China's corn starch production will grow by 10-14 percent this year after only 2 percent growth in 2009, and output is likely to grow 5-10 percent annually in the next five years because of demand for food additives, industry officials said on Wednesday.
"Demand (for food additives) is solid. We expect 10 percent growth in the next five years (2011-2016), or at least 5 percent growth," Wang Licai, vice-chairman of the China Starch Industry Association, told Reuters on the sidelines of a corn conference in Dalian.
Yu Zuojiang, deputy general manager of COFCO Ltd's biochemical and bio-energy division, said beer makers were using more corn starch as a substitute for rice and he expected starch production to grow by 5 percent in coming years.
Singapore-listed China Sun Bio-Chem Technology Group Co Ltd plans to double its corn starch production to 4 million tonnes within the next five years because of strong sweetener demand, its deputy general manager Wu Jingjie told reporters. China produced 25.78 million tonnes of corn starch in 2009, accounting for 63 percent of the 41 million tonnes of corn used in the whole of its corn processing industry, including ethanol production. Beijing has banned new ethanol plants from using corn because of food security concerns since 2007.
Beijing has said it would also not approve new investments in the starch processing industry, but growth had continued over the past few years during an industry restructuring in which big companies took over smaller rivals, industry officials said.
Expansion of the starch processing industry and rising feed demand have driven up the country's corn consumption and could prompt shortages at home in future as domestic production may not be high enough to meet growth in demand.
Wang said the recent surge of China's corn imports was driven by the feed industry, not by processors, which were still uncertain whether Beijing would allow genetically modified imported US corn to be used in food additives. "More imports by the feed industry could leave more domestic corn for the processing industry. This year is a turning point for corn imports, in future, imports will become regular," said Wang.