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Chinese Businesses Investing in Corn Deep Processing

Method is an effective way to reduce large corn stockpile containing low quality corn

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The supply-demand situation for corn in China is still imbalanced in 2018, with a surplus of supply. Furthermore, the market is even facing a continuing decreasing planting area. While the country is still sitting on a huge corn stockpile, domestic companies are investing in different downstream industries, such as corn deep processing.

According to CCM’s research, China is offering export subsidies for deeply processing products. Especially in the northern part of China, subsidies for deep-processing enterprises are being implemented.

To be more precise, Chinese governmental officials revealed subsidies for feed and corn deep processing enterprises in the country. Corn deep processing enterprises, including corn starch and alcohol producers, that exceed a certain processing capacity, as well as feed enterprises with a high annual output that purchased corn and processed it before June 30, 2018, will get a special subsidy per tonne of purchased and processed corn.

Jilin Province, one of China’s major corn producing areas, took the lead to disclose a subsidy for feed companies. Compared with last year, both Heilongjiang and Jilin shortened the required corn purchasing period and decreased the subsidies.

After 10 years of restrictions, China’s government is opening the access of foreign investments into the corn deep processing industry again. The government is aiming to enhance the economy with this step and also hopes to improve the effective way to reduce the huge corn storage.

China’s corn deep processing industry actually has the longest processing chain in all food crops processing. After all, up to 2,000 downstream products can be created from processing corn. The corn deep processing industry has segments in the food business, medical, daily supplies, fuel, and more.

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