Sweeteners China News
On 26 Feb., 2016, the European Commission unveiled the primary results of the anti-dumping investigation into aspartame from China: 55.4-59.4% anti-dumping duties imposed provisionally on Chinese aspartame exporters. Probably, Sinosweet will be the exporter impacted the most. However, thanks to its good word-of-mouth, the company will not suffer a disastrous sales decline in the EU market.
In early March, 2016, Guangxi officially launched the 2nd business start-up project for the local sugar industry. It is expected that, after 5-year development, the industry will achieve transformation and upgrading, involving sugarcane planting, sugar making process, enterprise scale and sustainable development.
During the 2016 "Two Sessions", several members/ representatives suggested that the government should take more measures against sugar smuggling, since this is a key setback in the industry development.
The Chinese government is expected to enhance the regulation and supervision on the L(+)-arabinose business, to solve the "untypical" overcapacity problem, according to Tang Yilin, president of Shengquan Group. Specifically, the dull sale of L(+)-arabinose is China can be mainly attributed to the hindered market exploitation.
In 2015, the combined output of saccharin from the 3 Chinese designated producers showed YoY fall, mainly impacted by the stricter environmental protection policy. This helped push up the price,which however drew back the export business. In 201 6, the growing rigid environmental protection policy will continue influencing the domestic saccharin production.
In 2015, Baolingbao achieved large growths in sales and net profit, which can be mainly attributed to the decreased costs and increased sales. It is expected that in 201 6, the company will continue stable rises.
In March 2016, Guilin Layn released its full-year 2015 financial report. Specifically, its sales of plant extracts increased stably. In 2016, the company will still focus on developing its natural sweetener business.
In March 2016, QHT released its full-year 2015 financial report. Thanks to the large rises in sales of prebiotics end products and Guilinggao, the company made a fairly good performance. In 2016, it will strategically strip the Guilinggao business off and focus on developing functional sugar business.
In Q1 2016, the ex-works price of HFCS continued falling, mainly because of the decreased price of corn and the limited downstream demand. It is expected that the HFCS price will fall continuously this year.
In 2015, China's export of sorbitol decreased, mainly because Southeast Asia including Thailand and Vietnam, down-regulated the imports from China. As the cost of raw material corn is falling, which will help establish price advantage, and the foreign demand for syrup sorbitol is inclining to recovery, it is expected that in 2016, the sorbitol export will achieve recovery growth.
On 2-16 March, 2016, the annual “Two Sessions” (NPC & CPPCC) was held successfully. Specifically, the supply-side structural reform was a hot topic. In Nov. 2015, President Xi Jinping raised to carry out this reform. From then on, measures such as de-capacity, de-stocking, de-leveraging and de-cost have played an important role in advancing the reform.
It is a very prominent problem that the supply and demand is imbalanced, in view of both agriculture and industry.
Take corn for example: its stock is now up to 250 million tonnes, which is more than enough for the demand in 2016 even if no corn is harvested this year. De-stocking is a focus in this industry. Many policies, such as the target sales of corn will be issued in succession. One to be highlighted is that in autumn, China will cancel the purchase for temporary storage policy in Heilongjiang, Jilin and Liaoning provinces and Inner Mongolia Autonomous Region, and instead will issue the planting subsidy policy, which is expected to be indexed to target price mechanism. Accordingly, this is aimed at optimising the planting structure and then reducing the stock.
All this will be favourable for the extremely high price of corn in China to return to normal. For Chinese corn sweetener enterprises, it will help reduce the production cost and increase the profit.
HIS, for example: the continuous capacity expansion makes the supply and demand imbalanced. Enterprises, with an intention to promote sales, launch a price war inevitably. This, however, only leads to anti-dumping investigations made by foreign countries: at the end of Feb., the EU preliminarily decided to levy anti-dumping duties on Chinese aspartame exporters.
Also involved in such typical overcapacity, China's functional sugar industry is facing deficient market recognition also. This has now resulted in the slow market expansion and the dull sales. It is expected that the government could issue policies to forward its development, and that enterprises can make greater efforts to expand the application by enlarging publicity and expanding sales channels.