Sugar vs corn syrup in Asia

Source:Reuters-Global Times Published: 2017/7/20 17:53:39

China’s output of HFCS set to jump 7% this year


China's reform of its vast corn sector is spurring a rapid revival of cheaper high-fructose corn syrup (HFCS), putting it on a collision course with Asian sugar producers in a battle for the lucrative sweetener market.

Output of HFCS is set to jump 7 percent this year, as cheap corn from a sell-down of the country's giant stockpiles encourages producers to boost output or restart idled capacity, according to Zhuochuang, a commodities information service headquartered in Zibo, East China's Shandong Province.

After stalling in recent years, HFCS production will hit 4.15 million tons, about half of the output in the US, the world's top producer, where corn-based sweeteners account for nearly half of the sweetener market.

Syrup, used as a sugar substitute in soft drinks and other liquid products, is gaining popularity in China where it sells for one-third of the price of natural sugar made from cane or sugarbeets, and makes up about 20 percent of demand for sweetener.

China's producers have also found willing buyers abroad.

"HFCS is changing the structure of the sugar industry in China and Southeast Asia," said Liu Hande, vice chairman of the China Sugar Association. "Consumption of sugar has been declining in recent years."

Coca-Cola China boosted its use of the liquid last year, two industry sources said. Coca-Cola China said it could not confirm increased use of HFCS.

China's HFCS demand compares with expected sugar demand this year of nearly 16 million tons.

Exports from Chinese producers grouped in Shandong as well as in South China's Guangdong Province soared nearly 70 percent in 2016 to 454,843 tons, and are on track to rise again this year.

About half went to the Philippines, followed by Indonesia, Vietnam and India.

The push sparked some complaints from sugar producers in Philippines, where domestic output of 2.5 million tons of natural sugar in 2017-18 will already outpace demand.

Following this, the Philippines placed restrictions on Chinese corn syrup imports in March.



Posted in: MARKETS

blog comments powered by Disqus