Production and Market of Monosodium Glutamate (MSG) in China

Report edition: 2018 edition(6)
Finished time:
Document type: PDF
Total pages (approximately) : 76
Language version: English
Published by CCM
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  • Introduction
  • Main contents

Description:

The description is for the previous version of the report and will be renewed after this new version completed.

In the past few years, the monosodium glutamate (MSG) industry in China has been progressing although amidst the strict supervision from Chinese government and fierce market competition. Through eliminating outdated capacities, the capacity of monosodium glutamate (MSG) reduced in 2014. And affected by the raw materials in upstream and overall social and economic environment, the output also decreased in 2014 compared to 2013. After the standardization and integration of MSG industry, Chinese government also continues to help MSG develop in a healthy way. With years' washing out outdated capacities, many small producers have laid idle or stopped production as the MSG business is unprofitable to them. As of H1 2015, there are about 17 active MSG producers left. Their MSG production sites are mainly distributed in Shandong Province, Inner Mongolia Autonomous Region and Xinjiang Uygur Autonomous Region.

Raw material cost is the most important economy index in MSG production, accounting for nearly 70% of the total cost annually. What’s more, corn starch is the most widely applied raw material in GA production in China. 88.24% (by output) of the MSG was made from corn starch in 2014. Especially before 2015, the high price of corn (main raw material for MSG) and low profit in MSG sales put much pressure on many producers. And Heilongjiang Chengfu Group Co., Ltd.'s MSG production lines stopped in H1 2015.

Affected by the drought and the shortage of raw material supply, the MSG price increased in 2014. And the emergence of many kinds of substitutes has a certain influences to the MSG consumption. It has formed a situation that the two largest companies in China monopolies the domestic MSG market, many producers in first tier cities have transferred to OEM packaging. MSG, as one of necessary condiments in China, will exist for a long time with stable development.

Generally speaking, the domestic market of MSG developed at a flat speed and the industrial structure keeps relatively stable during recent two years. Leading enterprises, including Fufeng Group Co., Ltd., Meihua Biological Technology Group Co., Ltd. and so on, have a strong voice by virtue of the advantages of raw material cost and larger market share, which have an important influence on the ex-works price of MSG in domestic market.

What about the situation of these MSG’s downstream industries? With the increasing population and people's living standard improving in China, more MSG will be needed in the future, especially in urban areas, and MSG will be gradually replaced by other condiments, such as granulated chicken bouillon and mushroom bouillon. Thus, it is suggested that investors join the production of downstream products of MSG. Besides, since consumers prefer well-known condiments, it's necessary to further develop brand awareness.

This report offers the capacity, output and consumption data of MSG in China and to analyse the price fluctuation by tracing domestic producers' production situation in detail. Besides, it also reasonably forecasts the market situation in the next two years with several historical data, helping clients to make production or investment plan.

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