(2011-3-23)Recently, a speech from deputy of the National People's Congress (NPC)and General Manager of Sinograin, Bao Kexin sparked a storm of controversy that whether China's corn deep-processing industry should be further restrained or not.
China's corn consumption is mainly divided into feed consumption and industrial consumption. In recent years, with the increase in China's feed and industrial demand, the growth of China's corn deep-processing capacity increased by 20% year-on-year. However, China's deep-processing industry faces lots of problems: overcapacity with deficient utilization, overexpansion with serious pollution and unsound industry structure with backward technology.
What's more, with the Chinese government's implementation of a series policies on corn deep-processing industry to limit its export since 2010, the government are taking restriction measures every year to regulate and standardize the sound development of this industry.
On one hand, some corn products, such as amino acid, starch sugar, and sugar alcohol, can bring much benefit to the public and enhance people's health and life quality. On the other hand, the consumption volume of corn in its deep-processing industry is small, just accounting for 22% ~ 25% of its total in 2010, so restraining corn deep-processing industry only can't have fundamental effect on easing the tight corn supply/demand relationship and curbing corn price increase. Faced with different kinds of problems, it is inevitable for the reshuffle of China's corn deep-processing industry.
In CCM's monthly newsletter Corn Products China News, CCM holds that China should not restrain corn deep-processing industry, in contrast, it should support some large manufacturers to improve their technology to reduce their unit corn consumption volume and increase its input-output benefit, and also encourage those manufacturers with advanced technology to expand their capacities. Meanwhile, some inefficient production capacity should be eliminated. It is high time for the government to shift its regulations on corn deep-processing industry.
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