CCM: China’s L(+)-arabinose: market exploitation being hindered 04-20-2016

The Chinese government is expected to enhance the regulation and supervision on the L(+)-arabinose business, to solve the “untypical” overcapacity problem, according to Tang Yilin, president of Shengquan Group. Specifically, the dull sale of L(+)-arabinose is China can be mainly attributed to the hindered market exploitation.

 

On 2 March, 2016, the annual “Two Session” of China's top legislative body and top national advisory body opened officially. The central government, was expected by Tang Yilin, president of Ji’nan Shengquan Group Share-holding Co., Ltd. (Shengquan Group), a representative of the National People’s Congress, to enhance the regulation and supervision on the L(+)-arabinose and suchlike businesses, so as to solve the “untypical” overcapacity problem of L(+)-arabinose business.


Just like other functional sugars, L(+)-arabinose functions to promote the gastrointestinal motility. More importantly, it regulates the blood sugar level by restraining the small intestines from absorbing sugar: if sugar contains about 3.5% of L(+)-arabinose, about 70% of sugar will not be adsorbed by body, according to the Chinese Centre for Disease Control and Prevention (CDC) and Beijing Research Institute for Nutritional Resources. Now Japan’s Ministry of Health, Labour and Welfare has already listed this functional sugar into “Special Healthcare Food Additive for Blood Sugar Regulation”.


In 2008, L(+)-arabinose was approved by China officially as “New Resource Food”. From then on, the enterprises, including Shengquan Group and Thomson Biotech (Xiamen) PTE Co., Ltd. (Thomson Biotech), pioneered in co-producing L(+)-arabinose and xylose based on corn cob, which broke the monopoly by foreign enterprises. According to CCM’s research, there are 12 L(+)-arabinose producers in China, of which 5 have 300 t/a+ production capacity. They are:

  • Shandong Xieli Biological Technology Co., Ltd. - 2,000 t/a
  • Shengquan Group - 1,500 t/a
  • Shandong Futaste Pharmaceutical Co., Ltd. - 1,000 t/a
  • Thomson Biotech - 500 t/a
  • Zhejiang Huakang Pharmaceutical Co., Ltd. - 300 t/a




However, China’s L(+)-arabinose business is facing “untypical” overcapacity problem. “Now most of producers are suspending production for the dull sale,” stated Tang Yilin.


Take table sugar for example. Now the consumption of table sugar is about 500,000 tonnes, ideally demanding 17,500 tonnes of L(+)-arabinose. In fact, the total consumption reaches only about 100 tonnes now. The weak market demand has led to the overcapacity and high stock.

 

Accordingly, now the market exploitation for L(+)-arabinose is being obstructed.


The L(+)-arabinose business, listed in “New Resource Food”, needs government’s guidance and support, to establish partnership with downstream industries such as food, beverage, condiment, healthcare products and bio-pharmaceuticals. However, the government has yet to take measures. In consideration of production cost, downstream enterprises are inclining to cheap high intensity sweetener (HIS), which shocks the L(+)-arabinose market. According to CCM’s price monitoring, the market price of food grade L(+)-arabinose is about USD21,412/t (RMB140/kg), whilst that of cyclamate (the most widely applied HIS in domestic market) is USD2,141/t (RMB14/kg).


Domestic consumers know little about L(+)-arabinose. This forces enterprises to input huge time and capital in improving publicity. “The input is up to USD611.76-764.70 million (RMB4-5 billion), if we intend to make it known to all Chinese consumers, about 1 billion people, at least 6 promotions for each one. This is far beyond our capability,” said Tang Yilin.


In order to deal with the hindered market exploitation problem for L(+)-arabinose, the Chinese government is expected to:

  • Promote the development of L(+)-arabinose business together with sugar business, to “force” more downstream enterprises to use L(+)-arabinose and expand demand
  • Issue policies to financially support L(+)-arabinose producers and pilot application enterprises, so as to reduce the production costs and increase the consumption
  • Strengthen the promotion of L(+)-arabinose and suchlike functional sugars, to help people establish a common view that “no health of the whole nation means no universal well-off”
  • Set up functional sugar industry alliance, to play a guiding role in sustainable and healthy development


 


About CCM:

CCM is the leading market intelligence provider for China’s agriculture, chemicals, food & ingredients and life science markets. Founded in 2001, CCM offers a range of data and content solutions, from price and trade data to industry newsletters and customized market research reports. Our clients include Monsanto, DuPont, Shell, Bayer, and Syngenta.

 

For more information about CCM, please visit www.cnchemicals.com or get in touch with us directly by emailing econtact@cnchemicals.com or calling +86-20-37616606.

Tag: sweetener, L(+)-arabinose

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