Investigation report of Shandong corn ultra-processing enterprises in 2019 11-07-2019

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.

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