NEW YORK, June 2, 2016 /PRNewswire/ -- In April 2016, the Chinese government issues many policies for corn industry. For instance, China has canceled the purchase policy for temporary storage which has been implemented for 8 years and will set up subsidy policy and the minimum purchase price to ensure producers' benefits. The purchase policy of corn for temporary storage was originally established to solve the sales difficulty while finally resulted in .250 million tonnes of corn inventory.
In addition, the MOA issued the China Agricultural Outlook Report (2016-2025) on 23 April, estimating the planting area, yield, consumption, price, import and export of corn in the coming 10 years. In the future, China will focus on reducing the planting area and yield but increase the consumption and import of corn.
The prices of lysine, HFCS, and corn oil report different degrees of declines affected by the falling corn price. But the falling price of HFCS increases its advantage in substituting cane sugar. The cost advantage also boosts the sales volume, from which some enterprises make profit. For example, Baolingbao increased the sales volume of HFCS with the help of the low price, which contributed most to its revenue. Xiwang Foodstuffs's performance was also improved by the falling product price.
Nevertheless, the price declines of some products drag down the performance of some enterprises. China Starch reported a YoY fall of 10.89% and a YoY fall of 14.80% in main businesses corn starch & byproduct of corn processing and fermentation & downstream product because of the falling product price.
The import volume of corn rises sharply. Ukraine replaces the USD as the largest import origin of corn in China. What's more, Ukraine is expanding its export share of corn in China. Notably, influenced by the Spring Festival and the falling corn price, China's import volumes of sorghum, barley and other corn substitutes all reduce.
The USD/RMB exchange rate in this report is USD1.00=RMB6.4585 on 1 April, 2016, sourced from the People's Bank of China. All the prices mentioned in this report will include the VAT, unless otherwise specified.
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