China will limit alcohol, biofuel and other non-animal-feed projects that use grain and edible oils as raw materials in an effort to secure grain supplies, China's top economic planner said Tuesday.
China
will
limit alcohol, biofuel and other non-animal-feed projects that use grain and
edible oils as raw materials in an effort to secure grain supplies,
China
's top
economic planner said Tuesday.
Corn is used to make non-feed products ranging from ethanol to starch and
sweeteners, which consume about one-third of
China
's
corn output. This consumption diverts supply from animal feed millers in the
world's most populous country, raising the prospect of corn shortages, as
consumption is expected to grow much faster than output.
The government will also limit corn starch projects with processing capacity of
less than 300,000 metric tons a year, and eliminate those projects with annual
capacity of less than 100,000 tons, the National Development & Reform
Commission said in industrial guidelines published on its website Tuesday.
Beijing
has failed to halt an
unprecedented expansion of corn processing industries, whose combined annual
capacity has risen to almost 70 million tons in the marketing year ending
Sept.30, Shang Qiangmin, director of the state-backed
China
National
Grain
& Oil
Information
Center
, told
an industry forum last week.
These industries are expected to consume about 50 million tons of corn in the
current marketing year, or about 29% of total corn output in the 2010 calendar
year, the CNGOIC said.
Beijing
recently ordered banks to
stop lending to corn purchasers, and it has cancelled tax breaks for corn
processors to limit their expansion.
The NDRC said
China
will
also limit soybean-crushing projects outside of major producing areas, which
include the northeastern provinces of
Heilongjiang
and
Jilin
and
the Inner Mongolia Autonomous Region.
Soybean crushers' capacity utilization rates averaged about 50% last year,
analysts said.
Total soybean crushing capacity is expected to exceed 100 million tons this
year, Luan Richeng, president of Chinatex Corp., the nation's third-largest
soybean crusher in terms of capacity, said last week.
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