Analysis on China’s booming modified food starch market 10-11-2017

China’s modified food starch market is still booming, even the growth slowed down a bit in 2013, due to booming demand for convenience food. However, as the production quality for domestic manufacturers is still lacking behind international standards, imports are filling the Chinese market and drive domestic products out.


Modified food starch is the result of processing raw material starch by physical, enzymatical, or chemical force. Modified food starched is a common material in the food industry to thickening or stabilising food products in the intention of being more resistant to different temperatures, increase the shelf life, or simply enhance the thickening ability, especially of sauces.


In China, dairy products, as well as sauces, are the top end use application fields of modified food starch, accounting for about three-quarters of the total modified food starch sales volume by manufacturing giant Ingredion, in 2014 and 2015.  

To be more precise, dairy products used about 41,500 tonnes of modified food starch in China in 2015, taking up 7.43% of the national total consumption. Dairy products using modified food starch include yoghurt, milk beverage, and cheese. Because of competition from overseas market, the output growth of China's dairy products has been quite slow during 2013~2015. 


Slowdown in growth but booming imports 

China’s share of modified food starch in comparison to modified starch, in general, is growing steadily. However, the growth of modified food starch has slowed down in recent years, after experiencing a surge in the years before 2013. After all, the CAGR of growth from 2014 to 2016 was less than 7%, after it was more than 8% in the three previous years. 

The high demand for modified food starch is emerging from the busier lifestyles of many Chinese workers, who are more often grabbing convenience food products from the shells instead of spending much time and buying groceries and cooking large meals. Especially young workers are very tempted to choose fast food in order to keep up with their busy daily routine. 

As the country that invented the noodles several thousand years ago, this food is the largest application field for modified food starch in China in 2016. Further common application areas are meat products, bakery products, frozen food, and also dairy products. Manufacturers are profiting from the high demand for this products with higher margins throughout the past years.

The imports of modifies food starch in China have been booming in the past years, due to the fact that the quality and the price of foreign products is often surpassing their Chinese counterparts. China’s exports of modified food starch, on the other hand, only play a small role, as the domestic consumption is growing and the demand outweighs the export. 

Corn-based and cassava-based are dominating 

The major modified food starch products that are manufactured in China, are cassava-based starch and corn-based starch. Those two food starches are mainly used in candies and meat products. The share of those two modified food starch products was even able to increase almost steadily from 2011 to 2016, showing the importance in the Chinese market. 


As China’s production capacity of modified food starch was fluctuation in the past years, the output was growing steadily from 2013 to 2016. Hence, the capacity utilization rate got better during this period. 

The most important region for Chinese modified food starch production is Zhejiang Province, accounted for more than 14% of the national output in 2016. Other major regions in terms of output are Shandong Province, Henan Province, and Jilin Province. It is notable, that most manufacturers of modified food starch in China are either located nearby the raw materials for production, or nearby the downstream consumers to enable fast supply. 

China’s prices of modified food starch are highly depending on the planting area and policies regarding their raw materials. As so, the price of corn modified food starch was affected by the implementation and later the abolishment of the temporary corn stockpiling program of China’s government. The cassava modified food starch price is more formed by the changed planting area in China and the competition of imported starch. 

Notably, the corn starch industry has been suffered from oversupply for a long time. Corn starch output is likely to reach about 24.50 million tonnes in 2017, while the demand might settle around 23.50 million tonnes. Furthermore, the growth of output will even exceed the one of demand.  

In terms of the global modified starch in general, food and beverages are accounting for the largest fields, responsible for more than 32.7% of the modified starch use in 2015. Other areas for it is the paper industry, pharmaceuticals, textiles, and other smaller segments. The Asia-Pacific region is the is the fastest growing area for modified food starch, which opens great investment opportunities, especially in the emerging economies of India and China. 


Where to find the complete research

You can find a complete analysis of China’s modified food starch market in the report 

Supply and Demand of Modified Food Starch in China, Edition (3). 

This report not only deals with the whole supply chain situation from raw materials to end application industries but also gives an outlook for the next five years to prepare for sustainable business decisions. 


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