Guangzhou China Mar. 21, 2011 –"Chinese government should restrain the unhealthy development and blind expansion of corn deep-processing industry, especially starch, monosodium glutamate, and alcohol industries." said Bao Kexin, General Manager of China Grain Reserves Corporation (Sinograin), who is also a deputy of the National People's Congress (NPC), on a domestic famous press on March 7th 2011, when NPC and Chinese People's Political Consultative Conference were on-going. This speech has sparked a storm of controversy that whether China's corn deep-processing industry should be further restrained or not.
The tight supply/demand relation of corn in 2010 is the main cause for Mr. Bao to point out this opinion, and he considers whether corn deep-processing industry is going to be restrained or not, and it will greatly intensify the undersupply situation of corn in the market, which will bring negative effect on the development of feed industry and drive up corn price. He emphasized that deep-processing industry couldn't contend for grain with people, and it ought to be restrained to a further step.
COFCO, one of the largest state-owned corn deep-processing companies in China, responded to Mr. Bao, since one of his opinions was accepted by the government, it would bring negative effect on its corn deep-processing business. He pointed out that corn consumption volume in deep-processing industry just takes up a small proportion in the whole corn consumption, and if corn is only used as food and feed, corn's added value will be largely wasted as corn deep-processing products can bring much added value and enhance people's quality of life.
CCM holds that China should not restrain corn deep-processing industry, by 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 ought to be eliminated. It is high time for the government shift its regulations on corn deep-processing industry.
Source: CCM International