Brazil venture to take pressure off China's domestic corn processing

By RJ Whitehead

- Last updated on GMT

Related tags: Maize

Brazil venture to take pressure off China's domestic corn processing
In a bid to slow down China's corn production, state-owned BBCA Group will invest US$320m in the construction of a plant to process corn in the Brazilian state of Mato Grosso do Sul.

The move comes as Beijing restricts the expansion of its own domestic corn processing industry to try to guarantee supplies for the livestock industry, with corn production already struggling to meet fast-paced demand.

Last week, FoodNavigator-Asia reported how for the first time ever, China’s corn production had overtaken that of rice​, raising further concerns over long-term food security.  According to official figures, production of corn increased to nearly 210m tonnes in 2012, up about 8% from the previous year. This is compared to a rise of just 1.6% in paddy rice production over the same period.

Construction this year

BBCA, a biochemical producer based in eastern China's Anhui province, will start to build the plant this year ahead of production of corn starch and other downstream products like glucose, maltose, corn oil and powdered protein to begin in 2015.

The plant will process 600,000 tonnes of maize per annum, with the crop sourced from local farmers. Sixty per cent of this production will be sent to the Chinese market and 40% would be for the Brazilian market.

This agreement is of benefit to both sides​,” said Mato Grosso do Sul governor André Puccinelli. He added that the state, where the Maracaju plant will be located, had the necessary raw materials but at present lacked the facilities to make use of them.

The BBCA group, which was founded in 1958, currently has 8,700 workers and eight subsidiaries covering the pharmaceutical, biochemical and food formulation industries.

Bird flu changing appetites

Meanwhile, the US Grains Council said that there were "suggestions" that Chinese consumers were switching to pork from chicken as a result of the current bird flu epidemic there—a move which would protect feed demand from contraction likely in the poultry industry.

"Some shoppers who shun poultry will instead buy pork, and groups at restaurants may order two pork dishes rather than the more typical one chicken and one pork dish​," the council, which promotes US grain exports, said.

Bryan Lohmar, USGC director in China, said: "Since hogs are less efficient converters of feed to meat, and use a higher proportion of energy feeds, any substitution of pork for poultry that occurs will dampen the negative effect of reduced poultry production on feed demand, particularly corn​."

At the same time, fish prices in the country are on the rise, which according to the USGC, could be an indication that consumers may be substituting fish for poultry, not pork.

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