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Serving the domestic market in China
While China exports some of its processed corn products, its primary focus is serving the domestic market. That’s reflected in the final products it emphasizes: Cornstarch goes into a wide range of food applications in China. Beverage and industrial alcohol, lysine, citric acid, and monosodium glutamate also account for a significant share of the Chinese industry’s output.
Fuel ethanol and high fructose corn syrup are relatively minor products in China. As in the U.S., almost a third of all corn ends up as processed feed ingredients (corn gluten feed, corn gluten meal and distillers’ grains), most of which goes to China’s livestock sector.
“There are some reports of exports, mostly to South Korea, but China’s corn prices are up about 20% this year, so some of their feed products have been priced out of the international market,” says Gale.
China’s processing sector could grow by 15% next year, while demand from China’s livestock sector could grow by 3-5%, according to U.S. Grains Council CEO Tom Dorr. That adds up to an opportunity for U.S. corn.
“While the council is projecting higher [Chinese corn production] than last year…conservative estimates of demand growth suggest China will likely need to import,” Dorr says.
Based on a crop tour of China’s top corn-producing provinces, the council currently anticipates Chinese corn purchases could total almost 80 mbu and 2.5-3 million metric tons of distillers dried grains.
Late November 2010