GIRACT
Starch Industry Overview
February/March 2011
Starch Italics
www.giract.com
Starch Italics
Starch Industry Overview
Feb/Mar 2011
TABLE OF CONTENTS
June/July 2010 © GIRACT 2010
Crops and grains
p.1 Corn: Buying Opportunity Ahead
p.2 Corn reaches 2 1/2 year high on supply
fears
Overfertilizing corn undermines ethanol
p.3 Farmers harvest 56kt of corn residue for
POET Emmetsburg cellulosic ethanol
project
p.4 Ethanol Corn Approved
p.5 Huge demand for corn boosting food
Starch and derivatives
p.5 Readers misinformed regarding high-
fructose corn
p.6 Archer Daniels Midland: Corn Sweetener
Prices to Jump 25%; Strong Mexico
Demand
Govt releases 18.39 lakh t sugar for
Feb'11- India
p.7 Exclusive - Sugar-squeezed Brazil buys
US ethanol
Company News
p.8 Strong ethanol performance part of
ADM's profitable Q2
Corn price, delays, operational issues
contribute to bankruptcy
p.9 Cargill to build new Brazilian corn
processing plant for starches and
sweeteners
p.10 Cargill purchases Tate & Lyle plant
Global Sweeteners‘ revenue and gross
profit surged by 25.7% and 23.1% driven
by increased product price
Bio-fuels
p.12 Nebraska's first ethanol plant reaches
milestone
Bio-fuels (Contd)
p.12 Microbiologists aim to optimize bio
ethanol production
p.13 Limiting Ethanol Production
Storms, seasonal demand impact ethanol
markets
p.14 South Korean firm plans to invest USD
300 mio for ethanol plant
p.15 Tata to invest USD 15 mio in
Mozambique sugarcane ethanol project
Ethanol fueling trip to Denmark
p.16 Brazil Cosan Sees USD 2 bio Synergies
Generated By Raizen Ethanol Venture
Export of molasses, ethanol to fetch
higher income
p.17 Petrobras To Double Biofuels Production
With Eye On Global Shipments
p18 Bug Creates Butanol Direct from
Cellulose
p.19 Zein technology to go commercial at
Illinois ethanol plant
p.20 World starves as Americans burn food to
stay on the road
Corn-based fuel still a target on national
stage
Bioplastics
p.21 Biodegradable plastics growth linked to
composting infrastructure
p.23 New Technology Allows Maine
Organization to Create a New Material
p.24 PHA and bio-derived PE to drive
bioplastic packaging market to 2020:
study
p.25 It‘s Easy Being Green: Bioplastic-tastic
p.26 Coca Cola, DuPont, Kellogg's and Others
Establish a Trade Organization for
Sustainable Packaging
(Table of Contents continued on next page)
Starch Italics
Starch Industry Overview
Feb/Mar 2011
TABLE OF CONTENTS
June/July 2010 © GIRACT 2010
GLOSSARY
bio ‗000 000 000
cpd cases per day
crore ‗0 000 000
JV Joint Venture
k ‗000
kt ‗000 tons
klpd kilo litres per
day
lakh ‗00 000
lpd litres per day
mio ‗000 000
M&A Merger
&Acquisition
pa per annum
t tons
tpa tons per annum
tpd tons per day
tph tons per hour
tpm tons per month
GIRACT Global Starch and Starch Derivatives study
Giract has just published new multi-
client research into global starch
supply, examining in particular the
impact of the recent economic
downturn on the industry. Details on
the following page.
Regional Language News
China
p.27 The duty-paid price of U.S. corn to China
port rose slightly from 10th Feb
p.28 Corn prices rose in Jiangsu market last
week
p.29 February 24 corn early assessment: Focus
on supply worries the U.S. corn closed
higher rebound
p.30 Global corn prices rising highly and
Chinese increasing imports of Australian
feed distilled grains sharply
Russia
p.31 Production of starch in Belarus in
January-June increased by 35,8%,
products from potatoes - by 1.8%
p.32 Sheikh invests in ethanol plant
Europe
p.32 Nuplas begins construction of a plant to
produce bioplastics for packaging
p.33 Quotas on exports of maize will be
distributed at the auction
South Africa
p.33 South Africa: estimates of corn production
down
Vietnam
p.33 Floor price of rice exports increased 2.1%
to USD 490 per t
p.34 China demand boosts cassava price
GIRACT
Starches and Derivatives Impact of the economic downturn Global Production and Supply 2009/10 – 2015
INTRODUCTION The starch industry is one of the world’s largest transformers of agricultural raw material, producing 73 million tons (expressed as primary starch with 12% moisture). For 30 years the starch industry has posted a remarkable average 4% annual growth and shown great flexibility to adapt to changes and opportunities, from raw material sources and changing trade regulations to new production technologies and end-use sector dynamics.
Since 2007, this dynamic has changed abruptly for several reasons:
High demand for agricultural raw materials by the fast growing Asian economies coincided with new competition from the bio-energy boom, especially in USA, leading to a record high in raw material cost
High ingredient costs forced the food industry to undertake a strong cost-cutting drive, and even though starch and their derivatives were earlier seen as ‘low-cost’ ingredients, they have now become a target for replacement in several end-uses
Starch production in Asia continued to expand, fuelled by strong local consumption especially in China, while European players were facing more blows from the ongoing CAP reform in the sugar and potato starch sectors
The economic recession affected starch demand as never before and in almost every end-use sector; e.g. the European paper industry saw a decline by 40% and with enough new mills in low wage countries, this demand in Europe may never be recovered.
Thus, the traditional patterns in starch production and demand have changed dramatically and so did the competitive landscape. The dominant position of Western players and markets is being eroded, both in terms of product portfolios and players and China has emerged as the largest country for supply and demand of starch. Cost-effectiveness and clean labelling have been driving changes in demand.
As these new patterns are emerging, it is the right time for every player and end-user in this field to take stock of new opportunities and threats before making any strategic decisions. This report provides the necessary comprehensive picture of actual global starch production and trade, by product and area, and explores which key factors are likely to influence the future to 2015.
Giract, the ingredients and technologies specialist and leader in market analysis of starches and their derivatives, published landmark studies in ’95, ’00, ’04 and ‘07 which pulled together starch supply by type of raw material and player across the world. These studies have been a reference for all players in the industry and for key end-users. The present update, published in autumn 2010, takes into account the various changes that have occurred across the world in the last few years, and thus acts as an important tool in your strategic planning.
OBJECTIVES • To identify starch and derivative production
- by key country/region - by type of raw material - by type of starch and starch derivative - by key producer • To evaluate trade patterns of different types of starches and derivatives • To estimate availability of starches and derivatives by key country/ region and of starch by type of raw material • To forecast global trends in starches and derivatives to the year 2015
PRODUCTS Primary starch from different raw materials, including maize, wheat, potato and tapioca. Finished products as starches (native and modified) and starch derivatives (glucose syrup, high fructose syrup, dextrose, other hydrolysates and polyols)
MARKETS Global
TIMESCALE 2009/10 and 2015
REPORT Published September 2010
SUBSCRIPTION Please contact us for subscription details
For more info, contact GIRACT V. Krishnakumar, Jo Goossens
24, Pré-Colomb Tel: + 41 22 779 0500
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Feb/Mar 2011 www.giract.com Page | 1
Starch Italics Starch Industry Overview
Corn: Buying Opportunity Ahead
Corn prices continued their rally early this week,
as the grain traded at its highest level since July
2008 on Tuesday. The new high did not hold
long, though. Corn and all grains turned south
after the turmoil in the Middle East escalated. The
rise to a multiyear high can be attributed to
several factors, including inclement weather and
increased demand overseas.
In early February, the U.S. Department of
Agriculture (USDA) reported that at the end of
August 2011, when the harvest season begins, the
corn reserve will stand at 675 mio bushels—the
lowest surplus level in 15 years.
The news of low supply of corn in the U.S. sent
corn futures above USD per bushel, double the
price the grain hit six months earlier. The all-time
high on corn is USD 7.65 per bushel, struck back
in 2008 during the global top for most
commodities.
Ethanol Supports Prices
Adding to the demand dynamic are federal
mandates putting pressure on companies in the
United States to use more ethanol. Unlike Brazil,
which uses primarily sugar cane for its ethanol
production, U.S. producers create domestic
ethanol using corn.
(Continued in next column)
Corn: Buying Opportunity Ahead (Contd) As of the end of 2010, 40% of the corn supply in
the U.S. was going toward ethanol production.
And considering that the U.S. is responsible for
over half of all corn exports, it resulted in less
corn available for other countries around the
globe.
Until the government gets its hands out of the
ethanol subsidy business, oil companies will
continue to have incentives to use the biofuel—
and thus high demand for corn will remain.
In December, the government extended the
ethanol subsidies for at least one more year, and it
does not appear it will end anytime soon. So it is
expected that the corn prices will have a floor
underneath them in the coming year.
Investing In Corn
Still, even though corn took a hit this week, the
overall setup for the remainder of 2011 looks
positive, and pullbacks could be viewed as buying
opportunities. Take the Teucrium Corn ETF
(NYSE Arca: CORN), a pure-play corn fund that
holds seasonally advantaged futures contracts
across the curve.
CORN fell 6% on Tuesday, and is in danger of
dropping more in the short term as investors take
profits. Another 5 to 10% pullback in CORN will
put it in the USD 38/share area.
The iPath Dow Jones Grains ETN (NYSE Arca:
JJG), whose index is weighted in corn (37%),
soybeans (39%) and wheat (24%), also fell 6% on
Tuesday. The ETN is now 9% off its high set
earlier in the month. (hardassetsinvestor.com 25
February 2011)
Crops and grains
Feb/Mar 2011 www.giract.com Page | 2
Starch Italics Starch Industry Overview
Corn reaches 2 1/2 year high on supply fears Supply concerns showed U.S. corn futures to
highs not seen since mid-2008 Tuesday.
Nearby corn for March delivery rose 4 3/4 cents,
or 0.7%, to USD 7.27 1/4 a bushel at the Chicago
Board of Trade, the highest close for a
front-month contract since July 3, 2008. Corn for
May delivery was the most-active contract since it
gained 4 1/2 cents, or 0.6%, to USD 7.35 1/2.
Futures could continue rising as users of the grain
remain worried about supplies, which are
projected to come in at a 15-year low at the end of
the crop's marketing year on August 31, analysts
said. Prices have rallied recently in an attempt to
curb strong demand and entice farmers to expand
plantings to replenish inventories.
Farmers are expected to increase corn plantings
4.3% to 92 mio acres this spring due to high
prices, according to an estimate issued last week
at the U.S. Department of Agriculture's annual
outlook conference. Yet poor weather could derail
attempts to harvest a large crop next fall.
"With the tightness of the supply/usage sheet for
this year, we could probably see some higher
prices into June and July," said Sean McGillivray,
Vice President of Great Pacific Trading Co., a
commodities brokerage firm in Oregon.
Futures felt additional support from rallying crude
oil prices, as ethanol is made from corn, and from
fund buying at the beginning of the month, traders
said. Commodity funds bought an estimated 5 000
contracts in light trading, a modest amount, after
selling contracts in early dealings. "It looks like
corn, especially with crude activity like it is,
should be really well supported until we get a
major change in acres or crude oil prices," said
Brian Hoops, President of Midwest Market
Solutions.
(Continued in next column)
Corn reaches 2 1/2 year high on supply fears (Contd)
The USDA will issue its next update on plantings
March 31. In other markets, ethanol futures closed
at a 31-month high. Ethanol for May delivery rose
1.6 cents, or 0.6%, to USD 2.582 per gallon at the
CBOT. Oat futures advanced as the market
continued to recover from a fall to a nearly
12-week low last week. Oats for May delivery
jumped 8 1/2 cents, or 2.2%, to USD 3.89, 1/2 a
bushel. (agriculture.com 1 March 2011)
Overfertilizing corn undermines ethanol
When growing corn crops for ethanol, more
means less. A team of researchers from Michigan
State University and Rice University shows how
farmers can save money on fertilizer while they
improve their production of feedstock for ethanol
and alleviate damage to the environment.
The research has implications for an industry that
has grown dramatically in recent years to satisfy
America's need for energy while trying to cut the
nation's reliance on fossil fuels, according to
Sieglinde Snapp, a crop and soil scientist at
MSU‘s Kellogg Biological Station. ―In an era of
increasing reliance on corn production for food
and fuel, it is important to quantify the full impact
of corn nitrogen management on the environment
and on the crop biochemistry,‖ she said.
(Continued on next page)
Crops and grains
Feb/Mar 2011 www.giract.com Page | 3
Starch Italics Starch Industry Overview
Overfertilizing corn undermines ethanol (Contd)
The team discovered that corn grain, one source
of ethanol, and the stalks and leaves, the source of
cellulosic ethanol, respond differently to nitrogen
fertilization.
The researchers found that liberal use of nitrogen
fertilizer to maximize grain yields from corn
crops results in only marginally more usable
cellulose from leaves and stems. And when the
grain is used for food and the cellulose is
processed for biofuel, pumping up the rate of
nitrogen fertilization actually makes it more
difficult to extract ethanol from corn leaves and
stems.
This happens, they discovered, because surplus
nitrogen fertilizer speeds up the biochemical
pathway that produces lignin, a molecule that
must be removed before cellulosic ethanol can be
produced from corn stems and leaves.
The findings are an important next step in
building a sustainable biofuel economy. While
farmers have a clear incentive to maximize grain
yields, the research shows a path to even greater
benefits when corn residues are harvested for
cellulosic ethanol production.
Overfertilization also increases the
decomposability of corn residue plowed back into
the fields. This implies that soil carbon storage
becomes less efficient – another minus for the
environment because storing additional carbon in
soil can reduce the atmospheric concentration of
carbon dioxide and help crops access soil water.
The research was supported in part by the
National Science Foundation and MSU‘s
AgBioResearch. (news.msu.edu 28 February
2011)
Farmers harvest 56kt of corn residue for POET Emmetsburg cellulosic ethanol project
Farmers are now delivering biomass bales to
POET's 22-acre storage site in Emmetsburg, Iowa,
the future home of the 25 mio-gallon-per-year
cellulosic ethanol plant dubbed "Project Liberty."
Area farmers harvested 56kt of corn cobs, leaves,
husks and some stalk this fall but had been
waiting to deliver the biomass to POET while
guidelines for the U.S. Department of
Agriculture's Biomass Crop Assistance Program
(BCAP) were finalized. Farmers on Monday
began completing the application process, and
they started delivering bales soon after.
"While we shared the farmers' frustration with
delays to BCAP, we are happy to see that the
program is being implemented and farmers are
now delivering biomass to POET," Project
Liberty Director Jim Sturdevant said. "I know
they are eager to deliver their bales, just as we are
eager to validate our receiving and handling
procedures at the new biomass stackyard.
"BCAP is important to helping these first farmers
get the new biomass market off the ground.
BCAP's inclusion in the next Farm Bill is an
important part of continuing to develop this
market."BCAP is a USDA program that provides
matching funds of up to USD 45 per t to an
individual farmer for a maximum two years. It is
meant to offset startup costs for developing the
feedstock market for cellulosic ethanol and other
alternative energy endeavors.
Bales this year will be used primarily to test
procedures for delivery, receiving, quality
assurance, storage and handling at the stackyard.
When operational, Project Liberty will use about
300kt of biomass annually to produce ethanol.
(agrimarketing.com 1 February 2011)
Crops and grains
Feb/Mar 2011 www.giract.com Page | 4
Starch Italics Starch Industry Overview
The Agriculture Department has cleared the way
for farmers to plant corn that is genetically
modified to produce alpha-amylase, an enzyme
that rapidly breaks down starch into sugar. The
February 11 decision—denounced by
environmental groups--marks the first U.S.
approval of a biotech crop designed specifically
for boosting ethanol production. Corn seed with
the amylase trait will be sold by Syngenta under
the name Enogen.
The seed "provides U.S. ethanol producers with a
proven means to generate more gallons of ethanol
from their existing facilities," says Davor Pisk,
Syngenta's Chief Operating Officer.
Syngenta first asked USDA for approval of the
seed in 2005. Since then USDA's Animal & Plant
Health Inspection Service (APHIS) has
conducted both environmental and plant pest risk
assessments. On the basis of those assessments,
APHIS concluded that this line of corn "should
no longer be subject to regulation," says
Michael Gregoire, Deputy Administrator for
APHIS' biotechnology regulatory services.
Grain millers and food manufacturers, however,
are concerned that the amylase trait will escape
from Enogen crops and inevitably comingle with
corn intended for human consumption.
(Continued in next column)
Ethanol Corn Approved (Contd)
Although FDA deemed the amylase trait safe for
use in food in 2007, the groups are worried that it
will affect the quality and shelf-life of processed
foods containing corn.
If the amylase trait enters the food processing
stream, it will damage the quality of breakfast
cereals, snack foods, and battered products, says
the North American Millers' Association, an
industry group.
Industry data show that just one corn kernel with
the trait in 10 000 is enough to affect viscosity in
food processes, according to the Union of
Concerned Scientists (UCS). "Contamination
could cause corn snack food to be too fluffy to fit
in a standard bag, corn batter to be too thin to
coat corn dogs, and corn bread to be too soggy in
the middle," the group says.
Syngenta plans to work with a limited number of
ethanol plants and corn growers this year, and the
company is preparing for large-scale commercial
planting of Enogen corn in 2012. The company
says it will manage the production of Enogen
corn "using a contracted, closed production
system.
"There is no way to protect food corn crops from
contamination by ethanol corn. Even with the
most stringent precautions, the wind will blow
and standards will slip," stresses
Margaret Mellon, Director of UCS's Food &
Environment Program. That mandate, known as
the Renewable Fuel Standard, requires the
consumption of 36 bio gallons of ethanol by
2022.
Corn ethanol is expected to supply about 15 bio
gallons of that demand, according to FOE
(pubs.acs.org 15 February 2011)
Ethanol Corn Approved
Crops and grains
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Starch Italics Starch Industry Overview
Huge demand for corn boosting food prices
The cost of corn is rising, and because it's the
hidden ingredient in much of our food –
everything from pop drinks to margarine -- that
means your grocery bills could rise too. The
U.S. Department of Agriculture warns that corn
supplies are at their tightest levels in 15 years.
The situation has been compounded by
government incentives to boost corn-based
ethanol production. Kerry Klassen, a commodities
analyst, says it could take several years for the
U.S. to replenish its stocks.
"If we look at a long-term average price, I think
we're going to be above the five-year average for
the next crop year as well," he said.
Michael Seery, an analyst with Seery Futures,
says world corn prices have also been driven up
because China, with its population of 1.3 bio
people, is stockpiling food staples.
"They keep buying corn," he said. "They're
rationing it; they want it. They're afraid of higher
prices, so even a USD 7 bushel, which is right
now at its all-time high."
Some grocery stores have been told to expect that
food prices could rise up to 10% in the coming
weeks -- all because the world's demand for corn
is exceeding supply.
The impact of corn prices is widespread. Since
corn is used to feed cattle, that means meat prices
are also rising. "Right now, there are record prices
on commodities like corn that will put upward
pressure on prices, but time will tell if this is a
temporary trend or a long-term trend," he said.
The situation has become serious enough that
French President Nicolas Sarkozy wants corn
prices on the agenda for this weekend's G20
summit in Paris. (ctv.ca 14 February 2011)
Readers misinformed regarding high-fructose corn syrup
The Corn Refiners Association petitioned the U.S.
Food and Drug Administration (FDA), asking that
manufacturers have the option of using "corn
sugar" as an alternate ingredient name for
high-fructose corn syrup on product labels,
because "corn sugar" more accurately describes
the composition of the ingredient.
The CRA wants to clear up consumer confusion
about high-fructose corn syrup by requesting that
the FDA give food and beverage manufacturers
approval to call high-fructose corn syrup what it
is: corn sugar.
Consumers want to know what is in their foods
and to have ingredient names that are clearly
understood. "Corn sugar" accomplishes these
objectives succinctly and simply. Most
importantly, the term "corn sugar" enables
consumers to readily identify added sugars in the
diet.
High-fructose corn syrup is made from corn, a
natural grain product. High-fructose corn syrup
contains no artificial or synthetic ingredients or
color additives and meets the U.S. Food and Drug
Administration's requirements for use of the term
"natural."
As many dietitians agree, all sugars should be
consumed in moderation as part of a balanced
lifestyle. (utdailybeacon.com 03 February 2011)
Crops and grains Starch and derivatives
Feb/Mar 2011 www.giract.com Page | 6
Starch Italics Starch Industry Overview
Archer Daniels Midland: Corn Sweetener Prices to Jump 25%; Strong Mexico Demand
Archer Daniel Midland Co. (ADM) has finalized
contracts for corn sweetener shipments in 2011,
and will see prices jump 25%, Chief Financial
Officer Ray Young said. That increase will be
sufficient to raise margins for its corn sweetener
operations, despite the rising cost of corn, Young
said in a conference call. Corn, along with other
agricultural commodities, have soared in recent
months and are at their highest level since
reaching record highs in 2008.
The contracts represent 50 to 60% of its corn
sweetener shipments, the company said. Despite a
well-publicized backlash among some consumers
against high fructose corn syrup in the
United States, demand has remained strong in
Mexico. Young said corn sweetener shipments of
1.5 mio t were up 90% in 2010, and will remain
strong. In some cases, Mexico is importing high
fructose corn syrup and shipping higher-priced
sugar back to the United States.
The company will also continue to benefit from
strong ethanol demand, Young said, although
production margins have slid close to break-even
recently. High sugar prices are making U.S.
ethanol exports attractive, Young said, and
exports will continue to grow in 2011.
ADM reported a 29% jump in second quarter
earnings, due in part to ethanol margins and
favorable corn positions. Soybean prices have
also surged due to tight supplies and surging
China demand, but Young said the outlook for the
South American soybean harvest has improved
recently due to better weather.
The company's stock was recently up 6.76% to
USD 34.88 a share. (automatedtrader.net 01
February 2011)
Govt releases 18.39 lakh t sugar for Feb'11- India
For February 2011, the government has released
18.39 lakh t of sugar for sale through the open
market and ration shops and this is more than
enough to meet the internal demand of sugar for
the month.
The government had released 19.18 lakh t of
sugar for January, 2011. Meanwhile, about
2.16 lakh t of sugar will be used for the supply
through ration shops and 16.23 lakh t will be used
in the open market, out of the total allotment for
February.
Every month, the ministry of food sets the
proportion of sugar that is to be released in the
open market and ration shops. It guides the mills
to sell the complete non-levy quota during the
same month.
Moreover, from February 2009, in order to reduce
the scarcity in the availability of sugar and control
increasing prices, the centre had permitted
duty-free import of raw and refined sugar.
The country has imported 6 mio t of sugar since
2010 while the prices have declined by about 40%
in the past 1 year and are now at INR 30 to 31 per
kg in Delhi retail markets.
Sugar is a term for a class of edible crystalline
carbohydrates, mainly sucrose, lactose, and
fructose characterized by a sweet flavor.
In food, sugar almost exclusively refers to
sucrose, which primarily comes from sugar cane
and sugar beet. Other sugars are used in industrial
food preparation, but are usually known by more
specific names-glucose, fructose or fruit sugar,
high fructose corn syrup, etc.
Currently, Brazil has the highest per capita
production of sugar. (money.oneindia.in 01
February 2011)
Starch and derivatives
Feb/Mar 2011 www.giract.com Page | 7
Starch Italics Starch Industry Overview
Exclusive - Sugar-squeezed Brazil buys US ethanol
The scarcity of sugar products in Brazil, the top
producer, has led the country to turn to the US for
corn-based ethanol to replenish depleted supplies
of its own cane-based alternative, Agrimoney.com
has learned. Brazil's North East region has, in an
unusual if not unprecedented move, begun
importing US ethanol to replenish supplies lost as
soaring sugar prices encouraged mills to turn cane
into sweeteners rather than biofuels.
The move defies typical industry dynamics which,
as sugar ethanol is less energy-intensive to
manufacture than America's corn-based biofuel,
typically makes Brazil's version significantly
more competitive.
"We have to convert our corn into sugar first,"
Don Roose, President of Broker US Commodities
said. However, the figures for Brazilian imports
of US ethanol stacked up, even including a trade
tariff of USD 0.54 a gallon, Mr Roose added.
Ethanol vs sugar
The clamour for sugar has increased to 44.7%,
from 42.9% in 2009-10, the proportion of cane
converted into the sweetener rather than ethanol,
the International Sugar Organization said earlier
this week.
"In a nutshell, although the final figures for both
cane production and industrial yields proved to be
lower than previously expected, this has not
affected sugar production as the decrease in cane
availability has impacted ethanol rather than sugar
output," the ISO said.
While sugar production is up by 15.1% this
season, "the growth rate for ethanol output has
been downgraded to 6.6% as against nearly 13%
projected in November".
(Continued in next column)
Exclusive - Sugar-squeezed Brazil buys US ethanol (Contd)
The financial incentive was evident in January
when, for instance, Brazilian hydrous ethanol sold
at the equivalent of 17.8 cents a pound, compared
with 45.4 cents a pound for crystal sugar.
"The premium of sugar over ethanol prices
throughout the season incentivised mills to
allocate as much cane juice as possible towards
sugar production," merchant Czarnikow said on
Tuesday. For the US, ethanol exports even to
Brazil looked a supportive factor, showing there is
a "world market out there" for the corn-based
version, Mr Roose said.
However, expectations that Brazil might switch
more cane into ethanol production, given higher
oil prices, were attributed with sparking a 3.7%
rise to 30.35 cents a pound in raw sugar, for May
delivery, in late deals in New York. White sugar
for May closed up 3.7% at USD 760.5 per t in
London. "Sugar is tight, and will remain tight for
the coming quarter until Brazil begins its harvest,"
Nick Penney at Sucden Financial said.
(agrimoney.com 02 March 2011)
GIRACT Sweeteners & Starch Price Monitoring
Giract provides quarterly prices of white sugar,
key starches and their principal derivatives used
in the food industry across major regions. The
report comprises tables and commentary on
price movements as well as charts which track
annual running price series. Details on the
following page.
Starch and derivatives
GIRACT
Sweeteners & Starch Price Monitoring Quarterly Price Review of Starches, their derivatives and Sugar in Key World Markets Now in its 11th successful year ! Giract provides quarterly prices of white sugar, key starches and their principal derivatives used in the food industry across major countries. This report comprises tables and commentary on price movements. In addition, charts track annual running price series. Why should you subscribe to this Price Monitoring? Because you are closely involved with these products and often find it difficult - or impossible - to obtain ex-manufacturer price estimates on a comparative scale across countries Because this is an efficient mechanism to remain abreast of developments Because this monitoring programme has been endorsed by key industry players including ADM, Avebe, BASF, Cargill, CPI, Danisco, GEA, Grain Processing, Lyckeby, Novartis, Novidon, Unilever, … Because Giract is well-known for its in-depth analyses of the world starch and sugar industries over the last 30 years. What does this Price Monitoring contain? Compact tables which provide ex-factory prices in local currency and USD for the key products and countries as shown below (relevant raw materials for each country), along with charts tracking price trends.
Glucose syrup HFS Native Starch Cationic Modified White DE<20 DE 63-65 DE 40-42 42% Maize Wheat Potato Tapioca Starch*
Starch
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Feb/Mar 2011 www.giract.com Page | 8
Starch Italics Starch Industry Overview
Strong ethanol performance part of ADM's profitable Q2
Archer Daniels Midland Co. reported record
quarterly segment operating profit of USD 1.4 bio
for the quarter that ended December 31. That‘s an
increase of USD 392 mio from the same time
period one year ago. ―The ADM team delivered
outstanding performance across the board,
resulting in record operating profit,‖ said
Patricia Woertz, ADM Chairman and CEO.
Corn processing profits were a positive part of
that picture. During the company‘s quarterly call
held February 1 it reported that operating profit
increased by USD 109 mio to a total profit of
USD 399 mio. The company‘s two new dry mill
ethanol plants in Columbus, Neb., and Cedar
Rapids, Iowa, became operational in 2010 and, as
a result, the company‘s corn processing volumes
were up 24%.
ADM‘s plants produce ethanol and other products
from corn, such as sweeteners, depending on
profit margins. ―We like the long term future of
ethanol, that is not only why we put these plants
in place but why we continue to run the size of
our wet corn milling business the way we do,‖
Woertz said.
The company‘s profits in the bioproducts division
of corn processing increased a total of
USD 161 mio to USD 280 mio. Improved ethanol
margins and volumes were a part of that, the
company said, as well as stronger lysine margins.
Ray Young, Senior Vice President, cited the
one-year extension of the volumetric ethanol
excise tax through 2011 and the U.S. EPA‘s
approval of E15 for 2001 and newer vehicles as
positive developments for ethanol. U.S. exports of
ethanol were also up in 2010, which helped
supported demand, and the company expects that
will continue in 2011.
(Continued in next column)
Strong ethanol performance part of ADM's profitable Q2 (Contd)
The company is supportive of E15, Woertz added,
but said it will take a while to see higher levels of
ethanol at retail pumps. ―I think it‘s a slow go,‖
she said. Vice Chairman John Rice had a positive
outlook on ethanol in 2011. He pointed out that at
current prices ethanol is still 10 to 20 cents below
gasoline, even without factoring VEETC. ―People
are still going to blend as much as they can,‖ he
said. (ethanolproducer.com 02 February 2011)
Corn price, delays, operational issues contribute to bankruptcy
First United Ethanol LLC announced February 2
that its wholly-owned subsidiary, Southwest
Georgia Ethanol LLC, has filed for Chapter 11
bankruptcy protection. ―We are using this Chapter
11 filing as a tool to recognize and protect the
value of our business for the long term,‖ said
Murray Campbell, CEO of FUEL, which will
continue to manage the plant and doesn‘t plan to
file for Chapter 11.
According to documents filed in U.S. Bankruptcy
Court in the Middle District of Georgia, Albany
Division, consolidated financial statements show
revenue of USD 168 mio for the fiscal year
ending September 30. As of December 31, the
company had assets of about USD 164 mio and
liabilities of USD 134 mio.
The Chapter 11 filing came about due to liquidity
constraints that resulted from operational
problems that have now been largely resolved, the
company said.
The company also pointed to financial difficulties
caused by increased corn prices and delivery
delays. Corn is purchased from local corn
producers when it is competitively priced but the
majority is delivered via rail car from the
Midwest.
(Continued on next page)
Company News
Feb/Mar 2011 www.giract.com Page | 9
Starch Italics Starch Industry Overview
Corn price, delays, operational issues contribute to bankruptcy (Contd) In 2010 there were many instances of rail car
delays that prompted the company to purchase
corn from local vendors at a substantial premium
so it could keep operating. However, the company
didn‘t meet working capital deficit thresholds set
in those agreements and has been assessed penalty
fees of about USD 1.3 mio per quarter, which has
been charged to interest. The company also owes
other companies, including about USD 3 mio to
Fagen Inc., the design-build company.
The ethanol plant has roots that go back to 2005,
when the Mitchell County Research Group LLC
formed and funded a feasibility study. Several
months later a board was formed and the name
was changed to First United Ethanol LLC.
Construction began in the spring of 2007 with
costs projected to be USD 185 mio to build the
plant. An equity offering in 2007 bought in
USD 74 mio from more than 800 investors.
(ethanolproducer.com 02 February 2011)
Cargill to build new Brazilian corn processing plant for starches and sweeteners Cargill has said it intends to build a new corn
processing plant in Brazil to produce starches and
sweeteners, to keep up with rising demand from
customers in the region.
(Continued in next column)
Cargill to build new Brazilian corn processing plant for starches and sweeteners (Contd) The Brazilian economy is in the midst of a period
of rapid growth, with rising GDP and increasing
investment from developed economies. Levels of
disposable income have also risen for many
Brazilians, leading to increased demand for food
and beverage products and investment
opportunities for multinationals.
Cargill‘s new plant is expected to cost around
USD 210 mio and add 30% to the company‘s corn
processing capacity in South America, the
company said. The location of the new plant is
still under consideration, and a decision about
where the plant will be located is expected in the
first quarter of this year, with operation due to
begin in 2013.
Leader of the company‘s South America starches
and sweeteners business Gonzalo Petschen said:
―The partnership with our customers and rising
domestic demand were key aspects that drove our
investment. Cargill‘s global leadership team sees
with great optimism the growth of business in
Brazil.‖
Cargill added that the new plant may also have a
line devoted to other corn-based food and
industrial ingredients using its proprietary
technologies, some of which it claims previously
have not been available on the Brazilian market.
However, the company remains tight-lipped about
what these other ingredients may be.
Cargill has made a number of investments in
Brazil in the past year. It completed 70%
expansion of the capacity of its starches and
sweeteners plant in Uberlandia, Minas Gerais in
March 2010, and also agreed to buy Unilever‘s
Brazilian tomato sauce and paste business in
September for about USD 360 mio).
(foodnavigator-usa.com 02 February 2011)
Company News
Feb/Mar 2011 www.giract.com Page | 10
Starch Italics Starch Industry Overview
Cargill purchases Tate & Lyle plant
Cargill announced today that it has purchased
Tate & Lyle's corn wet mill ethanol plant in Fort
Dodge for USD 57 mio. The announcement
breathes new life into a facility that has been
officially shuttered for more than two years.
The mill will be operational within 18 to
24 months, said Cargill spokeswoman
Nicole Reichert. When functional, the plant will
employ at least 100 or more full-time workers.
Reichert said wages will "be competitive with
similar jobs in the area." She declined to name
specific figures. Under the Tate & Lyle banner,
the plant was expected to produce
100 mio gallons of ethanol per year
According to Reichert, Cargill expects to product
115 mio gallons per year, using 150 000 bushels
of corn daily.
"We're going to make some modifications to the
facility to increase efficiency," she said.
"We believe that a highly efficient, well-located
corn wet mill ethanol plant fits well into our
bio-product portfolio," said Alan Willits,
President of Cargill Corn Milling North America,
in a press release. "We see an opportunity in
Fort Dodge to replicate the success we have had
at our Blair, Neb., and Eddyville, Iowa,
biorefinery campuses." (messengernews.net 31
March 2011)
Global Sweeteners’ revenue and gross profit surged by 25.7% and 23.1% driven by increased product price
Global Sweeteners Holdings Limited together
with its subsidiaries reported a 25.7% and 23.1%
year-on-year growth in its consolidated revenue
and gross profit to approximately HKD 3 356 mio
and HKD 378 mio respectively for the year ended
31 December 2010. Net profit attributable to
shareholders for the year 2010 increased by 3.5%
to approximately HKD 89 mio.
During the year, the sales volume of upstream
products was similar to 2009's, but the price of
corn starch rocketed by 32.2%. As a result, the
revenue and gross profit of upstream products for
the year were HKD 1 224 mio and HKD 127 mio
respectively. Although the average purchasing
price of corn kernel, the principal raw material of
the Group surged by 21.2% in 2010, the Group
was able to leverage the upsurge of corn starch
price to sustain a slight increase in the gross profit
margin of its upstream products during the year
2010.
Among the Group's downstream sweetener
products, the revenue of corn syrup and corn
syrup solid during the year were approximately
HKD 1 239 mio and HKD 727 mio respectively.
The increase in revenue of corn syrup products
was mainly attributable to the increase in sales
volume and selling prices. During the year, the
utilisation rate of the glucose/maltose production
facility in Jinzhou increased, while internal
consumption of glucose syrup for downstream
production reduced. As a result, the sales volume
of both glucose syrup and maltose syrup increased
to approximately 246kt (2009: 178kt) and 244kt
(2009: 225kt) respectively during the year 2010.
(Continued on next page)
Company News
Feb/Mar 2011 www.giract.com Page | 11
Starch Italics Starch Industry Overview
Global Sweeteners’ revenue and gross profit surged by 25.7% and 23.1% driven by increased product price (Contd)
Supported by a 16.8% and 25% increase in the
selling prices of glucose syrup and maltose syrup
respectively, the revenue of glucose syrup and
maltose syrup rose to HKD 561 mio and
HKD 678 mio respectively (2009: HKD 347 mio
and HKD 500 mio respectively).
The revenue of maltodextrin increased by
approximately 80.9% year on year to
HKD 356 mio due to increase in the selling price
and sales volume of 25.5% and 44.1%
respectively to approximately HKD 3 100 per t
and 113kt respectively. Revenue of crystallised
glucose dropped by 22.7% to approximately
HKD 371 mio during the year as compared to that
of the previous year, as a result of 43.6% decrease
in sales volume to approximately 168kt
(2009: 298kt). However, increase in the selling
price had contributed to improved gross profit
margins of both crystallised glucose and
maltodextrin for the year.
During the year, the Group continued its effort in
developing its overseas markets. The Group's
export volume of upstream corn refined products
and corn sweeteners for the year were
approximately 45kt (2009: 46kt) and 41kt (2009:
15kt) respectively, while the respective export
sales amounted to approximately HKD 102 mio
and HKD 137 mio respectively, representing
27.5% and 211.4% increases from those of the
previous year.
Going forward, the Group will continue to secure
the supply of corn kernel at the lowest cost
through better utilisation of its current corn
storage facilities and a more comprehensive corn
procurement policy and network.
(Continued in next column)
Global Sweeteners’ revenue and gross profit surged by 25.7% and 23.1% driven by increased product price (Contd)
To cope with the downstream production needs,
the Group plans to expand the corn processing
capacity in existing Jinzhou corn refinery by
300kt per annum. Construction of this corn
processing facility is scheduled to commence in
the second quarter of 2011 and is expected to be
completed by the fourth quarter of 2011.
In view of economic recovery and improved
market sentiment, the Group intends to expand its
downstream production. The Group plans to add a
new HFCS (high fructose corn syrup)
55 production line of 60ktpa capacity in Shanghai
to cope with the huge demand growth from food
and beverage manufacturers in the region. Apart
from this, the Group has also planned to resume
the projects in Jinzhou which include a new
crystallised glucose production facility of
100ktpa, a maltodextrin production facility of
40ktpa and a new HFCS 55 production facility of
100ktpa. The expansion plans of the Group will
be principally financed by its internal resources
and bank borrowings.
"Sugar price in China has been rebounding from
rock bottom since 2009 and current sugar price is
nearly three times its lowest in 2008. The
persistently high sugar price creates a favourable
environment for the Group's sweeteners products,
especially for crystallised glucose and HFCS 55.
We see beverage producers are more inclined to
switch from cane sugar to corn sweeteners now.
We believe these new expansion plans will
increase the Group's overall flexibility in
adjusting its product mix in response to market
needs and enable the Group to fully capture the
opportunities we see in times of high sugar price,"
Mr Kong Zhanpeng, Chairman of Global
Sweeteners said.
(Continued on next page)
Company News
Feb/Mar 2011 www.giract.com Page | 12
Starch Italics Starch Industry Overview
Global Sweeteners’ revenue and gross profit surged by 25.7% and 23.1% driven by increased product price (Contd)
He added: "On the other hand, we believe the
upsurge of corn price in China is another issue
that the Company needs to pay attention to. That
is why we intend to raise our upstream capacity
by 50% this year to secure raw material supply. I
believe this move will put us in a better position
to respond to market changes."
"With respect to business diversification, the
Group has launched retail packaged sweeteners
products and beef products, which are currently
sold directly to consumers via nationwide
supermarket chains in the PRC. The Group will
continue to diversify its retail product range in
future through launching new products," Mr Kong
remarked. (todayir.com 29 March 2011)
Nebraska's first ethanol plant reaches milestone
Chief Ethanol Fuels, the state‘s first commercial
ethanol manufacturer, shipped the 1-billionth
gallon produced at its Hastings plant in
mid-February. One of the first fuel ethanol plants
in the U.S., Chief opened in 1984 with the
capacity to produce 10 mio gallons annually. This
year, it is expected to produce nearly 70 mio
gallons. According to Hanson, Nebraska is home
to 25 ethanol plants that produce 2 bio gallons
annually and employ 1 300 people.
Hanson said Chief is a major grain buyer in the
state, providing a market for 25 mio bushels of
corn annually — about 80% of the crop grown in
Adams County, where the facility is located.
(Continued in next column)
Nebraska's first ethanol plant reaches milestone (Contd)
In addition to fuel ethanol, he said the plant also
markets high-protein distillers grains to local
livestock feeders. More than one-third of the corn
processed in the plant is returned to the feed
sector in the form of distillers grain.
―Chief Ethanol Fuels continues to invest capital,
create jobs and add value to Nebraska agricultural
products and the economy. Nebraska is fortunate
to host a portfolio of ethanol-producing plants that
continue to stimulate the economy and stabilize
our supply of renewable transportation fuels,‖
said Todd Sneller, administrator of the Nebraska
Ethanol Board. (theindependent.com 25 February
2011)
Microbiologists aim to optimize bio-ethanol production
Food versus fuel -- this rivalry is gaining
significance against a backdrop of increasingly
scarce farmland and a concurrent trend towards
the use of bio-fuels. Researchers at the
Technische Universitaet Muenchen (TUM) are
helping to resolve this rivalry: They are working
to effectively utilize residual field crop material -
- which has been difficult to use thus far -- for the
industrial production of bio-ethanol.
They took a closer look at bacteria that transform
cellulose into sugar, thereby increasing the
energy yield from plants utilized. If this approach
works, both bread and bio-fuel could come from
the same harvest in the future.
The age of diesel and gasoline is approaching its
inevitable end. However, one of the alternatives,
bio-ethanol made from plant material by way of
microorganism fermentation, is under attack.
Until now, bio-ethanol has been produced from
crops such as wheat, sugar cane or corn, or more
accurately, from the sugar these crops contain in
the form of starch. (Continued on next page)
Bio-Fuels Company News
Feb/Mar 2011 www.giract.com Page | 13
Starch Italics Starch Industry Overview
Microbiologists aim to optimize bio-ethanol production (Contd)
However, when field crops are used for the
production of bio-ethanol, they are no longer
available as food. Researchers at the TUM
Department of Microbiology are working on a
solution to this dilemma.
The idea: Make the sugar stored in the stems and
leaves of plants in the form of cellulose available
for bio-ethanol production. "It is our goal to take
the cellulose, which has so far hardly been used,
and turn it into sugar on an industrial scale,
which can then be processed to bio-ethanol," says
microbiologist Dr. Wolfgang Schwarz.
"We are now optimizing the most effective
combinations for industrial use. Our ultimate goal
is to develop a specialized degradation tool for
every individual plant waste material containing
cellulose. With a bit of luck we will find the
perfect enzyme mixtures, which can then become
established in bio-ethanol production facilities.
"With this research program the TUM scientists
are in sync with current industrial trends.
Süd-Chemie AG is building a pilot plant in
Straubing to convert the biogenic residual product
straw into ethanol. (bioenergy.checkbiotech.org
09 February 2011)
Limiting Ethanol Production
It is no secret that increased production of ethanol
for fuel has driven up the price of food, and
anything else made from corn, on a global level.
Today, almost a third of the corn crop in the
United States is being used in ethanol production
for fuel. What most consumers don‘t realize is
that one gallon of ethanol is about 65% as
efficient as one gallon of gasoline. It also costs
more to produce.
(Continued in next column)
Limiting Ethanol Production (Contd) Thus, the price of food is being driven up for the
sake of less efficient, more expensive fuel. In fact,
one recent study done by UC Berkeley
Geoengineering Professor Tad W. Patzek found
that ethanol is one of the worst renewable fuel
solutions, and confirmed that a staggering six
times more fossil energy is used to produce
ethanol than is released by it.
If we rewind just three years, back to 2008, you
will recall that the then new ethanol mandate was
responsible for driving food prices up by as much
as 50%, even leading to riots in several foreign
countries. And now, just a short time afterward,
the ethanol movement is still gaining momentum.
In fact, 15% ethanol gasoline is being talked
about right now and could very well become the
new standard soon. This can only lead to more
corn being used to produce ethanol and the price
of other good going up because of it.
Last year alone, more than 20% of the
United States‘ corn crop was used for ethanol
production, and it only offset 1% of the country‘s
oil use. Obviously, focusing efforts on new power
technology and electric vehicles is a better way to
go. In fact, almost any way is a better way to go!
The answer to easing the current food price spike
is to stop using all of our corn for ethanol, plain
and simple. (newsgrape.com 04 March 2011)
Storms, seasonal demand impact ethanol markets
Max Thomasson, commodity sales and operations
manager for CHS Inc.‘s renewable fuels division,
said the recent series of winter storms that has
battered areas of the Northeast and Central
Midwest has affected ethanol demand, which unfortunately is coinciding with the lowest
seasonal demand time of the year.
(Continued on next page)
Bio-Fuels
Feb/Mar 2011 www.giract.com Page | 14
Starch Italics Starch Industry Overview
Storms, seasonal demand impact ethanol markets (Contd) This has caused ethanol prices to trail corn
slightly, causing some pressure on ethanol prices
relative to corn. Chris Highsmith, Research
Analyst for Eco-Energy Inc., also believes
weather has combined with low seasonal demand
to create less than ideal circumstances for the
ethanol market. ―That trend, with seasonal
gasoline demand down and ethanol production up,
is generally not a good combination for ethanol
margins for plants,‖ Highsmith said.
Rising oil prices will affect the ethanol market,
but not has severely as some may speculate,
according to the analysts. Highsmith said upward
pressure on crude prices will boost RBOB prices,
which in turn will increase the spread between
RBOB and ethanol. ―If nothing else, it‘s giving
ethanol room to move up and still retain some
margins for the people blending it,‖ he said.
But Thomasson said if increased per-barrel prices
inflate the price at the pump too much, it could be
a detriment to the ethanol market. ―I don‘t see a
huge run up in prices affecting ethanol other than
adversely,‖ he said.
Internationally, there continues to be demand for
exports to Europe, but sustainability requirements
are making it difficult for most U.S. producers to
export to the EU27, according to Thomasson. The
EU is currently only accepting fuel that has been
certified through the International Sustainability
and Carbon Certification System, a process which
includes proving the fuel was produced using
sustainable biomass.
―That‘s a big hurdle for U.S. producers because
there aren‘t many who have achieved that
certification,‖ he said, adding that he is aware of
only two U.S. producers who have received
ISCC-certification.(ethanolproducer.com 01
February 2011)
South Korean firm plans to invest USD 300 mio for ethanol plant Despite issues that continue to hound the local
ethanol industry, a South Korean firm recently
expressed to the government its intention to
revive plans for an ethanol production facility in
Luzon. Marriz B. Agbon, President of the
Philippine Agricultural Development and
Commercial Corp., told reporters that this Korean
firm, which he declined to name, has been looking
at investing USD 300 mio to construct an ethanol
facility.
Agbon said on the sidelines of a recent launching
ceremony by Green Future Innovations, that this
Korean company was among the original
proponents that wanted to put up a plant in the
Philippines. But due to the uncertainty on tariff
rates imposed on imported ethanol and on the
unclear policies regarding the uptake on locally
produced ethanol, the Korean firm decided to put
the project on hold. The interest was revived
recently given the increases in gasoline pricesand
the renewed interest shown by other investors
such as the Filipino-Japanese venture GFI, in the
local ethanol industry.
Although Agbon did not identify the firm, the
2009 Bioethanol Roadmap crafted by the Sugar
Regulatory Administration two years ago showed
Daebong LS of South Korea as among the 20
investors that initially targeted to have an ethanol
facility operational by 2012.Of these 20 investors,
only three companies have completed their
ethanol facilities namely San Carlos BioEnergy
Inc., which produces 40 mio liters a year; Leyte
Agri Corp. with 10 mio liters annually, and Roxol
Bioenergy, with 33 mio liters a year.
Their combined production can barely serve the
requirements of the local oil companies, which are
expected to increase to over 400 mio liters this
year, given the 10% mandated ethanol blending in gasoline.
(Continued on next page)
Bio-Fuels
Feb/Mar 2011 www.giract.com Page | 15
Starch Italics Starch Industry Overview
South Korean firm plans to invest USD 300 mio for ethanol plant (Contd)
Agbon further disclosed that the Korean firm‘s
planned ethanol facility, the construction of which
may start this year, may likely have the same
capacity as the plant being built by GFI. GFI
recently announced in a launching ceremony that
it was pushing through with its P6-bio bioethanol
and cogeneration facility in Isabela, which would
not only shore up supply of local ethanol but also
provide jobs to more than 15 000 Filipinos in the
rural areas.GFI president Reynaldo P. Bantug
earlier said the ethanol project, set to start
operations in the second quarter of 2012, would
generate 54 mio liters of bioethanol a year,
displacing USD 27.5 mio worth of imported fossil
fuel.
The project, which would also generate
100 000 megawatt-hours of electricity annually, is
being funded by Japan‘s Itochu Corp. and JGC
Corp., Taiwanese holding company GCO and the
local counterpart firm Philippine Bioethanol and
Energy Investments Corporation through the
special purpose vehicle company Green Future
(business.inquirer.net 01 February 2011)
Tata to invest USD 15 mio in Mozambique sugarcane ethanol project In India, Tata Chemicals said that it will make an
initial USD 15 mio investment in the biofuel
production in Mozambique originally developed
by Grown Energy. In 2009, the Mozambican
government granted 15 000 hectares in Chemba
district for a sugarcane biofuels project that would
ultimately cost USD 224 mio and produce up to
26 mio gallons (100 mio liters) of ethanol per
year. Last October, Tata Chemicals acquired
Grown Energy for USD 1.1 mio.
(biofuelsdigest.com 14 February 2011)
Ethanol fueling trip to Denmark
Voters will be the ones to decide if all the elected
officials on a trip next week to Denmark to visit a
cellulosic ethanol production facility should have
gone. Construction of a USD 300 mio plant is
supposed to begin next year, with start-up
operations set for late 2014 or early 2015. The
raw material for the ethanol will be wheat straw
and corn stover coming from a 100-mile radius
around the plant near Jamestown. It will take the
equivalent of 400kt of wheat straw annually to
supply the plant, which will use a chemical
process to create the cellulosic ethanol.
In addition to ethanol, the plant will produce
feed-grade C-5 molasses and purified lignin
pellets that can be used as fuel for a power plant.
Great River Energy has partnered with a number
of companies in developing the plant including
Inbicon, the owner-operator of the demonstration
cellulosic ethanol plant the North Dakota
delegation will visit in Denmark. Because
cellulosic ethanol is derived from woods, grasses
and non-edible parts of plants, it means less
competition with food crops, most commonly
corn, in the production of ethanol. It's considered
carbon-neutral.
There's a competition between three proposed
plants to be the first commercial-scale cellulosic
ethanol plant in the U.S. The others are in Iowa
and Nebraska. The economic model for a
cellulosic ethanol operation will be different than
that for ethanol plants already operating in North
Dakota. The key unanswered question about the
market will largely determine its economic
viability as a fuel source.
A trip to Denmark appears in order. Certainly,
having the Agriculture Department and the Bank
of North Dakota, as well as the Industrial
Commission, represented on the trip makes sense.
(bismarcktribune.com 03 March 2011)
Bio-Fuels
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Starch Italics Starch Industry Overview
Brazil Cosan Sees USD 2 bio Synergies Generated By Raizen Ethanol Venture Brazilian sugar and ethanol group Cosan Industria
e Comercio SA said Wednesday that it expects
synergies worth USD 2 bio from its ethanol joint
venture, Raizen. The USD 12 bio ethanol venture
was formed last year by Cosan and Royal Dutch
Shell. Despite still being in its infancy, the
venture will expand its production capacity over
the next five years, Cosan and Shell said. The
added output aims to meet a growing demand for
fuel at the company's 4 500 service stations across
Brazil.
Raizen will boost sugarcane-crushing capacity to
100 mio t a year from current output of 60 mio t.
Ethanol production is expected to more than
double over the next five years to 5 bio liters a
year. Raizen now produces about 2.2 bio liters
annually. Raizen represents a huge step in the
consolidation of Brazil's fractured ethanol sector,
where many of the sugarcane mills are family
owned. That's made the sector ripe for picking for
foreign investors flush with cash and a desire to
enter Brazil's biofuels segment.
Cosan and Shell's creation of Raizen was
followed by two separate deals made by Brazilian
state-run energy giant Petroleo Brasileiro, or
Petrobras. In May, Petrobras invested nearly
USD 1 bio for a 46% stake in local sugar group
Guarani, the country's fourth-largest sugar miller.
Petrobras then paid about USD 240 mio for a 49%
stake in Nova Fronteira Bioenergia SA, a joint
venture with local sugar producer Sao Martinho
SA (SMTO3.BR).
(Continued in next column)
Brazil Cosan Sees USD 2 bio Synergies Generated By Raizen Ethanol Venture (Contd)
Previously, consolidation in the Brazilian biofuels
sector had been limited to smaller deals between
rivals or investment funds. U.S. company Bunge
Ltd. (BG) in December 2009 acquired Usina
Moema Participacoes SA, which owns a Brazilian
sugarcane mill and has ownership interests in five
others. France's Louis Dreyfus Commodities in
October 2009 took control of giant sugar and
ethanol group SantelisaVale. Cosan snapped up
local milling group NovAmerica in early 2010.
(automatedtrader.net 02 March 2011)
Export of molasses, ethanol to fetch higher income
Foreign exchange earning from export of ethanol
and molasses is likely to be higher this year owing
to surging world prices and demand from
European buyers, industry sources said on
Monday. Almost all the distilleries are presently
operating at 90% capacity and are expected to
convert much larger quantity of molasses into
alcohol to meet the buyers demand.
Sources said that last year exporters earned higher
foreign exchange by exporting around 210kt of
alcohol on an average price of USD 775 to 800
per t.
(Continued on next page)
Bio-Fuels
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Starch Italics Starch Industry Overview
Export of molasses, ethanol to fetch higher income (Contd)
However, this year owing to increased demand
from the buyers, prices have moved further high
and are expected to stay at USD 800 to 1 000 per
t. Ethanol exports during 2009 stood at 180kt
fetching an average price of USD 775 per t.
However, prices are firm from the very start of the
season compared to last year and are being quoted
in the range of USD 825 to 850 with exports
touching around 2 798 t so far.
Mohammad Kasim Hashim, a leading exporter of
molasses and ethanol said prospects of exports
were good this year owing to firm world prices
for both the commodities. However, he said the
crushing of sugarcane could further last for
another 6 weeks and may come to an end by the
middle of March. Therefore, he felt that lesser
molasses would result in lesser production of
ethanol. He said undoubtedly, there was strong
demand for ethanol in the world market but
Pakistan with limited capacity owing to short cane
crop may export around 200kt to 225kt this year.
Nevertheless, he said with higher distillery
capacity the country has managed to add value to
molasses to produce ethanol and earn higher
foreign exchange. Strong demand has also led to
increase molasses prices in the world market
which are presently being quoted at around
USD 120 to 130 per t. Last year, molasses exports
stood at 290kt fetching average price of USD 110
to 112 per t. (dawn.com 08 February 2011)
Petrobras To Double Biofuels Production With Eye On Global Shipments
Brazilian state-run energy giant Petrobras will
spend USD 3.5 bio over the next four years to
more than double biofuels output, positioning the
company to take advantage of global demand for
clean, renewable sources of energy.
(Continued in next column)
Petrobras To Double Biofuels Production With Eye On Global Shipments (Contd)
―We are preparing for a global scenario in which
the demand for biofuels is expanding,‖ Miguel
Rossetto, Chief Executive of Petrobras biofuels
unit Petrobras Biocombustivel, said in an
interview. Petrobras created Petrobras
Biocombustivel in 2008 to be the platform for its
entry into Brazil‘s biofuels sector, where
sugarcane ethanol has been in use since the 1970s.
But the world‘s need to reduce carbon emissions,
including firm targets set by some countries,
means that demand for biofuels such as ethanol
and biodiesel will likely explode in coming years.
The company plans to spend USD 2.5 bio to boost
ethanol and biodiesel production, with about 80%
of the total earmarked for ethanol projects,
Rossetto said. An additional USD 1 bio will be
spent on infrastructure development, including
Petrobras‘ participation in a USD 3.3 bio ethanol
pipeline project, as well as research and
development. Ethanol production is targeted for
2.6 mio cu.m by 2014, up from output of 1 mio
cu.m in 2010. Biodiesel production, meanwhile, is
expected to climb to 750 000 cu.m in 2014, up
from 500 000 cu.m at the end of last year.
The company‘s primary focus is to meet rising
demand in Brazil, Rossetto said. Brazil not only
mandates a 25% blend of ethanol into gasoline at
the pump, the country also has a massive flex-fuel
fleet of light vehicles that can operate seamlessly
on ethanol, gasoline or any combination of the
two fuels. Demand for biofuels from the
petrochemicals sector is also growing as the
industry moves toward greater production of
so-called green plastics. Local petrochemicals
giant Braskem, in which Petrobras holds a 49%
stake, consumes about 400 000 cu.m of ethanol
per year. (gcaptain.com 12 February 2011)
(Continued on next page)
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Bug Creates Butanol Direct from Cellulose
Butanol—a promising next-generation
biofuel-packs more energy than ethanol and can
be shipped via oil pipelines. But, like ethanol,
biobutanol production is focused on using edible
feedstocks such as beets, corn starch, and
sugarcane.
Now James Liao, a biomolecular engineer at the
University of California, Los Angeles, has
developed two routes to liberate butanol from its
dependence on food crops. Liao, who has a track
record for commercializing innovative biofuels
processes, has proven that microbes can produce
the advanced biofuel directly from agricultural
wastes, as well as from protein feedstocks such as
algae.
Liao's demonstration of direct cellulose-to-butanol
conversion could bring down the cost of cellulosic
biofuels, which is currently prohibitively high.
His protein-based process provides the biofuels
field with entirely novel feedstock options.
While they're renewable, biofuels face attacks
from environmental and food activists, and
biobutanol is no exception: the first generation of
biobutanol plants under development will run on
corn-based sugar and starch.
(Continued in next column)
Bug Creates Butanol Direct from Cellulose (Contd) "Butanol has some technical benefits, but the real
problem is the amount of food that goes into
making a gallon of fuel," says Jeremy Martin, a
Senior Scientist at the Union of Concerned
Scientists, a Cambridge, Massachusetts-based
advocacy group that is part of a broad coalition
pushing Congress to end lucrative tax credits for
corn ethanol. Liao's innovations could end
biobutanol's association with corn—an association
that, ironically, is partly of his making.
In 2008, Liao developed a microbial pathway for
converting sugar into isobutanol, a high-octane
isomer of butanol.
That innovation is now being commercialized by
Gevo, an Englewood, Colorado-based startup that
Liao cofounded. Gevo raised USD 107 mio in an
IPO last month to support its plans to retrofit corn
ethanol plants to produce isobutanol instead.
Plans for a shift to biofuels production from
biomass feedstocks such as switchgrass, corn
stalks, and sugarcane bagasse (or plant residue)
are, meanwhile, moving slowly because of higher
costs. The U.S. Environmental Protection Agency
mandated use of just 6.6 mio gallons of cellulosic
ethanol this year—less than 3% of the 250-mio-
gallon goal set by Congress four years ago.
The holdup is from added processing steps
required to break down these cellulosic feedstocks
and thus generate sugars for fermentation; the
processing boosts costs considerably, making
production facilities difficult to finance. The key
was adding Liao's sugar-to-isobutanol pathway to
a microbe, Clostridium cellulolyticum, that likes
chewing on biomass but does not normally make
butanol. (laboratoryequipment.com 23 March
2011)
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Zein technology to go commercial at Illinois ethanol plant
Illinois-based technology developer Prairie Gold
Inc. and GTL Resources USA Inc. are
collaborating to produce zein protein at a
commercial-scale plant, to be constructed near
Illinois River Energy‘s 110 MMgy plant at
Rochelle, Ill. Illinois River Energy is a subsidiary
of GTL Resources.
―This unique technology has the potential to
significantly change the way we think about
ethanol production in that instead of just
producing ethanol and distillers dried grains
(DDGs), we are becoming a biorefinery capable
of producing several food, industrial and chemical
products,‖ Rich Ruebe, CEO of GTL and Illinois
River Energy, said.
Zein is a natural, corn-based polymer with a wide
variety of uses in multiple industries. It can be
used to produce biodegradable plastics, shellac
and other hard coatings and also has many
applications in the pharmaceutical and specialty
chemicals industries. Demand for the product is
growing, according to Shane, but quality and
pricing have inhibited its ability to enter the
market in high volumes.
Poet LLC is the only other ethanol producer
known to be working on zein production
technology. Its trademarked product, known as
Inviz, is produced from DDGs.
(Continued in next column)
Zein technology to go commercial at Illinois ethanol plant (Contd) Massachusetts-based Freeman Industries LLC is
the one other U.S. company currently producing
zein, according to Shane. It uses corn gluten meal
to produce zein. Prairie Gold‘s trademarked
Amazein is produced from the corn kernel.
Typical zein production begins by using ethanol
to dissolve and extract the zein protein from the
raw product which, in Prairie Gold‘s technology
is corn kernels. From there, Prairie Gold utilizes
membranes to purify the zein protein. Shane said
this method reduces energy costs and increases
the purity of the zein. Corn and ethanol used in
the process are then returned the ethanol plant for
its use.
Shane said Prairie Gold‘s process extracts one
pound of zein per bushel of corn. Ethanol and
corn are merely ―borrowed‖ from the ethanol
plant and operations at the ethanol facility are not
affected.
The market price for zein is approximately
USD 18 per pound, Shane said. By comparison,
DDGs are currently selling for 6 to 8 cents per
pound. The zein plant to be constructed at Illinois
River Energy could produce 40 mio pounds of
zein annually, he said, but declined to offer
production cost details. While the selling price is
attractive, Shane cautioned that the company is
focused on producing zein at a rate that will
maintain its status as a high-value product. ―Our
business model is to partner with ethanol plants,‖
he said.
―We do not want to flood the market with the
product, because of the many uses for it. You‘re
talking about something that goes into a very high
value market to one that‘s very low. We don‘t
want to overproduce where we‘d have to sell into
the pharmaceutical industry for a plastic industry
price.‖ (ethanolproducer.com 23 March 2011)
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Feb/Mar 2011 www.giract.com Page | 20
Starch Italics Starch Industry Overview
World starves as Americans burn food to stay on the road
Spectators at February's Daytona 500 in Florida
were handed green flags to wave in celebration of
the news that the race's stock cars now use
gasoline with 15% corn-based ethanol. It was the
start of a season-long television marketing
campaign to sell the merits of biofuel to
Americans.
The US spends about USD 6 bio a year on federal
support for ethanol production through tax credits,
tariffs, and other programs. Thanks to this
financial assistance, one-sixth of the world's corn
supply is burned in American cars; enough corn to
feed 350 mio people for an entire year.
Government support of rapid growth in biofuel
production has contributed to disarray in food
production. Indeed, as a result of policy in the US
and Europe, including aggressive production
targets, biofuel used more than 6.5% of global
grain output and 8% of the world's vegetable oil
last year, up from 2% of grain supplies and
virtually no vegetable oil in 2004.
In 2007 and 2008, the swift increase in biofuel
production caused a food crisis that incited
political instability and fuelled malnutrition.
Developed countries did not learn. Since 2008, ethanol production has increased by 33%.
Biofuels were initially championed by
environmental campaigners as a silver bullet
against global warming. They started to change
their minds as research showed that biofuels from
most food crops did not significantly reduce
greenhouse gas emissions - and in many cases,
caused forests to be destroyed to grow more food,
creating more net carbon-dioxide emissions than
fossil fuels. Some green activists supported
mandates for biofuel, hoping they would pave the
way for next-generation ethanol using non-food
plants. That hasn't happened.(theaustralian.com.au
21 March 2011)
Corn-based fuel still a target on national stage
Some people have placed a bull‘s-eye on ethanol
fuel made from corn.
U.S. Sen. Dianne Feinstein, D-Calif., wants to
repeal the 45 cents-per-gallon credit earned by
refiners and fuel blenders for ethanol purchased
and mixed into gasoline. Congressional bill S530
would leave the incentive intact for
next-generation advanced biofuels not made from
corn, according to The Hill, a Congressional
newspaper (thehill.com).
U.S. Sen. Tom Coburn, R-Okla., and U.S. Sen.
Ben Cardin, D-Md., said repealing the blenders
credit would reduce America‘s annual budget by
USD 6 bio (ethanolproducer.com).
Branstad said - ―If we can go from 10 to 15%
ethanol, that is going to increase the demand. So
right now we need more yields in our corn to meet
the demand for ethanol. And once we get that
demand fulfilled, then I‘m ready to move on to
the 15% blend.‖
People would be ―completely amazed‖ at what
the renewable fuels industry would look like by
2030, ―if Congress would get out of the way and
Big Oil would be brought down to a level playing
field‖ instead of being highly subsidized, said
Monte Shaw, executive director of the Iowa
Renewable Fuels Association.
(Continued on next page)
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Feb/Mar 2011 www.giract.com Page | 21
Starch Italics Starch Industry Overview
Corn-based fuel still a target on national stage (Contd) ―With corn yield trends, we could feed the world
and produce 50 to 60 bio gallons of ethanol by
2030,‖ he said.―And that would just be from corn
starch,‖ he said. ―Any cellulosic ethanol
production would be above and beyond that. That
is game-changing.
―If the ethanol industry could wave a magic wand,
our view of the future would be quite simple,‖
Shaw said. ―Every vehicle on the road would be a
flexible fuel vehicle and every pump at a gasoline
station would be a flex fuel pump (blender pump).
―That would crush the oil monopoly that currently
uses its clout to keep consumers from being
empowered to choose the fuel of their choice,‖ he
said. ―If there was true consumer choice for fuels
the ethanol industry would feel quite confident in
America‘s fueling future.‖ (globegazette.com 20
March 2011)
Biodegradable plastics growth linked to composting infrastructure
Rising interest in biodegradable plastics is good
news for the bioplastics sector. But this
enthusiasm, on the part of both consumers and
governments, must be accompanied by the
installation of adequate composting
infrastructures - whether at local, regional or
national level, says Robert Heger, Vice President,
specialty plastics, at global chemical company
BASF
(Continued in next column)
Biodegradable plastics growth linked to composting infrastructure (Contd)
BASF, headquartered in Ludwigshafen, Germany,
estimates demand for biodegradable and
bio-based plastics will grow by 20-30% during
the next few years, helped by rising consumer
demand, new environmental regulations and the
development of new technologies and
applications.
BASF produces the biodegradable polymer
Ecoflex and derivative product Ecovio. Ecoflex,
an aliphatic-aromatic copolyester, acts as an
enabler by improving the flexibility of other
polymers such as polylactic acid (PLA) and
starch. Ecovio is a blend of Ecoflex and corn
sugar-based PLA.
While BASF's Ecoflex is biodegradable, it is not
generally produced from bio-based materials.
However, BASF has launched another Ecovio
plastic grade, branded Ecovio FS Paper, for lining
paper cups, which is manufactured using partly
bio-based Ecoflex. BASF has not disclosed which
of the three raw materials used to produce Ecoflex
- butanediol, terephthalic acid and adipic acid - is
bio-based in the Ecovio FS Paper grade. In theory,
each could be exchanged with a bio-based
material, Heger says.
Europe is the biggest market for Ecoflex and
Ecovio, with bags the largest application.
Germany has a particularly advanced
infrastructure for biodegradable polymers, Heger
says, and strong demand is expected in Italy
following the introduction of a law in January
banning the use of non-biodegradable single-use
bags.
BASF is also forecasting strong growth for the
products in North America, as well as in Japan
and Australia.
(Continued on next page)
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Starch Italics Starch Industry Overview
Biodegradable plastics growth linked to composting infrastructure (Contd)
In the US, government initiatives promoting the
use of renewable raw materials and feedstocks are
expected to help boost sales of biodegradable
plastics.
Earlier this year, BASF reached an agreement
with US bioplastics manufacturer Metabolix
which enables the German producer to sell Ecovio
in the US. Under the agreement, BASF has
acquired a license from Metabolix under a US
patent to produce and market PLA and
polybutylene adipate terephthalic acid (PBAT)
compounds under its Ecovio trade name.
Legislation supporting the use of biodegradable
packaging can help boost demand, but it is not
necessarily the best route, Heger notes. It is more
important to convince the consumers and brand
owners of the products' benefits, he suggests.
While Italy's plastic bag ban is creating additional
demand for biodegradable plastics, this effect is
less obvious in countries lacking that
infrastructure, such as China, where a plastic bag
ban was introduced in 2008. "In China, people
can buy biodegradable and compostable bags but
there is no infrastructure, no composting
facilities, so this plastics ban does not solve the
littering issue," Heger explains. (Continued in
next column)
Biodegradable plastics growth linked to composting infrastructure (Contd)
Other growth areas include agricultural mulch
films, films for lining paper products such as
cups, and disposable cutlery and plates.
Agricultural mulch films, which are used to
improve farming productivity, can be tilled into
the soil at the end of a growing season, unlike
polyethylene (PE) films which have to be
removed and then either cleaned or sent to
landfill.
"In countries with high labor costs, it can be cheaper for the farmers to use a biodegradable
mulch film that does not need to be removed
afterwards," Heger says. According to global
market research and consulting company Applied
Market Information, the market for agricultural
films was 3.6 mio t in 2008.
Using biodegradable films to line paper cups
allows the cup to be recycled or composted. Paper
cups are normally lined with PE, which causes
problems with recycling because PE does not
dissolve in the recycling process, Heger explains.
"We can achieve the same mechanical and
product properties with Ecovio film, such as
resistance to moisture and grease, but it does not
harm the recycling process," he says.
BASF estimates the global market for whole
paper cup material, including the paper and plastic
coating, at 1.3 to1.5 mio t.
The bioplastics market is extremely dynamic and
the introduction of new legislation makes it
difficult to predict when additional capacity will
be required, Heger says. "There is an underlying
trend towards sustainability globally. I'm not
saying that biodegradable plastics will save the
world, but they can contribute to sustainable
solutions," he adds. (icis.com 31 March 2011)
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Starch Italics Starch Industry Overview
New Technology Allows Maine Organization to Create a New Material
About 1% of the world's plastics are currently
made with bio-based material nearly all of which
comes from corn starch, but, Belliveau says,
demand is growing, and according to one
assessment, about 90% of all plastics could be
replaced with non-petroleum alternatives right
now.
Belliveau is also the Vice-President of the
Sustainable Bioplastics Council of Maine, a
newly-created trade association that's trying to
help Maine gaine a foothold in the biopastics
industry. He says scientists at the University of
Maine are planning to produce a plastic resin
called PLA, which stands for poly lactic acid,
using wood chips and potato waste both of which
maine has in large supply.
Bioplastics are also touted as environmentally
friendly because they're free of the controversial
additive found in some plastic items called
Bisphenol A, or BPA that many scientists say can
impair brain development. Steve Russell is
Vice-President of the council's plastics division.
Nevertheless, the appetite for alternatives plastics
is there, and a number of companies in Maine are
interested. In an industrial park near the popular
mid--coast vacation town of Boothbay, a startup
called Biovation is making PLA from corn starch
which is used to make most commercially
available 'green' plastics.
(Continued in next column)
New Technology Allows Maine Organization to Create a New Material (Contd)
Biovation also makes food packaging from
bioplastics, designed to extend the shelf life of
fresh fruit by protecting it from harmful bacteria.
Any new PLA will have to peform as well as, or
better than what is already commercially
available. Then there's the matter of cost:
corn-based plastic, is now being produced so
efficiently out West, that durdag says it's actually
cheaper than its petroleum-based equivalent.
Kerem Durdag: "We are manufacturer-agnostic of
PLA, we'll use anybody's PLA as long it
accomplishes our end goals. "Tom Porter: "But if
Maine-based material was available for the same
price. "A PLA-manufacturing plant is probably
going to cost about USD 200 mio to construct, he
says, and that's going to require a lot of venture
capital, plus some state funding in the form of
R&D bonds.And that wider New England market
is potentially worth hundreds of millions of
dollars in sales according to Rubin.(mpbn.net 10
March 2011)
Coperion Provides Compounding Systems to Process Biodegradable Plastics
Coperion GmbH, which is the result of the merger
of Coperion Werner & Pfleiderer, Coperion
Waeschle, Coperion Keya and Coperion
Hartmann, is a technology leader in compounding
systems and bulk materials plants and has
installed more than 10 000 compounding systems
and 8000 bulk materials handling systems
worldwide. The company works in the plastics,
chemistry, food and aluminum sectors where it
implements individual solutions for customers.
The company‘s twin screw extruder is the core
element of its compounding systems.
(Continued on next page)
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Starch Italics Starch Industry Overview
Coperion Provides Compounding Systems to Process Biodegradable Plastics (Contd)
Biodegradability needs to have a specific
advantage
One example of Coperion GmbH's technological
leadership in the biodegradable plastics sector is
the processing plant for biodegradable materials
belonging to the Portuguese compounding
company Cabopol - Polymer Compounds, S.A.
based in Porto de Mós. The plant became
operational in January 2010 and is the first plant
for compounding biodegradable plastics on the
Iberian Peninsula.
The biologically degradable materials are
commercialised by Cabopol as "BIOMIND", and
are mainly used for short-lived household and
agricultural products, e.g., disposable diapers and
sanitary or catering products. "I believe that
biodegradable products should always be used in
cases where biodegradability is advantageous,"
said Uta Kühnen explaining that it does not make
much sense to use biodegradable plastics in
long-lived products.
Therefore, the area of technical plastics is to a
growing extent turning to the processing of
biobased raw materials. "We can also support our
customers in this area with our comprehensive
know-how on biobased materials which have
similar compounding characteristics to classical
plastics," said Uta Kühnen. (azom.com 03 March
2011)
PHA and bio-derived PE to drive bioplastic packaging market to 2020: study Global bioplastic packaging demand is forecast to
reach 884kt by 2020. A 24.9% CAGR is expected
from 2010-15, slowing to 18.3% in the 5 years to
2020. According to a new study by Pira
International, a new breed of bioplastics will be
major drivers as packaging market demand
gradually shifts from biodegradable and
compostable polymers towards biopackaging
based on renewable and sustainable materials.
Based on primary research and expert analysis,
"The Future of Bioplastics for Packaging to 2020:
Global Market Forecasts" analyses the key
opportunities and future trends shaping the
industry, providing raw material suppliers,
processors and equipment suppliers with 10 year
forecasts. The report identifies about 50 suppliers
of biopolymers for packaging, and presents
technology and market forecasts to 2020 for
bioplastic packaging by product type, end-use
sector, pack type and geographic region.
From 2010, bioplastic technology is expected to
change with the commercialization of bioplastics
produced directly by natural/genetically modified
(GM) organisms and the introduction of
non-biodegradable, bio-derived polyethylene
(PE). Pira expects these materials will account for
a quarter of total bioplastic packaging market
demand by 2020. Polyhydroxyalkanoates (PHA)
are forecast to achieve a CAGR of 41% and bio-
derived PE a staggering 83% over the period.
According to the study, major new technologies
will emerge over the next 10 years. U.S.
bioplastics producer Cereplast, for example, is
planning to launch a range of all-natural algae-
based resins by the end of 2010. Also, several
companies are exploring the development of
bioplastics using carbon dioxide as a raw material.
(Continued on next page)
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Starch Italics Starch Industry Overview
PHA and bio-derived PE to drive bioplastic packaging market to 2020: study (Contd)
A new sugar-based bioplastic that can be sourced
from non-food crops and produced via a low
energy process is also tipped to reach the market
within the next five years.
Rigid packaging has a projected share of 52% of
the bioplastic packaging market in 2010 according
to Pira, with flexible packaging accounting for the
remaining 48%. Europe is the largest regional
market for bioplastic packaging with over half of
world tonnage in 2010. It benefits from favorable
consumer and retail attitudes to sustainable
packaging, supportive government policies
towards packaging waste recycling and a well-
developed composting infrastructure.
While North America currently trails Europe in
terms of bioplastic packaging consumption,
government and consumer attitudes are changing.
Pira expects North America and Asia to show
higher growth rates than Europe for bioplastic
packaging over the forecast period. Japan
accounts for the lion's share of Asian bioplastic
packaging, mostly as a result of favorable
government initiatives supporting bioplastic
market development. (packagingdigest.com 16
March 2011)
It’s Easy Being Green: Bioplastic-tastic
Reducing plastic usage is critical to a sustainable
future but plastics are undoubtedly an integral part
of our daily lives. A key solution to cutting plastic
use can be found in bioplastics, which are not
only made from renewable resources but also
biodegrade significantly quicker than
conventional plastics.
Conventional plastics are made from petroleum,
but bioplastics are produced using converted
biomass. You‘ve probably seen or heard of
cornstarch-based bioplastics. These have been
around for over 20 years and continue to
constitute a majority market share of
biodegradable plastics.
Scientists, for example, are producing bioplastics
from potatoes—a natural candidate because of
their high starch content. High levels of potato
cultivation worldwide also mean an abundant
supply that can help meet the world‘s plastic
demand.
Sugarcane is another crop being explored for its
bioplastics potential. In fact, Proctor & Gamble,
the Fortune 500 consumer goods company,
recently announced that it would start marketing
and producing sugarcane-derived bioplastics. The
entrance of such a prominent company into the
field is a boon for the potential future growth of
the industry.
Perhaps the most promising—and intriguing—
substitute for conventional plastic ismycelium, a
compound derived from mushrooms.
(Continued on next page)
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Starch Italics Starch Industry Overview
It’s Easy Being Green: Bioplastic-tastic (Contd)
Mycelium produces a strong, durable polymer
when introduced to certain types of organic
material. Technically, mycelium isn‘t
―bioplastic,‖ but it has qualities that allow it to
substitute for plastic in a number of different
capacities.
For instance, ―Mycobond,‖ a mushroom-derived
material created by entrepreneurs Gavin McIntyre
and Eben Bayer, is a green packaging alternative
that requires 98% less energy to produce than
conventional packaging materials. Mycobond is
all-natural, self-assembling, biodegradable, and
can be most commonly used as a substitute for
packing materials, which are some of the most
egregious sources of waste.
The sources of bioplastics are diverse, but the
benefits are similar. Bioplastics require less
energy to produce than conventional plastics, and
they are made with renewable biomass.
While all bioplastics are created from converted
biomass, not all bioplastics are compostable. If
you‘re looking to really cut down the ecological
impact of your plastic use make sure to use
compostable bioplastics. Ultimately, they‘re easy
to find, similar in price, indistinguishable from
their conventional plastic counterparts, and much
less damaging to our planet.(americanprogress.org
13 March 2011)
Coca Cola, DuPont, Kellogg's and Others Establish a Trade Organization for Sustainable Packaging
Some of the most ubiquitous products on
supermarket shelves may soon have greener
packaging— Colgate-Palmolive, Coca-Cola,
DuPont, Dow Chemical, Kellogg's and others
have formed a trade organization to coordinate
environmental efforts for the packaging industry.
(Continued in next column)
Coca Cola, DuPont, Kellogg's and Others Establish a Trade Organization for Sustainable Packaging (Contd)
Environmental Leader reports that the
Michigan-based American Institution for
Packaging and the Environment (Ameripen) will
"advocate on public policy relating to packaging
and the environment. It will collaborate with trade
associations, academic institutions, non-profits
and government agencies to facilitate relevant
research and data collection."
The association, which takes after similar
European and British organizations, will take a
"material-neutral" approach to packaging and in
addition to public policy will focus on education
and outreach, issue management, statistics,
research strategies, and communication tools.
Environmental Leader writes that it "will
encourage science-based decision making on
sustainable packaging initiatives. It will advocate
measures that are environmentally, socially and
economically sound, Ameripen said."
SmartPlanet points out that some companies, like
Coca Cola because of its PlantBottle, already have
a vested interested in continuing to improve the
sustainability of their packaging, while for others
that have run into stumbling blocks—"consider
the case of Dell and its bamboo boxes -- this
group could help take a load off."
(treehugger.com 10 March 2011)
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Starch Italics Starch Industry Overview
These are the news derived from regional
publications, translated using online tools,
hence the medium quality of translation.
CHINA
The duty-paid price of U.S. corn to China port rose slightly from 10th Feb
According to Dow Jones News Chicago on 10th,
February, U.S. corn futures closed slightly higher
Thursday despite the decline in grain markets
around, but the tight U.S. corn supply concerns
and the strong export sales data reported by
United States Department of Agriculture provide
support for the market.
U.S. Department of Agriculture report on
Thursday showed the U.S. corn export sales of
last week exceeded 100 mio t, the second
consecutive week more than that, although some
traders worried about high corn prices would
suppress demand. Arlan Suderman said strong
exported sales are the indication of "panic
selling", because many countries are eager to lock
the supply. This year about 40% of U.S. corn will
be used for ethanol processing, the U.S.
Department of Agriculture down the forecast of
corn supply on Wednesday, major reason is the
increasing demand for ethanol industry.
Commodity Markets Council will held the annual
meeting in Florida on Thursday, Market
participants will focus on Chief Economist of
U.S. Department of Agriculture, Joe Glauber‘s
speech concerning what measures the U.S
government will take to the continue rising of
31 months high corn futures price. U.S. No. 2
yellow corn, the delivery time is March,
FOB price is USD 300.6 per t, together
RMB 1 979 per t; The total cost to China after tax
is about RMB 2710 per t, compared with the
previous day rose RMB 1 per t, with last year‘s
same period up RMB 803 per t. (cndfsj.com 11
February 2011)
Jilin corn prices on 20th,Feb, 2011
Jilin food enterprises continued suspension of the
acquisition of corn. Nong An Region traders
tentatively set list price of corn at RMB 1920 per
t, but there is almost no market. In Si Ping
Region, the local stock traders purchase dry
provision at price RMB 1950 per t, but the actual
purchase amount is very limited.
Overall, Jilin native corn prices are still showing
strong momentum, this website will continue
focusing on post-market situation. Deep
processing enterprises in Jilin Province are still
under the state of suspension of the acquisition of
corn. Most parts of Jilin Province recently are in
good whether condition, temperature is generally
in the minus 3 degrees to minus 11 degrees , the
corn deep processing enterprises in the province
including the Changchun and Dacheng area are
all still in suspended state of acquisition of corn.
Some traders of parts of the main maize growing
areas in Jilin Province have been gradually listed
price and restored the acquisition, but the actual
acquisition situation is quite different.
JiuTai Region: Local individual traders currently
listed corn with 25% water content at price of
RMB 0.83 per kg, but almost no market, the corn
shipped after the Spring Festival are all the stock
from pre-holiday purchase, the price is
RMB 1920 -1930 per t, which loaded to container
in Bayuquan port, nobody is willing to send food
for local country reservoir.
Huadian region: Local stock trader currently
purchase corn with 28% water content at price of
RMB 0.785 per kg, the cost after drying is
RMB 1920-1930 per t, the price of direct
acquisition of corn (water content within 15%) is
RMB 1950 per t, the acquisition volume is
relatively better that other areas in the Province,
currently, the daily corn acquisition volume of
whole Huadian area is about 4 to 5kt.
(ymjgw.com 20 February 2011)
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Starch Italics Starch Industry Overview
Corn prices rose in Jiangsu market last week
According to market monitoring, Jiangsu corn
market rose last week. In the South part, Nanjing
region, the arrival price of the Northeast origin
second corn (with 14% water content) is at
RMB 2150 per t, the price is keeping same with
last week. Wuxi market is RMB 2.24 per kg
which rose RMB 0.02 per kg comparing with last
week.
In Changzhou region, the arrival price of first rate
Tongliao origin corn is at RMB 2 160 per t, up
RMB 20-30 per t; North China corn, arrival price
RMB 2150 per t, up RMB 10-20 per t, water
content less than 15%; Huanghuai corn, arrival
prices is about RMB 2060-2080 per t, up RMB 20
per t, water content 15% or so.
The wholesale price of corn in Taixing market
located in central of jiangsu province is
RMB 1.08 per kg, up RMB 0.01 per kg and the
retail price is RMB 1.12 per kg, up RMB 0.02 per
kg. Wholesale price of Rugao region remained at
RMB 1.04 per kg and the retail price is about
RMB1.07 per kg, up RMB 0.02 per kg.
Xuzhou east market, in Northern region of China,
the average origin corn purchase price is
RMB 1.05 per kg, up RMB 0.03 per kg,
individual high grade corn prices rose to
RMB 1.06 per kg, of which the village home
purchasing price by individual grain broker is
RMB 1.01 per kg; feed processing enterprices‘
purchase price is RMB 1.06 per kg; Farm
purchase price is RMB 1.06 per kg; state-owned
enterprises purchase price is RMB 1.02 per kg.
The price of Xuzhou market is RMB 1.04 per kg,
up RMB 0.02 per kg; Prices in southern Shandong
market is 1.05 yuan / kg, up RMB 0.03 per kg.
Lianyungang market price is RMB 1.02 per kg,
upRMB 0.01 per kg.
Corn prices will rise slightly later.
(Continued in next column)
Corn prices rose in Jiangsu market last week (Contd)
Firstly, a number of processing enterprises like
Zhongliang, suspended acquisitions corn in the
Northeast to give way to the reservoir, though the
acquisition progress is not satisfactory.
Although most companies are gradually
suspended corn acquisition in Northeast, China
Grain Reserves Corporation‘s purchasing progress
in local has not thus been strengthened. The main
reason is : Despite a substantial increase of corn
purchasing and storage price in the Northeast this
year, but compared to market prices, the policy of
increasing purchasing and storage price is of no
advantage at all, pressure of corn prices going up
continue to increase later.
Secondly, the Northeast stop production of starch,
domestic starch prices rose rapidly, in the North
China, starch and corn prices rise in the
meanwhile. Northeast deep processing enterprises
have ceased production to make way for the
reservoir, the domestic supply of starch reduced
and prices rose fast. According to our
understanding, the profit of starch companies is
relatively high, obviously raising corn price has
its significance.
Thirdly, there is no price advantage of imported
product temporarily but will have long-term and
increasing impact on the domestic market. As the
increasing corn price of international market,
imported corn prices has lost its advantage.
U.S. Gulf No. 2 yellow corn, the delivery time is
March, FOB price is USD 276 per t on 25th,Jan,
together RMB 1818 per t; The total cost to China
port after tax is about RMB 2562 per t. Corn
import is expected to be a sharp fall in the coming
months. However, in the long run, domestic corn
demand is with a rigid growth, importing corn to
fill the lack of corn in domestic market will be a
norm, the international corn prices have great
impact on the domestic market
(info.ch.gongchang.com 21 February 2011)
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Starch Italics Starch Industry Overview
February 24 corn early assessment: Focus on supply worries the U.S. corn closed higher rebound Chicago Futures Exchange (CBOT): Corn futures
closed higher on rebound in 23 markets. Most
active CBOT 5-month contract corn futures
closed up 12 cents, or 1.7%, to close at
USD 7.02 1/4 per bushel.
Analysts said they expect the market will hit a
new high in the coming weeks. Analysts said
rising corn prices need to ease the demand and to
attract farmers to expand acreage this spring to
add supply. Large acreage can not ease market
concerns, because the bad weather also hurt corn
crop.
Later this week, the U.S. Department of
Agriculture Outlook Forum at its annual meeting,
announced its estimate of crop acreage and
supply. Last week the government released the
report of the baseline forecast than expected corn
plantings, to help drive down prices.
Dalian corn futures sharply Tiaokongdikai 23, and
was test a low, late pared losses, the major 1109
contract closing price of RMB 2 392 per t, down
RMB 47 per t. Overnight rebound in U.S. corn
closed up disk, and the domestic corn supply and
demand situation is tight, and strong domestic
stock situation has not changed, is expected to be
limited downside corn market outlook, market
consolidation low bias.
In addition to external disk impact, the domestic
market is relatively stable, cash corn prices
remain strong pattern of postganglionic operating
rate of recovery in maize production company, is
boosting demand for corn. Overall, the corn
outside the tray to adjust to follow the bad
digestion, but the market remains bullish
potential, after a period of consolidation, the corn
is expected to gradually stabilize, downside is
expected to remain limited. (feedtrade.com.cn 24
February 2011)
Agricultural information: part of compound fertilizer enterprises intent to increase price
Corn starch
The corn starch market is active generally today,
general price rise by RMB 50 per t in different
area. The mainstream ex-factory price is
RMB 3200-3300 per t in Shandong region, Hebei
region is RMB 3000-3050 per t, Heilongjiang
region is RMB 2900 per t, Jilin and Liaoning
region is RMB 3000-3020 per t.
At present the overall inventory levels in northern
areas is general, individual small manufacturers
reflect that the supply is a little tight. Most traders
and downstream processing enterprises in
southern area market currently are still waiting
and watching the situation , but the market inquiry
increased, the market trend is expected to be more
clear this week with the gradually adjustment of
starch‘s price, but these two days, starch price will
still mainly increased.
Potato starch
Inquiry in potato starch market increased after the
year holiday and have great intention to increase
the price, some bargain-hunting traders to hoard
goods, the ex-factory price of potato starch is
slightly increased, the transaction price of Yunnan
superior grade flour price increase by RMB 500
per t, some manufacturers in Gansu and Ningxia
region raised by RMB 300 per t.
(Continued on next page)
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Starch Italics Starch Industry Overview
Agricultural information: part of compound fertilizer enterprises intent to increase price (Contd)
Individual manufacturers‘ offer have a tentative
rise, Yunnan potato starch enterprises have a
strong intention to pull up and increase the price
on behalf of "Verbatim", Yunnan "Verbatim"
potato starch manufacturers to offer tax-included
price at RMB 13 200 per t, the ex-factory price is
RMB 12800-13000 per t, the price of goods going
between friends is RMB12 500 per t, the
transaction price increase by RMB 500 per t.
The price of Dutch "windmill" brand potato starch
Guangzhou market is RMB 370 per bag, the price
increased by RMB 30 per bag, equivalent to
RMB 14 800 per t‘s high prices. Yunnan
"Verbatim" and Dutch "windmill" potato starch
tentatively increased price after new year initially
which boost the overall market raising of the
potato starch price, the offer of first grade potato
starch in Gansu and Ningxia region has an
intention to increase and the ex-factory prices
range is large, between RMB 11 000-11 500 per t,
the arrival price of the Frontier Snow" brand of
first grade potato starch powder in Guyuan
Ruifeng of Ningxia province, is
RMB 11300-11600 per t, up RMB 300 per t.
(Continued in next column)
Agricultural information: part of compound fertilizer enterprises intent to increase price (Contd)
Sugar
Wholesale market in Liuzhou kept the shock
consolidation trend in the morning, except the 023
contract‘s price falling at closing time of this
morning, the rest contract price all rose between
RMB 4-28, the closing price of 023 contract was
RMB 7 299, the offer is RMB 15 down, affected
by this, today‘s spot price of the main producing
areas is generally steady and sugar Group Sells at
Proper Price, transaction is generally subdued.
The spot price slightly lower in East China,
Central China and Central Plains region, the price
is RMB 7 520 per t in Shanghai, down RMB 30
per t compared with the previous trading day, and
the rest area‘s turnover was subdued; In most
parts of western South China, the price is
adjusted, the turnover is generally light; The price
of North China and Northeast China go up and
down alternately and trade is subdued. Sugar price
is expected to be weaker in the stable state.
(caihuanet.com 16 February 2011)
Global corn prices rising highly and Chinese increasing imports of Australian feed distilled grains sharply Since the New Year holiday, along with the
temperature rising, there are many talks about
food prices. Recently, the reduction of Global
Supply of Corn and the increasing price attract
much concern both in domestic and international
market. Most industry insiders believe that the
corn price is likely to rise and may exceed the
2008 record of USD 8 per bushel due to the strong
demand, lacking of planting area, weather risk
and so. The Current Market Price of corn futures
in Chicago reached USD 7 per bushel.
(Continued on next page)
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Starch Italics Starch Industry Overview
Global corn prices rising highly and Chinese increasing imports of Australian feed distilled grains sharply (Contd)
According to yesterday‘s China Maize Network
information, the exit price of corn (water content
within 15%) in the Northern Port is
RMB 2140-2150 per t, up about RMB 10-20 per t
than previous day. Corn purchase price is
RMB 2 060 oer t within the Port, up RMB 10 per
t. Despite the small transaction volume, many
traders remain believe the price will rise later.
Guangdong market which is the important
national corn sales areas, has been also affected
by the recent bullish Market, the corn price is
basically RMB 2239 per t. According to sources
from the Port-related staffs in Guangdong, the
Current Maize stocks in Guangdong ports is about
0.3 mio t, the transaction volume is expected to
gradually increase after the Chinese New Year
Holiday.
The selling peak came from the first week of last
month, Corn price had dropped slightly, but
farmers generally hold the corn and hope price to
raise, in addition, the development of animal
husbandry looks well, so demand for feed corn
rose further. It is believed that more and more
enterprises will gradually start to purchase the
corn, and with the wheat affected by drought, it is
not surprising that corn price continue to rise
Imported distilled grains instead of corn in
China
US Grains Council had expected China's corn
import in 2011 will reach 9 mio t, but because of
soaring prices, some of the imported plan has
been canceled. In fact, the imported dry distilled
grains from United States had exceeded 2.9 mio t, replacing 1.5 mio t imported corn. Under the
situation of rising grain price, it has been a
consensus of lot of analysts to import large
quantities of dry distilled grains. (futures.jrj.com.cn 18 February 2011)
RUSSIA
Production of starch in Belarus in January-June increased by 35,8%, products from potatoes - by 1.8%
Production of dry starch in Belarus in the first half
of 2009 amounted to 4.842kt, up 35.8% over the
same period last year, told Interfax-West "in the
National Statistics Committee (National Statistics
Committee).
Enterprises Belgospischeprom up to six months
have produced 1.167 t of starch, which is 1,2%
less than in January-June 2008, the enterprises
subordinate to the oblast executive committee -
2.213kt (67.5% more), city hall - 903 t (34,8%
more), National Academy of Sciences of Belarus -
509 t (29,2% more).
Manufacture of potato products in Belarus in
January-June 2009 amounted to 2.553 m and
increased compared to the same period last year to
1.8%. The largest volume of such products have
made the company Belgospischeprom - 1.76kt,
which is 12.2% less than in January-June 2008.
Legal entities without departmental affiliation in
January-June produced 733 t of potato products,
which is 62,5% more than the same period of
2008, Belkoopsoyuz - 41 t (36,7% more).
Enterprise NAS of Belarus produced 15 t of
potato, which is 16.7% less than the same period
last year. Production of dry potatoes during
January-June was 36 t (67.3% less than the same
period in 2008).
Starch reserves in the warehouses of the
enterprises on July 1 totaled 6.86 t, which is 8.5
times greater than the average monthly production
of potato products - 361 t (84,8%), dry potatoes -
-8 t (133.3%). (foodnewsweek.ru 04 March 2011)
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Sheikh invests in ethanol plant On the basis of the sugar Babinski Illinetskogo
district Vinnitchina build a plant for producing
ethanol - alcohol is added to the fuel. 100 mio
euros invested in the construction of the United
Arab Emirates and Swiss Finance Facility and the
company Bestinvest.
Sheikh Arab Emirates is interested in building
complex Babinski - says Chief Financial Officer
"Bestinvest Ivan Nemirovsky. - In the city of
Dubai building world's largest oil refinery walked.
Since its launch Arab Emirates will begin to sell
ready-made diesel fuel and gasoline. The most
predictable market for them is Europe. EU
standards require that gasoline was at least 10%
ethanol.
He will be extracted from corn. From the residual
mass will produce a dry granular bard high-
protein and protein. She fed cattle.
The plant will produce 320 thousand liters of
ethanol per day. To do this, 70 thousand hectares
of corn.
To organize the production investors plan to open
a railway station Dashivskaya. At the plant will
create 200 jobs. (gazeta.ua/ru 25 March 2011)
EUROPE
Nuplas begins construction of a plant to produce bioplastics for packaging
Nuplas (York, UK) launches the construction of
the plant to produce bioplastics second
generation, based on polylactic acid (G2 PLA).
Biopolymers will be used in the manufacture of
packaging, wrote Plastinfo. To build a plant with
capacity of 5kt per year required an investment of
11 mio pounds (EUR 13 mio).
(Continued in next column)
Nuplas begins construction of a plant to produce bioplastics for packaging (Contd)
Raw materials for the new production - namely,
lactide will be delivering in the Far East.
Approximately 1.2 mio pounds of investment
funds will be used to manufacture about 1kt of G2
PLA with the use of industrial outsourcing for
obtaining approval from the manufacturers
packaging. It is expected that the demand for
biodegradable polymers will be the manufacturers
of thermoformed packages, as well as packaging
films for fresh food and supplies to the short shelf
life.
Founder Nuplas Peter Reineck believes that the
production of PLA from wheat and other crops in
the UK would be profitable and environmentally
friendly. He said that the projected demand for
such materials in the EU increased in 2025 to
650kt per year and the plant in the UK will be
able to capture up to 20% of the market.
According to Mr. Reineck, there are a number of
market drivers for biodegradable materials. They
include the replacement of petroleum-based
polymers, reducing emissions of carbon dioxide
in the atmosphere, the guaranteed delivery system
that will reduce dependence on oil and give the
opportunity to receive renewable energy from
recovered waste. Currently, the European Union
is working on an adaptation program of
bio-products and Reineck believes that such a
program can be implemented within 12 months.
PLA polymers are the first generation are
imported from the United States and revealed the
existence of a market for such materials, but they
have a relatively small number of applications.
Nuplas has a single European license for the
technology to produce bioplastic second
generation, based on polylactic acid (G2 PLA). In
the long run, the plant hopes to increase
production capacity to 130kt per year.
(news.unipack.ru 28 February 2011)
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Quotas on exports of maize will be distributed at the auction
The distribution of quotas for export of 2 mio t of
maize from Ukraine in the second quarter of 2011
will happen at auction. This was reported by
Minister of Agrarian Policy Nicholas Prisyajnyuk.
"Tuesday will consider a bill of auction that is
open bidding, and money from the distribution of
quotas will be spent on upgrading the grain
industry," - he told journalists in Odesa.
Recall that in early October 2010 the Ukrainian
government introduced quotas for grain export in
the period up to December 31, 2010. Late last
year it was extended until March 31, 2011. In this
case, the total size of quotas has been increased by
1,5 mio t to 4.2 mio t.
As reported before, the government decided to
extend the quotas for grain even in quarters,
increasing the quota on the export of maize by
2 mio t.
During this time the quotas were distributed twice
a way that caused then sharp criticism from
market participants: Many companies were unable
to get the opinion of the Ministry of Agrarian
Policy and the availability of food grains, which
are necessary for applying for a quota.
(irtafax.com.ua 31 March 2011)
SOUTH AFRICA
South Africa: estimates of corn production down
According to official sources, the experts state
analytical agency Crop Estimates Committee
(CEC) lowered its estimate of corn production in
South Africa in 2010/11 MY (May-April) to
10.83 mio t against 11.04 mio t last forecast.
(Continued in next column)
South Africa: estimates of corn production down (Contd)
In particular, the collection of white maize is
estimated by analysts at 6.26 mio t, while yellow
– 4.6 mio t.
The downward adjustment index was the result of
excessive drought in the corn belt of the country,
which reduced grain yield. In addition, evaluation
of the acreage of maize in this period was also
lowered to 2.37 mio t against 2.38 mio t last
forecast.
We note that recent estimates of experts CEC
regarding the production of maize in South Africa
in 2009/10 were published on the level of
13.1 mio t. (apk-inform.com 25 March 2011)
VIETNAM
Floor price of rice exports increased 2.1% to USD 490 per t Rice exports from Vietnam rose to meet a demand
from neighboring countries in Asia and Africa,
helping to reduce pressure on real wages and
inflation in the region affected by the political
crisis Libya and natural disasters in Japan. Of
VFA data showed that rice exports from our
country so far this year average USD 478 per t,
FOB, up nearly 2% over the same period last
year.
(Continued on next page)
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Floor price of rice exports increased 2.1% to USD 490 per t (Contd)
Our country's rice supply is now plentiful through
the winter-spring rice crop in the Cuu Long River
Delta provinces. So far, farmers here have
harvested 81 000 hectares of crops, with paddy
output is estimated at 5.35 mio t. Harvest is
expected in the first half ended in April.
Although plentiful supply but the price of rice
increased the prospects of our country is in
coming weeks following information in the
Philippines bought 200kt of rice between the two
governments agreed.
Date 23/3, National Food Agency Philippines
(NFA) has agreed to import 200kt of rice from
Vietnam for this year plans to buy rice before the
harvest begins in July.
NFA rice is negotiating with Thailand. Thai
traders said they would be hard to achieve greater
agreement with Manila as the price of rice higher
than Thai rice of Vietnam.
Experts said that the Philippines for rice is very
good now because the world rice price has
declined significantly due to the countries from
Asia to Africa has abundant reserves of wheat,
corn and soybeans to stop food inflation.
Under this agreement, the Philippines to buy 25%
broken grade rice for USD 480 per t, lower than
the budget projected USD 550 per t C & F. This
move to FOB price is USD 440-445 per t - less
than the floor price by the Vietnam Food
Association rules are USD 470 per t applied 24/3
but still higher than actual transaction prices our
present.
Date 23/3, 25% broken rice price in Vietnam at
USD 410-415 per t, FOB Saigon Port. In
Thailand, 15% broken rice price, customers
typically purchase price Philippines 475-480 per t,
FOB.
Floor price of rice exports increased 2.1% to USD 490 per t (Contd)
The NFA said it was pleased to get a good price
this time with 200kt of rice imported from
Vietnam. Philippines plans to buy more rice from
Vietnam in the second quarter.
In addition, stable demand from China will also
assist Vietnam's rice price. From mid January to
now, China has bought 70kt of rice from Vietnam.
Vietnam Food Association said it would raise the
floor price of rice exports since 24 March 2011.
Accordingly, the floor price of 5% broken rice
exports increased 2.1% to USD 490 per t, 25%
broken rice floor price rose 2.2% to USD 470 per
t. The prices on the FOB price packing is 50 kg
per bag.
Thus, from the beginning of this year, VFA has
adjusted prices seven times. Latest, on 20/3, VFA
adjust rice export floor price reduction of 5%
broken from USD 500 per t to 480 USD per t and
25% broken rice from USD 480 per t to 460 per t.
(tamnhin.net 25 March 2011)
China demand boosts cassava price
Due to demand from mainland China, traders are
buying large quantities of cassava, causing the
domestic price to go up 40-45% compared to last
year. The export cassava price also increased
during this period.
(Continued on next page)
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China demand boosts cassava price (Contd)
According to the Viet Nam Market Analysis and
Forecast Joint-Stock Company Agro-Monitor,
domestic sliced cassava is selling for VND 6 300
per kilo.
The export price of tapioca starch to China has
increased to USD 550 per t. The Plant Quarantine
Sub-Department of Region VIII said 350-400 t of
cassava were being exported to China daily
through the border gate at Lao Cai.
In October last year, Chinese traders travelled to
Viet Nam to pay deposits to agents in Phu Yen,
Lao Cai, Yen Bai and Lai Chau provinces to buy
cassava. The Chinese market has faced a large
shortage, especially of the cassava varieties and
sliced cassava.
The domestic traders have taken full advantage of
the situation to collect fresh, dried and sliced
cassava as well as cassava varieties to transport to
Quy Nhon port in central Viet Nam for export to
China.
The Phu Yen Department of Agriculture and
Rural Development said in 2010-11 crop the
province grew 12,500ha of cassava, with an
estimated output of 200kt. However, the current
cassava purchases are expected to cause a
shortage of cassava varieties and affect production
and long-term cassava cultivation.
According to the Customs General Office, Viet
Nam exported 1.667 mio t of cassava, earning a
turnover of USD 556 mio last year.
Sliced cassava accounted for 56.8% and tapioca
starch 42.9%. China remained the biggest
importer of Vietnamese cassava last year,
accounting for 94.8% of the total export turnover.
(Continued in next column)
China demand boosts cassava price (Contd) The Ministry of Agriculture and Rural
Development said this year, the areas for growing
cassava was about 500 000ha, with output of
about 8.9 mio t, higher than last year‘s output of
8.52 mio t.
According to an annual report of the cassava and
tapioca starch industry and AgroMonitor‘s
forecast, this year‘s total demand for fresh cassava
for domestic production is about 8.12 mio t.
That includes 1.89 mio t for ethanol production;
2.67 mio t for foodstuff processing and animal
feed production; and 3.56 mio t for tapioca starch
production.
Thus, there is only 780kt for export, equivalent to
355kt of dried sliced cassava.
However, China has begun increasing its imports
of sliced cassava and fresh cassava, which could
increase VietNam‘s exports up to 4-5 mio t.
As a result, the domestic tapioca starch processors
and animal feed producers will face severe
competition in buying raw materials. Experts said
a long-term development strategy for the industry
should be created, including solutions that would
balance the supply and demand for exports and
raw material supply for domestic production.
(vietnambusiness.asia 23 March 2011)
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