Industrial Biotechnologies China News 1101

Food prices have experienced sharp rises partly caused by raw material shortages during 2010. The CPI was 5.1% in November 2010, reaching the record high for the past 28 months. Among the major raw materials of foodstuffs, corn also witnessed a remarkable price rise in 2010, with average price growth rate of 5%-10% in different areas. Owing to the higher prices of domestic corn than foreign one, the corn import volume reached a record high in 2010, almost 20-45 times higher than those during the past four years.

People have attributed shortage of corn supply to fuel ethanol production since 2006. In 2010, fuel ethanol production has been accused of “competing for food with human being” by the public again. Although the accusation has been proved false by some people since the corn consumption in fuel ethanol production accounted for only 2.3% of the total output of corn in 2010 in China, yet to avoid further dispute over this matter, currently the Chinese government is promoting non-grain fuel ethanol production on a national scale. For example, Henan Tianguan and COFCO are both accelerating the commercialization of cellulosic fuel ethanol at present and expected to realize it within two years. Also, methanol gasoline might get an authorized entrance to a larger market after the M15 national standard is officially issued in first half of 2011. Furthermore, domestic biodiesel has been officially exempted from consumption tax again since December 24, 2010, which boosts the growth of domestic biodiesel industry.

The corn price rise will also direct other biomaterial and bio-based chemical producers to select other affordable raw materials, like straw, or to plan capacity expansion in order to further cut down the current production costs. For example, Songyuan Bairui officially launched its 50,000t/a production line of bio-based polylol in early December 2010 based on straw material. Shenzhen Ecomann and Shandong Full Win are preparing for capacity-expansion projects.

Given that the corn prices might probably still remain high in 2011, corn starch-based products will directly see prices’ upward trends or being high, which will further promote the food production costs in 2011. The CPI is expected to exceed the level of 2010 according to lots of domestic media coverage.