Resumption of Export Rebates for Further Processed Products Won’t Increase Export Volume Obviously

By CnAgri2016-08-30 14:40:59 Print Recently, the Ministry of Finance has published the policy of export rebates for corn further processed products, which would resume the export rebate rate for corn starch, aginomoto, alcohol, lactic acid, gluconic acid, lysine and some sugar alcohol products to 13% from 1^st September 2016. It aims to increase exports by reducing prices and improving competitiveness, which will push up the operating rate of corn further processing companies and increase the use of corn. However, the effects of this policy still have uncertainty.             
 
First, the effects of this policy depend on whether domestic corn market price integrates with the world market. Since 2008, China has started to carry out the policy of temporary purchase and storage, so domestic corn market price is far higher than international market, reducing export competitiveness of China’s further processed corn products. After the resumption of export rebate, the export growth of China’s corn further processed products would basically depend on whether domestic corn price drops to a reasonable level.      
 
Second, judging from practical experience, the effects of similar policies are limited. During the period of June 2009-July 2010 and January-December 2015, China provided the export rebate of 5% and13% to corn further processed products respectively, although it promoted an increase in export volume of corn further processed products in 2010 and 2015, yet the increase in indirect corn exports didn’t exceeded 1 million MT and the growth was limited.  
 
Third, in order to avoid trade frictions, the two most important corn further processed products: citric acid/lysine salt and ester are not included in this policy. The policy of export rebate possibly would have limited influence on promoting the exports of other non-main products.  



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this news is published by China feed industry market weekly report 20160829 
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