Research Background
The main characteristics of change following the ups and downs experienced by China’s corn market in 2008 are as follows:
1. The price of oil in international market jumped up sharply in the first half of 2008. The corn ethanol industry developed rapidly and the global demand for corn increased with the prices rising perpendicularly. The global economic situation worsened in the latter half of 2008 with a significant decline in the international price of corn and a perpendicular drop in oil prices.
2. The planted acreage in major corn producing regions decreased in 2008 as the planting benefit was lower than that of the soybean. However, the yield of corn had increased by a large margin, so the total production was over 160 million tons, the highest output in history.
3. On the whole, livestock and poultry raising recovered slowly in China in 2008. The development of livestock raising industry was limited and the demand for feed corn decreased because of the influences of large increase in feed cost, limitations in market requirements, livestock and poultry pestilence, melamine contamination emergencies and so on. The consumption of feed corn was expected to be 85.5 million tons in 2008, 5% less than the previous year.
4. The difficulties facing the corn processing industry ranged from rising costs, falling demands, obstructed export, running at a loss, and so on. These resulted in the output of major processed products falling. The consumption of corn in processing industry fell to 35 million tons, 4% less than the previous year.
5. Following the significant increase in international grain prices in 2007, three measures were promulgated by the Chinese government in order to guarantee domestic corn consumption, abolish export tax rebates, impose a tentative export tariff and to administer export quota. The amount of corn exported in 2008 fell off sharply to 250,000 tons, 5.1% of the total exported amount in the previous year.
6. The total corn stock will be 30 million tons this year and the proportion of stock for consumption will rise to 36.4%, therefore the supply-demand pattern has been changed from “tense balance” to “loose supply”.
7. Against the backdrop of supply-demand and sharp price fluctuations in global corn market, Chinese government strengthened the regulation and control of corn market by purchasing and auctioning a large quantity of stock corn.Therefore, China’s corn market operationed stably in 2008, and the extent of price fluctuations were much smaller than that in the international market.The corn market showed a obvious characteristics of policy regulation, increasingly.
8. China’s corn market will be running in a loose supply-demand environment. The great amount of 40 million tons corn purchased by government will limit the decrease space of domestic corn price, and the succedent auction will also prevent the rise in price by large margin. The main tone of operation in corn market will be stable in 2009, and the feature of policy regulation will be more obvious, as well.
Table of Contents
Research Background I
Part One: China’s Corn Production 1
1.1 Variation in Price and Supply-Demand in the Global Corn Market in 2008 1
1.1.1 The Slight Drop in Output of Global Corn in 2008 1
1.1.2 Growing Global Demand for Corn Driven by Fuel Alcohol Industry 2
1.1.3 Decline in Global Corn Stock in 2008 2
1.1.4 The Rising then falling of Global Corn Prices in 2008 3
1.2 Characteristics and Variation in China’s Corn Production 3
1.2.1 The Status of China’s Corn Production in the Global Corn Market 3
1.2.2 Characteristics of Distribution of China’s Corn Production 5
1.2.3 Characteristics of China’s Corn Production in 2008 6
1.3 Analysis of Production Costs and Benefits of China’s Corn 8
1.3.1 Variation in Production Costs and Benefits of China’s Corn 8
1.3.2 Analysis of Production Costs and Benefits of Main Crops in Northeast China 9
1.3.3 Analysis of Production Costs and Benefits of Main Crops in the Huang-Huai-Hai Plains 10
1.3.4 Analysis of Production Costs and Benefits of Major Corn Producing Provinces 11
1.3.5 Planting Benefits Decline in Major Corn Producing Areas in 2008 12
1.4 Prospects of China’s Corn Production in 2009 13
1.4.1 The Slight Drop in Planting Acreage for Corn in 2009 13
1.4.2 The Increase in Benefits from the Previous Year for Corn Planting in China in 2009 13
Part Two: Analysis and Prospects of Characteristics of China’s Corn Trade in 2008 14
2.1 Characteristics of Corn Export in China in 2008 14
2.1.1 Policy Measures Restricting Export in China 14
2.1.2 The Significant Decease in China’s Corn Export 14
2.1.3 The Noticeable Rise in Export Prices 14
2.1.4 East Asia: the Major Export Destination 15
2.1.5 Jilin: A Major Corn Export Province 15
2.1.6 Main Corn Export Enterprises focus on Cofco and Jiliang Group 16
2.2 Characteristics of China’s Corn Import in 2008 16
2.3 Prospects of Trends for Corn Trade in China in 2009 17
2.3.1 Policy Measures Encouraging Corn Export in China 17
2.3.2 Management of Import Quota System for China’s Corn 17
2.3.3 Prospects of Trends for Corn Trading in China in 2009 17
Part Three: Variation and Prospects of Corn Demand in China’s Corn Processing Industry 19
3.1 The Change and Development of China’s Corn Processing Industry in 2008 19
3.1.1 The Developing Situation of China’s Corn Processing Industry 19
3.1.2 The Major Changes in China’s Corn Processing Industry in 2008 21
3.2 Analysis of China’s Corn Ethanol Market in 2008 23
3.2.1 Characteristics of China’s Ethanol Products 23
3.2.2 Distribution of China’s Corn Ethanol Production 23
3.2.3 Variation in the Corn Ethanol Output of China in 2008 25
3.2.4 Variation in China’s Corn Ethanol Trade in 2008 26
3.2.5 Prospect Development for China’s Ethanol Industry in 2009 27
3.3 Analysis of China’s Corn Starch Market in 2008 28
3.3.1 Characteristics of Corn Starch Demand in China 28
3.3.2 Distribution of China’s Corn Starch Production 29
3.3.3 Variation in the Corn Starch Output of China in 2008 30
3.3.4 Variation in Price of China’s Corn Starch in 2008 31
3.3.5 Variation in China’s Corn Starch Trade in 2008 32
3.3.6 Prospect Development for China’s Corn Starch Industry in 2009 33
3.4 Analysis of China’s Corn Starch Sugar Market in 2008 34
3.4.1 Characteristics of China’s Starch Sugar demand 34
3.4.2 Distribution of China’s Starch Sugar Production 35
3.4.3 Variation in China’s Corn Starch Sugar Production 36
3.4.4 Variation in China’s Corn Starch Sugar Trade in 2008 37
3.4.5 Prospect Development for China’s Corn Starch Sugar Industry in 2009 38
3.5 Analysis of China’s Modified Corn Starch Market in 2008 39
3.5.1 Characteristics of Modified Starch Demand in China 39
3.5.2 Distribution of China’s Modified Corn Starch Production 39
3.5.3 Variation in China’s Modified Starch Production in 2008 41
3.5.4 Variation in China’s Modified Starch Trade in 2008 42
3.5.5 Prospect Development for China’s Modified Starch Industry in 2009 43
3.6 Analysis of China’s Corn Monosodium Glutamate Market in 2008 44
3.6.1 Characteristics of China’s Corn Monosodium Glutamate Products 44
3.6.2 Distribution of China’s Corn Monosodium Glutamate Production 45
3.6.3 Characteristics of China’s Corn Monosodium Glutamate Production in 2008 46
3.6.4 Variation in China’s Monosodium Glutamate Trade in 2008 47
3.6.5 Prospect Development for China’s Monosodium Glutamate Industry in 2009 48
3.7 Analysis of China’s Lysine Market in 2008 48
3.7.1 Characteristics of China’s Lysine Products 49
3.7.2 Distribution of Output in China’s Lysine Production 51
3.7.3 Variation in China’s Lysine Production in 2008 51
3.7.4 Variation in China’s Lysine Trade in 2008 52
3.7.5 Variation in China’s Lysine Prices in 2008 53
3.7.6 Prospect Development for China’s Lysine Industry in 2009 54
3.8 Analysis of China’s Citric Acid Market in 2008 55
3.8.1 Characteristics of Citric Acid Demand in China 55
3.8.2 Distribution of Output in China’s Citric acid Production 56
3.8.3 Variation in China’s Citric Acid Production in 2008 57
3.8.4 Variation in China’s Citric Acid Trade in 2008 58
3.8.5 Prospect Development for China’s Citric Acid Industry in 2009 60
3.9 Significant Events in China’s Corn Processing Industry in 2008 60
Part Four: Overview of China’s Livestock Feed Industry and Variation in China’s Feed Corn Demand 63
4.1 Development of China’s animal husbandry Industry in 2008 63
4.1.1 Overview of China’s Livestock Industry in 2008 and Prospect Development in 2009 63
4.1.2 Variation in China’s Live Hog Production in 2008 64
4.1.3 Variation in China’s Meat Poultry Production in 2008 68
4.1.4 Variation in China’s Egg Poultry Production in 2008 72
4.1.5 Variation in Corn Demand in China’s Animal Husbandry 75
4.2 Development of China’s Industrial Feed Production in 2008 76
4.2.1 Variation in the Output of Industrial feed in China in 2008 76
4.2.2 Variation in Product Structure of China’s Industrial Feed in 2008 83
4.2.3 Variation in Prices of China’s Industrial Feed in 2008 83
4.2.4 Variation in Operating Profits of China’s Feed Industry in 2008 84
Part Five: Analysis on the Supply-Demand Equilibrium of China’s Corn in 2008 and Prospects of Supply-Demand in 2009 86
5.1 Analysis of the Supply-Demand Equilibrium of China’s Corn in 2007/2008 86
5.2 Prospects of the Supply-Demand Equilibrium of China’s Corn in 2008/2009 86
5.3 Prospects of the Supply-Demand Equilibrium of China’s Corn From 2010 to 2020 86
Part Six: Variation of China’s Corn Market Prices in 2008 86
6.1 Variation of China’s Corn Price in Stock Market 86
6.1.1 Characteristics of Government Guiding in the Domestic Corn Market 86
6.1.2 Variation of Market Prices in Major Domestic Corn Producing Areas 89
6.1.3 Variation of Market Prices in Major Domestic Corn Consumption Areas 91
6.1.4 Variation of Corn Prices in Major Domestic Ports 91
6.1.5 Variation of Corn Purchasing Prices in the Processing Enterprise 92
6.2 Variation of Corn Price in Future Market 93
6.2.1 Variation of Future Prices for Corn in CBOT 93
6.2.2 Variation of Future Prices for Corn in DCE 94
6.3 Comparison Analysis Between Corn Future Prices and Corn Stock Prices 94
6.4 Prospects of the Price Trend for China’s Corn Stock in 2009 95
Attached Table 96
Table1-1, Global Corn Supply-Demand Balance (02/03-08/09) 96
Table1-2, Corn Planting Acreage in China By Region (2003-2008) 97
Table1-3, Total Output of China’s Corn By Region (2003-2008) 98
Table1-4, Corn Yield of China By Region (2003-2008) 99
Table1-5, Variation in Planting Costs and Benefits of China’s Corn (2003-2007) 100
Table1-6, Comparison of Costs and Benefits of Soybean, Corn, Rice and Wheat Production in Heilongjiang Province (2003-2007) 100
Table1-7, Comparison of Costs and Benefits of Soybean, Corn, Rice and Wheat Production in Jilin Province (2003-2007) 101
Table1-8, Comparison of Costs and Benefits of Soybean, Corn, Rice and Wheat Production in Liaoning Province (2003-2007) 101
Table1-9, Comparison of Costs and Benefits of Soybean, Corn, Rice and Wheat Production in Inner Mongolia Province (2003-2007) 102
Table1-10, Comparison of Costs and Benefits of Soybean, Corn, Peanut and Cotton Production in Shangdong Province (2003-2007) 102
Table1-11, Comparison of Costs and Benefits of Soybean, Corn, Peanut and Cotton Production in Hebei Province (2003-2007) 103
Table1-12, Comparison of Costs and Benefits of Soybean, Corn, Peanut and Cotton Production in Henan Province (2003-2007) 104
Table1-13, Comparison of Costs and Benefits in the Major Corn Producing Areas (2003-2007) 104
Table2-1, Variation in Export of China’s Corn By Month (2005-2008) 105
Table2-2, Export Amount and Share of the Main Corn Exprot Enterprises in China 105
Table3-1, Main Corn Ethanol Production Enterprises in China and their Production Capacity 106
Table3-2, Main Corn Starch Production Enterprises in China and their Production Capacity 107
Table3-3, Main Starch Sugar Production Enterprises in China and their Production Capacity 108
Table3-4, Main Corn Monosodium Glutamate Production Enterprises in China and their Production Capacity 109
Table3-5, Main Lysine Production Enterprises in China and their Production Capacity 109
Table3-6, Main Citric Acid Production Enterprises in China and their Production Capacity 110
Table4-1, Output of China’s Industrial Feed By Region (2003-2008) 111
Table4-2, Output of China’ s Compound Feed By Region (2003-2008) 112
Table4-3, Output of China’ s Live Hog Compound Feed By Region (2003-2008) 113
Table4-4, Output of China’ s Meat Poultry Compound Feed By Region (2003-2008) 114
Table4-5, Output of China’ s Egg Poultry Compound Feed By Region (2003-2008) 115
Table4-6, Output of China’s Concentrated Feed By Region (2003-2008) 116
Table4-7, Output of China’ s Live Hog Concentrated Feed By Region (2003-2008) 117
Table4-8, Output of China’ s Meat Poultry Concentrated Feed By Region (2003-2008) 118
Table4-9, Output of China’ s Egg Poultry Concentrated Feed By Region (2003-2008) 119
Table4-10, Output of China’ s Additive Premix By Region (2003-2008) 120
Table5-1, Balance Table of Corn Supply-Demand in China (2001/02-2009/10) 121
Appendix 122
Figure Contents
Figure1-1, Distribution of Global Corn Production 1
Figure1-2, Proportion of the Total Output of Main Corn Producing Countries in the World (2006-2008 On Average) 1
Figure1-3, Variation in Global Corn Output (1962-2008) 2
Figure1-4, Carryout and Ratio of Stocks in Consumption of Global Corn (02/03-07/08) 3
Figure1-5, Variation in Price Index of CBOT Corn (2008.01-2008.12) 3
Figure1-6, Export Pattern of Global Corn 4
Figure1-7, Variation in Import and Export of Corn in China (1990-2008) 5
Figure1-8, Distribution of China’s Corn Production 6
Figure1-9, Variation in Corn Planting Acreage in China (1979-2008) 7
Figure1-10, Variation in Corn Yield in China (1979-2008) 7
Figure1-11, Variation in Total Production of Corn in China (1979-2008) 8
Figure1-12, Variation in Planting Costs and Benefits of Corn in China (2003-2007) 9
Figure2-1, Variation in Monthly Export of Corn in China (2005-2008) 14
Figure2-2, Variation in FOB Price for Corn Export in China (2005-2008) 15
Figure2-3, Export Destinations for China’s Corn in 2008 15
Figure2-4, Main Export Provinces for China’s Corn in 2008 16
Figure2-5, Variation in Monthly Import of Corn in China (2007-2008) 16
Figure2-6, Original Main Corn Import Countries in China in 2008 17
Figure3-1, Distribution of China’s Corn Processing Capacity by Province 20
Figure3-2, Variation in Consumption and Consumption Proportion of Industrial Corn in China (1998-2008) 21
Figure3-3, Structure of Ethanol Products in China (2007) 23
Figure3-4, Distribution of Corn Ethanol Production Capacity in China 24
Figure3-5, Distribution of Corn Ethanol Enterprises in China 24
Figure3-6, Variation in Total Production of Corn Ethanol and Fuel Ethanol in China (1997-2008) 25
Figure3-7, Variation in Ethanol Export in China (2000-2008) 26
Figure3-8, Variation in Monthly Ethanol Export and FOB Price in China in 2008 27
Figure3-9, Starch Supply Structure in China in 2007 29
Figure3-10, Distribution of Starch Production Enterprises in Relatively Larger Scale in China by Province 29
Figure3-11, Distribution of Major Starch Production Enterprises in China 30
Figure3-12, Variation in Starch Output in China (1997-2008) 31
Figure3-13, Variation in China’s Corn Starch Prices by Month (2007.01-2008.12) 32
Figure3-14, Variation in Import and Export of Corn Starch in China (1997-2007) 32
Figure3-15, Variation in Monthly Corn Starch Export and FOB Price in China in 2008 33
Figure3-16, The Structure of Starch Sugar Products in China in 2007 34
Figure3-17, The Structure of Starch Sugar Demand in China in 2007 35
Figure3-18, Distribution of Starch Sugar Production Capacity in Relatively Large Scale Enterprises in China by Province 36
Figure3-19, Distribution of the Major Starch Sugar Producing Enterprises in China 36
Figure3-20, Variation in Output of Starch Sugar in China (1997-2008) 37
Figure3-21, Variation in Export of Starch Sugar in China (1997-2008) 38
Figure3-22, Variation in China’s Starch Sugar Exprot by Month in 2008 38
Figure3-23, Distribution of Modified Starch Production Capacity By Province 40
Figure3-24, Distribution of Major Modified Starch Producing Enterprises in China 41
Figure3-25, Variation in Output of Modified Starch in China (1997-2008) 42
Figure3-26, Variation in Import and Export of Modified Corn Starch in China (2000-2008) 43
Figure3-27, Variation in Import and Export prices of Modified Corn Starch by month in 2008 43
Figure3-28, Distribution of Production Capacity of Corn Monosodium Glutamate By Province 45
Figure3-29, Distribution of Major Monosodium Glutamate Producing Enterprises in China 46
Figure3-30, Variation in Output of Monosodium Glutamate in China (1997-2008) 47
Figure3-31, Variation in Import and Export of Monosodium Glutamate in China (2000-2008) 47
Figure3-32, Variation in Monthly Monosodium Glutamate Export and FOB Price in China in 2008 48
Figure3-33, Process Sketches for Lysine Hydrochloride Production 49
Figure3-34, Distribution of Production Capacity of Lysine in China by Province 50
Figure3-35, Distribution of Major Lysine Producing Enterprises in China 51
Figure3-36, Variation in Output of Lysine in China (2000-2008) 52
Figure3-37, Variation in Import and Export of Lysine (Including Esters and Salts) in China (1996-2008) 53
Figure3-38, Variation in Lysine Prices in China (2007-2008) 54
Figure3-39, The Structure of Demand for Citric Acid in China in 2008 55
Figure3-40, Distribution of Output of Citric Acid in China by Province 56
Figure3-41, Distribution of Major Citric Acid Producing Enterprises in China 57
Figure3-42, Variation in Production Capacity of Citric Acid in China (1997-2008) 58
Figure3-43, Variation in Import and Export of Citric Acid in China (1997-2008) 59
Figure3-44, Variation in Monthly Citiic Acid Export and FOB Price in China in 2008 59
Figure4-1, Distribution of Live Hog Production Areas in China in 2008 65
Figure4-2, Variation in Live Hog Stock in China (1997-2008) 66
Figure4-3, Variation in Fatten Pig and Piglet Prices in China (2007-2008) 67
Figure4-4, Practical Benefits of Live Hog Raising in China, Henan and Guangdong (Purchasing Piglet) (2007.01-2008.12) 68
Figure4-5, Practical Benefits of Live Hog Raising in China , Henan and Guangdong (Self-bred Piglet) (2007.01-2008.12) 68
Figure4-6, Distribution of Meat Poultry Production Areas in China 69
Figure4-7, Variation in Output of Poultry Meat in China (1996-2008) 70
Figure4-8, Variation in Average Price for Broiler and chicks in China in 2008 71
Figure4-9, Variation in Average Benefits of Broliers Raising in the Major Producing Areas, Shangdong and Henan 72
Figure4-10, Distribution of Egg Poultry Production Areas in China 73
Figure4-11, Variation in Output of Eggs in China (1996-2008) 74
Figure4-12, Variation in China’s Egg Prices in Hebei, Henan and Shanghai in 2008 74
Figure4-13, Variation in Benefits of China’s Egg Chicken Raising in Hebei, Henan and Shanghai in 2008 75
Figure4-14, Variation in Output of Industrial Feed in China (1996-2008) 76
Figure4-15, Variation in China’s Monthly Output of Feed in Relatively Large Scale Enterprises in 2008 77
Figure4-16, Variation in Output of Compound Feed in China (1996-2008) 77
Figure4-17, Variation in Output of Compound Feed for Live Hog in China (1996-2008) 78
Figure4-18, Variation in Output of Compound Feed for Meat Poultry in China (1996-2008) 78
Figure4-19, Variation in Output of Compound Feed for Egg Poultry in China (1996-2008) 79
Figure4-20, Variation in Output of Aquatic Compound Feed in China (1996-2008) 79
Figure4-21, Variation in Output Of Concentrated Feed in China (1996-2008) 80
Figure4-22, Structure of Concentrated Feed Products in China in 2008 80
Figure4-23, Variation in Output of Concentrated Feed for Live Hogs, Meat Poultry, Egg Poultry and Ruminants in China (2001-2008) 81
Figure4-24, Variation in Output of Additive Premix in China (2001-2008) 81
Figure4-25, Structure of Additive Premix Products in China in 2008 82
Figure4-26, Variation in Output of Feed Additive Premix for Live Hogs, Meat Poultry, Egg Poultry, and Ruminants in China (2001-2008) 82
Figure4-27, Variation in the Structure of Industrial Feed Products in China (1996-2008) 83
Figure4-28, Variation in Price of Compound Feed for Fatten Pigs, Broliers and Egg Chickens in China (2006-2008) 84
Figure4-29, Variation in Monthly Profits from Compound Feed for Live Hogs, Broilers and Egg Chickens in the Feed Industry in 2008 85
Figure6-1, The Turnover and Closed Prices of Temporary Corn Reserves for each Auction in China in 2008 88
Figure6-2, Variation in Average Prices for Major Corn Producing Areas in China (2007-2008) 89
Figure6-3, Comparison between Variation in Corn Prices and Soybean Prices (2007-2008) 90
Figure6-4, Comparison of Price for Corn and Soybean (2007-2008) 90
Figure6-5, Variation in Average Prices for Major Corn Consumption Areas in China (2007-2008) 91
Figure6-6, Variation in Corn Prices at the Main Ports (2007-2008) 91
Figure6-7, Variation in Corn Purchasing Prices in the Processing Industry (2007-2008) 92
Figure6-8, Variation in the Future Price Index of CBOT Corn (2008.01-2008.12) 93
Figure6-9, Variation in the Future Price Index of DCE Corn (2008.01-2008.12) 94
Figure6-10, Comparison of Future Prices of DEC Corn and China’s Average Corn Stock (2008.01-2008.12) 95