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Using New Ways to Solve the Issue of Corn stocks Needs to Take the Sustainability of Supply-Demand and Economic Benefits

China Agriculture Report By CnAgri2017-03-15 09:18:46China Agriculture Report Print

So far, the stocks of temporary corn reserves still have reached 230 million MT, higher than corn consumption of a year; especially, 80 million MT of corn would exceed the time limit of storage, so it is urgent to consume stocks. Recently, Chenxiwen has proposed three ways of cutting down the stocks: the first is to increase fuel alcohol capacity; the second is to improve xylitol production; the third is to produce auto-degradative corn starch mulch. However, by adopting new ways to solve the problem of corn stocks, the sustainability of supply-demand and economic effectiveness should be fully considered.

First, corn supply and demand would be balanced better. Owing to a drop in planting areas in non-superiority producing areas such as Sickle-Shape Region, domestic corn output would stabilize; thanks to the supporting policies for further processing companies and feed mills, the demand for corn from the downstream also improves. 2016/17 corn stocks would increase by 20 million MT and would further reduce in the next several years.

Second, improving fuel alcohol and xylitol capacity and producing corn starch mulch both mean that corn processing would improve obviously in the short term. However, along with the consuming of corn stocks (230 million MT), the situation of a tight supply would reappear, which would push up corn prices and the imports.

Third, judging from the long term, it needs to take the market-oriented profitability of new corn processing projects into further consideration.

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