With the rising production capacity of corn in 2019, the
competition among corn ultra-processing enterprises is becoming fiercer. While
the cost of corn is rising, the profit of corn ultra-processing enterprises is
decreasing. Since August, corn factories have consistently received fewer
orders, even during traditional holidays, such as mid-autumn festival and
Chinese national day, in which people usually consume more food. From August 26
to 30, 2019, researchers from China
Starch Industry Association made an investigation into Shandong corn
ultra-processing enterprises in order to gain a better understanding of these
enterprises.
According to the investigation report of
Shandong corn ultra-processing enterprises in 2019, corn production capacity
has risen rapidly, leading to a significant increase in supply and intensified
competition in the industry. The high supply of corn, together with its costly
price, has decreased the profitability of processing enterprises. Additionally,
the starch sugar market is in recession this year, and the peak season is not
as prosperous as expected. At present, the market consumption structure has
changed, and an increasing number of people are choosing to reduce their sugar
consumption. The changing eating habits of humans and the increased demand for
low sugar foods has affected the sales volume of industries such as the starch
industry, the maltose syrup industry, the dextrin industry and the glucose
industry.
Finally, as the new harvest of corn from
northeast China is coming to the market, the corn supply of factories in the
Shandong area are overloaded. As a result, the purchasing price offered by corn
ultra-processing enterprises has decreased from RMB 2,100/ton to approximately
RMB 2,000/ton, even though the sales volume in the Shandong area is higher
compared to the southern market. Most corn ultra-processing enterprises
estimate that the purchasing price may even fall to RMB 1,900/ton if corn from
northern China reaches the market with adequate supply and good weather.
Therefore, the price of corn from north China may continue to decline.
Current market prices of corn starch in
China
Based on data collected several weeks ago,
the average asking price of corn starch in the Shandong international market is
around RMB 2,450/ton, and the average trading price is around RMB 2,400/ton.
The price of corn starch in the Hebei international market is approximately RMB
2,440/ton, including taxes. The average asking price of corn starch in the
Shaanxi international market is around RMB 2,570/ton. The average asking price
of corn starch production facilities in the Jilin area is approximately RMB 2,330/ton.
The average trading price of corn starch in the Heilongjiang international
market is approximately RMB 2,180/ton. The average asking price for corn starch
in the Liaoning international market is approximately RMB 2,380/ton.
Crystalized glucose market stabilizes,
while maltose market slows
Recently, the market for crystallized
glucose has stabilized, and prices in certain areas may increase slightly due
to limited supply and storage volume. At present, there is no overall pressure
on the industry’s storage reserves, which has helped prevent market prices from
fluctuating significantly. It is predicted that the crystallized glucose market
will continue to be stable into the future.
In the maltose market, increases in demand
have been limited, and the number of maltose orders has not significantly
increased. Maltose suppliers are mainly selling to regular customers and are
experiencing moderate difficulties in moving their product. Nevertheless,
suppliers are exercising caution in reducing their prices, and only small price
changes occur during negotiations with buyers.
For more information about China’s corn
market, please have a look at our monthly newsletter Corn
Products China News.