy schemes 2021
Market Dynamics
Overview of China's corn starch industry in 2020
Shouguang City wins the title of National Starch Deep Processing Industry Cluster District
Close rate of imported corn auctions continuously decline in July
Company Developments
Two major corn deep processing enterprises expected to witness remarkably better performances in H1 2021
Bailong Chuangyuan increases its capacity of crystallised sugar and dried functional sugar
Meihua's profitability considerably increased in H1 2021
Import & Export Analysis
Chinese corn products Imp. & Exp., May 2021
China's export volume of corn starch in May nearly doubles MoM
Price Update
Price update of corn products, July 2021
Corn oil prices continue to drop in July


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