Dim Sums: Agricultural Markets in China

China's chemistry-loving leaders built a biofuel industry 25 years ago to dispose of surplus grain generated by policy mistakes. Chief Chemical Engineer Xi Jinping is now in charge, but he's obsessed with food security and EVs. China's biofuel industry is under threat from another chemistry breakthrough based on China's favorite raw material: coal. An article on a Chinese chemical industry site last year saw little hope for China's biofuel industry, describing it as plagued by oversupply, in a constant state of structural adjustment, and facing a continuous barrage of threats, including soaring raw material costs and a shrinking petroleum market. The latest threat is the emergence of a cheaper coal-based ethanol undermining China's plant-based fuel ethanol industry.  China first launched a plan to produce fuel ethanol in 2001, and within a few years several facilities had been constructed in grain-producing provinces to distill a massive stockpile of old corn ...

China has agreed to open its market to Brazilian distillers grains and peanut meal with a sanitary and phytosanitary protocol between China's General Administration of Customs and Brazil's Ministry of Agriculture and Livestock announced today. Distillers grains produced from Brazilian corn and meal produced from Brazilian peanuts that meet requirements specified in the agreement can be imported to China as of the date of the announcement.  Both products are used as ingredients in livestock feed.  Distillers grains are co-products of corn ethanol production, including distillers dried grains (DDG) and distillers dried grain with solubles (DDGS). Brazil produced an estimated 4.2 million metric tons of distillers grains in 2024. China was the largest export market for U.S. DDGS with 6.5 million metric tons exported in 2015. Exports were redirected to other markets after China assessed antidumping and countervailing duties on U.S. DDGS in 2016. In 2024 the United States exported ...

Falling corn prices and a modest rebound in oil prices have brought China's fuel ethanol industry back from the brink of collapse. The industry has never lived up to its hype in China, but now some are calling for a big expansion as Chinese officials look for ways to use up "problem grain" stuffed in government warehouses. The Chinese ethanol industry's recovery is symbolized by COFCO Biochemical (Anhui)'s reported 12-million yuan profit for the first half of 2016, a huge reversal from its 323 million yuan loss last year. 2015 was a dark period for the Chinese ethanol industry. It faced a perfect storm of declining prices, rising raw material costs, and vanishing subsidies. The price of ethanol in China is fixed at 91.1% of the price of gasoline, so declining oil prices in 2014-15 drove down the price of ethanol. In other countries, the price of corn--the main raw material for ethanol in China--fell along with fuel prices. But the Chinese industry had rigidly...

The Chinese government has hoovered up corn at a record pace again this year to keep prices artificially high. Having already spent billions to buy up and store the corn, the government is preparing more subsidies to sell it off. As of February 10, 2016, officials had purchased 82.6 million metric tons (mmt) of this year's corn crop for the "temporary reserve." That's 37 percent of the entire corn crop and roughly matches last year's government purchases. The purchases will continue through next month, so the total could surpass 90 mmt . At a price of 2000 yuan per ton, that would be a 180-billion yuan (nearly $28 billion) corn shopping spree since last November. Some analysts in China estimate the corn stockpile has grown to nearly a year's supply, and officials are now making preparations to offload the  reserves. China's grain bureau has reportedly drawn up a preliminary list of processing enterprises it intends to target for special sales of corn...

Beware the "win-win" campaign that promises to make money for companies while eliminating poverty. China's State Council is preparing a big plan to plant oilseed-bearing trees on sloped land, salinized land, and wetlands they plan to remove from grain production. The plan calls for planting oil-bearing trees like tea oil, walnuts, a type of almond, oil peony, maple and sumac on 200 million mu (about 33 million acres) of land by 2020, with a planned output of 5 million metric tons of edible oils. This will utilize land not suitable for grain production and reduce imports of edible oils, says the draft document. In a common pattern, China is again basically rehashing similar plans formulated in the last decade. In the mid-2000s, a cabal of Chinese authorities, multinational companies and State-owned Chinese companies formulated big plans to produce biofuels by growing starch, sugar or oil-bearing crops to be used as raw material. The most prominent were sweet sorghum, ...

China's "Renewable Energy Plan" for the 12th five-year plan period aims to increase ethanol production by 1.2 million metric tons (mmt) to reach 3 mmt by 2015. The propaganda coming out now indicates a push to meet that goal by stepping up non-grain ethanol production. An article from the "industry research net" posted on several websites several days ago pronounces that it's already clear that China must "take the nongrain ethanol road." The article cited remarks by Premier Wen Jiabao at last month's China-Southeast Asia exposition which attributed recent rises in corn and wheat prices to international market influences but nevertheless called for control of corn-based processing. That presumably includes ethanol. The article then cites a foreign scientist who extols the advantages of non-grain biofuels and lists vague "breakthroughs" made recently in the four grain-based ethanol plants authorized in 2004. The Jilin Ethanol Co. has ...

Sweet sorghum is another crop being touted as a costless source of biofuel, but the road is not so smooth. Sweet sorghum looks like a giant corn stalk about 10 feet high. The stalk contains sugar that can be squeezed out and distilled into alcohol. Sweet sorghum is seen as an attractive alternative because it can grow on poor land that’s unsuitable for other crops. Nongrain biofuel projects are the “in” thing and they’re being pushed by the government and everyone wants a piece of the action. Especially since there are generous government subsidies available. Mr. Liu, an official of the local Agricultural Bureau’s seed company in Huanghua ( Hebei Province ), complained to a China Times journalist that COFCO had left the farmers at the altar. In March 2007 COFCO and its partner, BP petroleum, made plans for pilot projects in Hebei, Shandong, and Inner Mongolia, giving local officials and farmers some sort of promise that they would buy the sorghum to make biofuel on a trial basis. ( CO...