Corn Further Processing Capacity Would Increase by 17 Million MT in the Next 2-3 Years

By CnAgri2017-04-26 10:45:18 Print

Since 2016, some corn further processing companies have begun to lay down the plan of capacity expansion. It is expected that corn further processing capacity will increase by 17 million MT (seen below) in the next 2-3 years. The main reasons for expansion of corn further processing companies are as the followings:

(1) Corn further processing companies will become the main consumers of temporary reserves, and large corn further processing companies possibly will enjoy the preferential policies during the process of de-stocking of temporary reserves, such as cheap materials and subsidies for processing;

(2)The policy for corn changes to “market-driven purchase + subsidy” from temporary reserves. Since 2016, along with a drop in corn material costs, RMB devaluation and an increase in tax rebate, the demand for exporting is strong and corn further processing margins improve greatly, stimulating companies’ impulse to invest;

(3)Some further processing companies will make the measures to expand market share, improve competitive advantage and defeat the competitors; some companies will focus on increasing capacity of downstream further processing products and plan to improve profitability through extending industrial chain.

It is predicted that corn further processing capacity will ascend obviously under the situation of relaxation of restrictions on new corn further processing projects.

Table, Plan of New-Built Corn Further Processing Capacity of Main Companies, 2017-2018
Unit: 1000MT

Source: BOABC database