Lewes, DE -- (SBWIRE) -- 06/19/2015 -- In May 2015, China's market price of corn declines from the high and the market prices of corn products also record declines in general. In detail, the soaring import volume of DDGS pulls down the market price; corn starch price slightly drops in May after three months' rises; the price of corn gluten meal decreases by 6.4% month on month. Additionally, some products achieve rises in prices, such as furfural and MSG. The market price of furfural is pulled up by the increasing operating rates of downstream furfuryl alcohol enterprises; and the MSG price soars to USD65.4/t-USD98.1 /t. Although corn price declines in May, it still remains at high level.

For the company dynamics, cooperation and merger among large enterprises increase. Meihua Bio develops bacteriophage project, which will become the new profit growth point of the company; Bright Food acquires Liangyou Group to become the largest grain & oil supplier in East China; COFCO joins hands with CIC to establish COFCO International Holdings, planning to make its assets of grain, oil and sugar listed within five years.

In Q1 2015, China imported 2.27 million tonnes of sorghum, soaring by 352% year on year. Along with the significantly increasing import volume of sorghum (substitute for corn) and the temporarily-stored wheat being put onto the market, the cost performance of corn is reducing. However, supported by the temporary storage policy for corn, CCM believes that con price is unlikely to drop in ashort term.

The USDC canceled the anti-dumping duty levied on xanthan gum which Meihua Bio exported to the US, widening the difference of anti-dumping duties between China's xanthan gum enterprises. CCM believes that this may boost the internal cooperation of enterprises.

Affected by the reducing operating rate, supply-demand balance in China's corn starch industry was improved. In terms of continues rising corn starch price, corn starch enterprises may achieve turn-around in performance.

The import volume of corn will increase in China, due to the lower price of imported corn and the poor quality of domestic corn.

China's price of DDGS slumped in April 2015, affected by the shrinking demand from livestock industry and the increasing import volume of DDGS. Besides, the high corn price led to serious losses of DDGS manufacturers, and part of them even suspended production.

Meihua Bio takes advantage of its existing resources to develop the bacteriophage formulation project, which not only enriches the production line of the company, but also becomes a new profit growth point in its bio-pharmaceutical business.

COFCO joined hands with CIC to establish COFCO International Holdings, planning to make its assets of grain, oil and sugar listed within 5 years. At that time, the pattern of global grain & oil market will change. Nevertheless, COFCO has a complex internal asset structure, and heavy workload of asset adjustment will be involved before the listing, which increase the difficulty of listing.

Due to the weakening demand from the downstream livestock industry, the demand for wheat is suppressed. At the same time, the auction of temporarily-stored corn will increase the market turnover of corn. Also, deep-processing enterprises in some regions are taking advantage of subsidies to boost their purchases of temporarily-stored corn. These factors will suppress the corn price. Therefore, even the temporarily-stored wheat is put on the market, wheat will not be a viable substitute for corn because it will remain more expensive than corn.

Stimulated by the rising demand for MSG in Southeast Asia, China's export volume of MSG recorded rise in March 201 5. As the China's exported MSG is mainly produced by Meihua Bio and Fufeng Group, the dynamics of these two companies exert a great influence on MSG price.

In Q1 201 5, sorghum recorded large rise in import volume in China, mainly due to the increasing price of China's temporarily-stored corn.

In May 201 5, China's market price of furfural rebounds, because the increasing operating rates form downstream furfuryl alcohol enterprises stimulate the demand. Nevertheless, affected by the rising price of corn cob and the environmental protection problems, the development of furfural enterprises is still restricted.

Report Covered:

- USDC cancels anti-dumping duty on Meihua Bio's xanthan gum
- China's corn starch enterprises expected to turn loss into gain in 2015
- Low price of imported corn may boost import volume in China
- China's DDGS price hits record low in April since 2014
- Meihua Bio utilizes existing resources to develop bio-pharmaceutical business
- COFCO: assets of grain, oil and sugar to go listed within 5 years
- Wheat: unattractive as feed substitute for corn
- Chinese corn products Imp. & Exp., March 2015
- China's export volume of MSG records increase in Q1 2015
- Import volume of sorghum soars in China, Q1 2015
- Price update of corn products, May 2015
- Furfural: price rebounds due to increasing operating rates of downstream enterprises
- COFCO Biochemical plans to establish 1 million t/a corn ethanol project
- CNGOIC: corn output expected to reach 232 million tonnes in China in 2015
- Bright Food acquires Liangyou Group to grasp grain & oil market
- Fuel ethanol gets benefit from Work Plan on Accelerating Quality Upgrading of Refined Oil
- Guangzhou Shuangqiao: first-phase project of 500,000 t/a starch sugar successfully put into trail production
- EPPEN Biotech: 80,000 t/a lysine technical reformation demonstration project under EIA publicity
- India to officially levy anti-dumping duty on China's sodium citrate
- Sun Paper to put xylitol project into large-scale production in Q3 2015

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