Corn Further Processing Companies in Huang-Huai Region of North China Fully Fell Into Loss

By CnAgri2017-04-20 09:31:47 Print

Since April, further processing companies’ margins have differentiated: corn further processing companies in the northeast still had relatively good profits, but the companies in Huang-Huai Region of north China fully fell into loss. In April, the average margin of corn starch and alcohol stood at RMB 80/MT and RMB 140/MT in the northeast; the average loss was RMB 130/MT and RMB 160/MT in Huang-Huai Region of north China.

The main reasons for the loss of corn further processing companies in Huang-Huai Region of north China are as the followings:

(1) The prices of further processed corn products all show the decreasing trend. Since 2017, the operating rate of corn further processing companies in the producing areas has maintained at a high level and further processed products have been in an abundant supply. Owing to off season of demand, alcohol prices generally dropped by RMB 50-100/MT in the producing areas in April; influenced by a downturn of market, the prices of DDGS and corn protein powder also decreased; only corn starch prices stabilized.

(2) Corn costs keep increasing greatly and the price difference between different regions is too great. In April, there was not much corn left in the northeast and purchase prices kept ascending, pushing up corn prices in sales areas and Huang-Huai Region of north China. However, purchase prices of further processing companies only ranged at RMB 1,450-1,500/MT in the northeast and reached up to RMB 1,600-1,700/MT in Huang-Huai Region of north China. The difference of corn costs between different regions is far higher than the price difference of further processed products.