GIRACT Starch Industry Overview October/November 2010
Starch Italics
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Starch Italics Starch Industry Overview
Oct/Nov 2010 TABLE OF CONTENTS
Crops and grains p.1 How we are faring with cassava starch production (Nigeria) SRI-CSIR develops fertiliser for cassava p.2 Food prices in the US expected to rise in 2011 p.3 Cassava exports decline by 18% p.4 Japan grain trader joins battle for Asian markets Starch and derivatives p.4 China starts sugar sell-off early as prices p.5 Starch, sucralose help Tate and Lyle to strong H1 p.6 Cargill promotes Truvia sweetener with multichannel marketing initiative Company News p.6 Tate & Lyle on track despite higher corn costs p.7 Tate & Lyle's strong earninderlying growth momentum Starch producer launches "Gaialene" polymer family / potential substitute for polyolefins and ABS p.8 Cargill profit surges 68% as volatile Grain markets boost trading p.9 Corn Products International (CPO) posts mixed results p.10 Government to revive Ayensu starch factory Solazyme and Roquette sign agreement to create Global Nutritional Joint Venture p.11 Tongaat Hulett expects higher interim earnings Bio-fuels p.12 Corn ethanol‘s stock rises, as its stocks rise p.13 Vietnam joins race for biofuel p.14 OMCs‘ ethanol pacts not enough for petrol plan June/July 2010
Bio-fuels (Contd) p.14 Frontier wheat club offers biofuel benefits p.15 Sorghum produces more ethanol, say research findings p.16 Brazil to build ethanol factory in Ghana p.17 Biofuels blame game p.18 Commodities buzz: US can meet ethanol demand despite tight supplies; says Deputy Ag Secretary Busy time for ethanol producers Agricultural waste to biofuel research published in India p.19 EPA announces renewable fuels standard 2011 requirements p.20 Mater-Bi distribution agreement with Thailand's Thantawan Bio-Plastics p.20 Potatoes to plastic p.21 Researchers engineer genes of plants to grow raw materials for green plastic Nigeria's plastic bag dilemma p.22 Wacker develops biodegradable plastics p.23 NYU researchers find corn starch solution can help shape solid materials Cardia makes bags by blending CO2 with starch Others p.23 Southern Minnesota beet sugar cooperative Regional Language News China p.24 Strive to achieve the 3 mio t plant polyols capacity p.25 Output reduction is not the main factor of the cassava starch price p.26 Continuation of known environmental needs of bio-plastics
© GIRACT 2010
(Table of contents continued on next page)
Starch Italics Starch Industry Overview
Oct/Nov 2010 TABLE OF CONTENTS
Regional Language News (Contd) China p.28 November 17, Dalian corn fell sharply Price trend of the recent situation in Jilin Maize p.29 Bio-plastic manufacturers industrial R&D Speed
GLOSSARY bio cpd crore JV k kt klpd lakh lpd mio M&A
Vietnam p.30 The situation of production and consumption of cassava in Vietnam and the world p.31 Increase cassava production for export: Not necessarily happy Brazil p.32 Plastic of maize, sugar cane and seaweed p.33 Brazil Oil and Novozymes join together to develop cellulosic ethanol Brazil's ethanol industry is driving in the fast lane
pa t tpa tpd tph tpm
Thailand p.35 Rice harvest could be down 20% First price index for rice industry launched
‗000 000 000 cases per day ‗0 000 000 Joint Venture ‗000 ‗000 t kilo litres per day ‗00 000 litres per day ‗000 000 Merger &Acquisition per annum t t per annum t per day t per hour t per month
Taiwan p.36 Researchers develop biodegradable seedling pot Czech Republic p.37 Starch from genetically-modified potatoes will be produced in the Czech Republic South Korea p.37 South Korea has purchased 110kt of maize
GIRACT Global Starch and Starch Derivatives study
Giract has just published new multiclient research into global starch supply, examining in particular the impact
of
the
recent
economic
downturn on the industry. Details on the following page.
June/July 2010
© GIRACT 2010
G IRACT
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
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GIRACT
Primary Starch Production – Executive Summary - sample
2. 2.1.
PRIMARY STARCH PRODUCTION BY REGION – EXECUTIVE SUMMARY OVERVIEW The table below summarises the distribution of primary starch make by raw material source and region in volume terms: Maize
Wheat
mio tons Potato
Tapioca
Other
Total
EU27 Other Europe N. America Other Americas China Other Asia ROW Total % of total (as 88% dsb)
The above table excludes (to the extent feasible) starch production for gasohol. The table below summarises the distribution of primary starch make by raw material source and region
(% of starch per raw material) Maize
Wheat
Potato
Tapioca
Other
Total
EU27 Other Europe N. America Other Americas China Other Asia ROW
Total Note: a … entry represents a very small magnitude of starch make
It emphasises the predominance of maize as the world raw material, except in the special
cases
of
tapioca
in
sub-tropical
wheat/potatoes in the protected EU market.
Impact of the Economic Downturn Starches and Derivatives
Global Production and Supply 2009/10 - 2015 Executive Summary
climates,
wheat
in
Oceania
and
Page 30
©©GIRACT
Vol II – Starches & Derivatives-sample Production of Starches and Derivatives, India, 2009/10 Native
Mod.
Starch
Starch
Glucose
glucose
88%
88%
78%
71%
ktons
IsoOther dry Dextrose
hydrol.
Polyols
Anil Starch Products Bharat Starch Industries Gayatri Bio-Organics Gujarat Ambuja Gulshan Polyols Jayamurugan Kashyap Sweetners Maize Prod/Sayaji Mills Riddhi Siddhi Gluco Biols Sahayadri St. & Industries Santhosh Maize Industries Siddharth Starch PVT Spac Group Sukhjit Starch Products Tirupathi Starch Products Universal Starch Products Varalaxmi Starch Ltd 3 Vijayanagar Biotech Yashwant Sahakari Glucose Others (all tapioca) Total *At the time of publication of this report, Gujarat Ambuja had stopped the production of sorbitol temporarily, and its reported #kt output has been removed from the above table
Producers Anil Starch is one of the oldest starch manufacturers in India and is part of Lalbhai group. The company produces a varied range of starches from basic maize starch to modified and specialty starches and related downstream products - dextrose
(monohydrate and anhydrous), corn syrup, etc. – for the textile, food, pharma, chemical and paper industries principally.
Impact of the Economic Downturn Starches and Derivatives
Global Production and Supply 2009/10 - 2015 Volume II – Starches and Derivatives
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Crops and grains
Starch Italics Starch Industry Overview
How we are faring with cassava starch production (Nigeria)
How we are faring with cassava starch production (Nigeria) (Contd)
Dele Ogundele, a chartered accountant, has worked in multi-national companies like Unilever and PZ Cussons Nigeria plc, before running Matna Foods. He speaks with Siaka Momoh, BusinessDay‘s Industry Editor, about how Matna Foods Company Limited, cassava starch production company, is faring in today‘s market. An estimated 60 mio t of starch are extracted from a wide range of cereal, root and tuber crops.
However, to encourage farmers stay on farms, Matna signed agreements with farmers around the community, agreements guaranteeing the purchase of their output. So, they had no fear of recording unsold stocks.
Interestingly, around 10% of that starch comes from cassava roots, a crop better known as the staple food of millions of low-income rural people in Africa, Asia and Latin America. With world cassava root production now standing at some 200 mio t a year, FAO says many developing countries could strengthen their rural economies and boost cassava farmers‘ incomes by converting more of that relatively low-cost raw material into high-value starches. Company Nigeria is world largest producer of cassava, producing about 40kt per annum. Matna Foods Company Limited is therefore in good business processing cassava tubers to starch. But last year, it was as if Nigeria had stopped from what it used to be because all of a sudden, cassava disappeared from the market and around Ogbese at the outskirts of Akure in Ondo State where Matna has its plant. For a greater part of last 2009, the company was not producing, but it did not relent in its effort to develop the pace at which it picks cassava. Cassava circle Matna is a victim of what is called in cassava processing parlance, ‗cassava circle‘. This means alternating high and low level supply of cassava tubers year-after-year. So, the efforts Matna made last year were actually designed to break that circle, so that the flow of cassava would continue as much as possible. (Continued in next column)
Oct/Nov 2010
Gas facility Matna does not have the luxury of access to gas network like other plants in Lagos. When they don‘t have power supply from the national grid, they switch on to their generators, powered with gas. It relies on diesel. Apart from that it also uses black oil for operating its boiler with which it generates the heat for drying starch. The black oil is also a very scarce commodity. Matna‘s installed capacity is about 150t of cassava per day. But it has never produced up to that level. (businessdayonline.com 11 October 2010)
SRI-CSIR develops fertiliser for cassava The Soil Research Institute of the Council for Scientific and Industrial Research (SRI-CSIR), has successfully conducted trials on fertilisers that can be used for increased cassava starch yield and quality cassava. Dr Joseph Cobbina, a Technical Specialist at the CSIR, made this known to farmers and M.Phil. students from the Kwame Nkrumah University of Science and Technology (KNUST) who undertook a field trip to the Kwadaso Agricultural College in Kumasi. He said the research was still underway and that results were expected to be shared by all member states of the Economic Community of West African States (ECOWAS). The research is under the auspices of the West Africa Agricultural Productivity Project (WAAPP) and is being implemented in Ghana by the Ministry of Food and Agriculture (MoFA). (Continued on next page)
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Crops and grains
Starch Italics Starch Industry Overview
SRI-CSIR develops fertiliser for cassava (Contd)
Food prices in the US expected to rise in 2011
DR Cobbina said WAAPP was being funded by the World Bank to strengthen research institutions in three countries — Ghana, Mali and Senegal — to generate improved technologies to increase agricultural productivity of important crops in line with regional priorities. He said the aim of the project was to fund demand-driven technologies, generate and disseminate improved technologies in priority sectors of the region and facilitate regional collaboration and integration.
As commodity prices continue to rise to new highs and US food producers see their profit margins shrink to new lows, food prices in the US are expected to rise again in 2011. US food producers have refrained in 2009 and 2010 to pass on the production cost to their consumers but may not have a choice but to increase food prices across the board to keep their profit margins from falling any further.
The field trip to the Kwadaso Agricultural College formed part of efforts to enhance the dissemination of increased cassava technologies, as well as to offer a platform to showcase the nature and efficiency of the new technologies for cassava. Under the WAAPP project, Mali is conducting research into rice with Senegal researching into cereals, while Ghana focuses on improving root and tubers (cassava, yam, cocoyam and sweet potato). Giving a background to the project, Dr Cobbina said in 2003, it was realised that although governments in West Africa were supposed to devote 10% of their budgets to agriculture, that was not being done.
Brand names like Kraft, Sara Lee and Dean Foods all reported smaller than expected profit margins throughout 2010 due to higher commodity prices of grain and milk. The companies who are facing stiff competition from white labeling products have kept their prices steady to protect their decreasing market share but that is about to change soon. The growth of wheat and soybeans in the US was replaced with large amounts of corn crops which ultimately found their way to ethanol production facilities. This subsidized replacement has not only interrupted the natural food chain by redirecting agricultural food from beef farms but has also reduced the reserve supply of wheat and soybeans.
He said the WAAPP was then developed with a focus to improve the export competitiveness, biodiversity, land administration and management, technology diffusion, trade facilitation and market access. He said in Ghana, although various varieties of cassava had been released by the CSIR, it was realised that lack of improvement in soil fertility, made it difficult for farmers to achieve the expected results. (modernghana.com 20 November 2010) The US is a large exporter of grain products throughout the world and had to fill in the gap during the Russian wheat export embargo earlier in the year. (Continued on next page) Oct/Nov 2010
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Crops and grains
Starch Italics Starch Industry Overview
Food prices in the US expected to rise in 2011 (Contd) That has not only put extra pressure on the internal supply but also on the commodities markets given that demand has not decreased. US food producers have no choice but to pass on the extra cost to their consumers in the US and abroad, and the price increases are expected to match or exceed those of 2008. The US has enjoyed a low inflation rate of 1% or less for the past 2 years, but such may change very quickly mid next year with hyperinflation following in 2012. The CPI will not be driven by energy prices but rather by food prices in general. The impact will also be felt around the globe as the US may opt to export less of its grain supply due to depleting reserves that are needed locally. One can find a rational solution for a trade or currency war but should this crisis ultimately result in a food war with high inflationary pressure then middle-class America will become the first victim. The solution would be to restore the natural food supply chain and find a balance between valuable crops instead of continuing to subsidize corn farmers to supply the ethanol production plants while diminishing wheat and soybean crops. Middle-class America cannot absorb high food prices in an economic climate that is hampered by high unemployment and low spendable income. The US economy cannot sustain a reduction of exported agricultural products either when trade balance sheets already run a deficit with 90 countries. A hyper-inflationary tsunami can only be avoided by going back to basic economics until global activity and international supply and demand stabilize. (examiner.com 15 November 2010)
Oct/Nov 2010
Cassava exports decline by 18% Viet Nam exported 70kt of cassava and cassava-based products worth USD 30 mio in September, according to a report published by the General Statistics Office. Last month's figures brought the country's total export value during the first 9 months to USD 384 mio, a year-on-year decrease of 18.1%.
Director of the Information and Statistics Centre under the Ministry of Agriculture and Rural Development Nguyen Viet Chien attributed the decline to waning Chinese consumption. China consumes 90% of Viet Nam's cassava and cassava-based exports products. The national cassava export market last year was hectic and it pushed up prices during the beginning of this year, said Chien. According to a ministry report, about 87 large and 300 small-sized manufacturers process cassava in VietNam. Each year, the manufacturers produce 985kt of starch and 150kt of cassava. In the past few years, cassava plantation shrank because of the crop's low demand. However, cassava demand has increased because the crop is used to produce feed and ethanol. VietNam is the second leading cassava exporter in the world. The ministry wants to create national quality and manufacturing standards to further develop the cassava-export sector. Setting up a cassava manufacturers' association should also be launched, reported the ministry. (vietnamnews.vnagency.com.vn 12 October 2010)
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Crops and grains Starch and derivatives
Starch Italics Starch Industry Overview
Japan grain trader joins battle for Asian markets
China starts sugar sell-off early as prices
Japanese grain trader Marubeni plans to take on the world's largest agricultural commodity traders in shipping to emerging Asian markets as demand at home moderates, the Financial Times reported Monday.
China is to start its programme of seasonal sugar sales from state reserves this week, more than a month earlier than last season, as the sweetener joined the list of farm commodities to set a record price high. The country's Ministry of Commerce said that it would on Friday release 210kt of sugar from state reserves, more than a month earlier than sales started in 2009-10.
Presently the world's sixth largest grain trader by volume, Marubeni expects to trade 20 mio t of crops such as wheat, maize and soya beans this year, of which only 6 mio will be sold in Japan, the paper reported.
The company plans to ship 25 mio t to customers by 2012 or 2013, said chief executive Teruo Asada, increasingly making it a rival to the likes of ADM, Bunge and Cargill in the United States, France's Louis Dreyfus and Swiss-based Glencore. Japanese commodity traders have traditionally concentrated on imports of products such as oil to make up for sparse resources at home, but a shrinking population and unimpressive economic growth have led them to turn elsewhere, the report noted. "The grain majors are simply supplying corn, soy and other grains to China. But we're using our grain to get into related businesses like milling and animal feed processing. That's the sort of thing that only a general trading company can do," Asada told the newspaper. (afp.com 29 November 2010) Oct/Nov 2010
The kick-off so soon in the 2010-11 crop year, which started this month, came as prices for white sugar hit a record RMB 6 252 (USD 940) per t for the Zhengzhou exchange's benchmark May contract. In London, white sugar for May closed down 0.5% at USD 648.5 per t. China also faces near-record prices as of Monday for cotton, and of corn for some contracts on the Dalian exchange, where soyoil prices are near two-year highs, all boosted by strong domestic demand which local production is struggling to keep up with. Indeed, sugar prices have been boosted by a continuing production shortfall which the US Department of Agriculture's Beijing bureau has estimated at 2.4m t for 2010-11, signalling a deficit even if the country imports all the quota of 1.95m t it allows at a tariff of 15%. Additional imports attract a tariff of 50% and, indeed, the country has never imported the maximum since its regime was shaken up on joining the World Trade Organisation 9 years ago. Supply prospects have been further weakened by the sell-off of much of the country's stocks last year, after a slide in production which reflected in part poor weather in cane producing districts, and in part a slump in beet plantings as farmers switched to grains following the 2008 price spike. (Continued on next page)
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Starch and derivatives
Starch Italics Starch Industry Overview
China starts sugar sell-off early as prices (Contd) Provincial authorities do not set a minimum price for sugar beet, unlike cane, making it more vulnerable to substitution with crops allowing higher margins. China's government sold off 1.7m t of sugar from state reserves in 2010-11, though 8 auctions which started last December, with a floor price of RMB 4 000 per t. China's sugar shortage is also underpinning sales of alternative sweeteners, including saccharine, of which the country produces 15 400 t, most for the export market, and corn-based syrups. The country's output of starch-based sweeteners expected to jump by 30% to 9m t in calendar 2010, amid soaring demand from domestic sugar producers, the USDA's Beijing office said in a report earlier this month. "High domestic natural sugar prices have made starch sugar a competitive substitute," the briefing said. London's benchmark December white sugar contract closed down 0.1% at USD 695.30 per t, with raw sugar for March up 1.4% at 27.44 cents per pound in late deals in NewYork. (agrimoney.com 18 October 2010)
Starch, sucralose help Tate and Lyle to strong H1 Tate & Lyle has now realised the full benefits of bringing together its sucralose manufacturing activities at one site, and despite lower selling prices its specialty ingredients division has reported volume gains and 27% higher operating profits. The ingredients company has reported sales of GBP 1348m for 6 months ended 30 September, compared to GBP 1298m in the same period last year. Operating profit rose 60% to GBP 138m. The company has been placing increasing store by speciality ingredients as it has gradually sold of its sugar assets. (Continued in next column) Oct/Nov 2010
Starch, sucralose help Tate and Lyle to strong H1 (Contd) Last month it announced plans to establish a new commercial and food innovation centre in Chicago, while plans for a bulk ingredients facility in Fort Dodge, Iowa, have been mothballed. Meanwhile, the company sold its EU sugar operations to American Sugar Refining, Inc for GBP 212m at the end of September, and is on track with the sales of remaining sugars businesses, namely molasses and Vietnamese sugar. Tate & Lyle saw a 7% increase in volume sales of specialty ingredients in the last 6 months, and a 3% increase in value (though flat in constant currencies). The better volumes, combined with improved product mix and the benefits of the single sucralose site, led it to a 32% increase in operating profit to GBP 108m. The ingredients company has reported sales of GBP 1348m for 6 months ended 30 September, compared to GBP 1298m in the same period last year. Operating profit rose 60% to GBP 138m. The company has been placing increasing store by speciality ingredients as it has gradually sold of its sugar assets. Last month it announced plans to establish a new commercial and food innovation centre in Chicago, while plans for a bulk ingredients facility in Fort Dodge, Iowa, have been mothballed. Meanwhile, the company sold its EU sugar operations to American Sugar Refining, Inc for GBP 212m at the end of September, and is on track with the sales of remaining sugars businesses, namely molasses and Vietnamese sugar. Tate & Lyle saw a 7% increase in volume sales of specialty ingredients in the last 6 months, and a 3% increase in value (though flat in constant currencies). (Continued on next page)
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Starch and derivatives Company News
Starch Italics Starch Industry Overview
Starch, sucralose help Tate and Lyle to strong H1 (Contd)
Tate & Lyle on track despite higher corn costs
Good growth was also seen in starch volume sales. Produced at the company‘s sites in Sagamoor in Indiana, and Koog in The Netherlands, starch-based ingredients account for around half the speciality ingredients division by value. In July Tate & Lyle opened its new polydextrose plant in Koog – said to be the first for the bulking agent in Europe, which is expected to shorten the lead time for European customers. (foodanddrinkeurope.com 4 November 2010)
Sugar and sweetener firm Tate & Lyle said today that it expects its encouraging start to the year to continue in spite of higher corn costs.
Cargill promotes Truvia sweetener with multichannel marketing initiative Cargill has announced it is launching a multichannel marketing campaign for its natural sweetener product, Truvia, in hopes of turning previously generated awareness into an emotional connection with prospective consumers. The multichannel marketing initiative will extend across national television, digital and social media. According to Ann Clark Tucker, Truvia's marketing director, the creative illustrates consumers' relationship with sweeteners in humorous ways. Truvia was jointly discovered in 2008 by Cargill and Coca-Cola as a replacement for artificial sweeteners commonly used in food and soft drinks. The product is made from Rebiana extracted from stevia plants. Strategies such as Cargill's approach of designing its marketing campaign with unique creativeness are growing increasingly important for many brands. According to a recent report, well-executed creativeness accounts for 52% of all sales changes. Meanwhile, media plan and pricing and distribution only affect 13 and 35% of sales, respectively. (ricg.com 6 October 2010)
Oct/Nov 2010
In the speciality food ingredients division, growth in speciality sweeteners and starches has remained steady, while sucralose volumes have been robust, though at lower selling prices, the company said. Corn sweetener volumes benefited from the continuation of firm demand for high fructose corn syrup (HFCS), a sweetener used in foods such as cereal and in fizzy drinks, in Mexico and good demand over summer in the US and Europe, T&L said. ‗The encouraging start to the year has continued in the second quarter, particularly within Speciality Food Ingredients, with good operational performance and solid demand in a number of our markets,‘ said chief executive Javed Ahmed. ‗This underpins our confidence that we will make progress in the full financial year.‘ T&L said that, while corn prices have been risen in the US and Europe, it was able to offset this in the US by lifting prices for its own products, while itself benefiting from hedging. In Europe, however, hedging options are more limited and higher corn prices are expected to have a ‗modest‘ impact on profitability during the final quarter of 2010. (Continued on next page)
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Company News
Starch Italics Starch Industry Overview
Tate & Lyle on track despite higher corn costs (Contd)
Tate & Lyle's Strong Earninderlying Growth Momentum (Contd)
Corn prices have been soaring recently, in line with soft commodity markets generally, fuelled by strong demand from the animal feed and the biofuel industries. Industrial starch volumes in both the Americas and Europe were ahead of last year, although margins continued to be weak, the company said. It added that ethanol margins improved slightly in the second quarter, although the market remained under pressure. Tate & Lyle is today completing the sale of its EU sugar refining operations for GBP 211, which will help to reduce debt. (sharecast.com 30 September 2010)
In July 2010, it agreed to sell a large chunk of its sugar business to American Sugar Refining for GBP 211 mio. (foodanddrinkinsight.com 12 November 2010)
Tate & Lyle's Strong Earninderlying Growth Momentum British ingredients producer Tate & Lyle has posted strong growth in profits for the first half of its fiscal year thanks to stronger margins and higher corn prices. For the 6 months to September, Tate & Lyle's adjusted operating profits increased by 13% in constant currency terms, with the firm aided by shifting the manufacture of its core sucralose brand to a single plant in low-cost Singapore. However, despite the favourable operating environment, sales for the group were flat on a constant currency basis, indicating that restoring top-line growth momentum may be harder than increasing profitability. Tate & Lyle has generally been seen by investors as a boring commodity play, which does well when demand for its key commodities such as sugar and starch is booming, but suffers when demand wanes. The firm has made moves to alter this perception - notably by focusing on valueadded ingredients and as part of this process it has also been selling off its sugar refining operations. (Continued in next column)
Oct/Nov 2010
Starch producer launches "Gaialene" polymer family / Potential substitute for polyolefins and ABS Starch producer Roquette Frères has taken the first step to becoming a biopolymer producer with the launch of the "Gaialene" polymer family. The materials, which are claimed to be based 50% on starch, were developed together with Setup Performance. Roquette currently produces the polymers in a pilot plant in Lestrem with capacity for several hundred t per year, but by Q1 2011 the company intends to have installed an industrial-scale plant at one of its French sites. The capacity is expected to be "several 10kt a year," general manager Michel Serpelloni told Plasteurope.com. The Roquette research team began working on the development of plant-based thermoplastics in 2007 as part of the "Gaiahub" innovation project. It is therefore to be expected that more polymers will follow. (Continued on next page)
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Company News
Starch Italics Starch Industry Overview
Starch producer launches "Gaialene" polymer family / Potential substitute for polyolefins and ABS (Contd) Roquette says Gaialene, which is apparently similar to the thermoplastic starches and the derived "eco plastic" compounds made by Plantic Technologies, is intended for applications in which polyolefins, ABS or engineering plastics are otherwise used. The three Gaialene grades currently available have high impact resistance and a soft feel, and are also easy to colour and compound, says Roquette. The polymers can be processed using standard processes such as injection moulding and extrusion blow moulding. "The Gaialene range is not the result of a simple mixing or compounding process, but a veritable hemi-synthesis that gives the thermoplastics completely new properties," explained Jean-Bernard Leleu, Director General of Roquette. Carbon-di-oxide emissions from the recyclable Gaialene are said to be at least 40% below those of oil-based plastics. It also has the advantage that it can be processed at a comparatively low temperature of 170°C, additionally lowering the energy consumption. (plasteurope.com 11 October 2010)
Cargill Profit Surges 68% Volatile Grain Markets Boost Trading Cargill, Inc., today said quarterly profit surged 68%, to USD 883 mio, helped by volatile grain markets that boosted trading revenue for one of the world‘s largest agricultural companies. Results in Cargill‘s origination and processing business, which includes commodity trading, rose ―significantly‖ in the quarter, the Minneapolis-based company said in a statement today. (Continued in next column) Oct/Nov 2010
Cargill Profit Surges 68% As Volatile Grain Markets Boost Trading (Contd) That reflected ―renewed market volatility and changes in trade flows (that) created opportunities for trading and for serving customers' price risk and raw material needs,‖ Cargill said.
Revenue during the 3 months ended August 31, Cargill‘s fiscal 2011 first quarter, rose to USD 27.8 bio, up 6% from the same period a year earlier, the company said. Corn, wheat and soybean prices rallied to multi-year highs this year as drought slashed Russia‘s grain crop and this autumn‘s U.S. harvest produced weaker-than-expected results. At Chicago-based CME Group, corn futures today rallied to a two-year high for the third day in a row. One of the largest grain and oilseed processors and traders, Cargill is also a top supplier of food and feed ingredients, fertilizer, beef and pork. In CME‘s agricultural markets, Cargill is a major player, accounting for 15 to 20% of a typical day‘s trading volume in corn futures, according to estimates from floor sources. During the first 9 months of this year, an average of 258 679 corn futures contracts - or almost 1.3 bio bushels - traded each day, up 28% from the same period in 2009, according to CME. Cargill spokeswoman Lisa Clemens said the company doesn‘t discuss its trading activity or its customers. (Continued on next page)
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Company News
Starch Italics Starch Industry Overview
Cargill Profit Surges 68% As Volatile Grain Markets Boost Trading (Contd) Quarterly results also benefitted from improved earnings from Cargill‘s food ingredients and animal protein businesses and from its majority stake in Mosaic Co., a fertilizer maker, the company said. The rally in corn and soybean prices is raising costs for beef and pork producers and other grain users. But Clemens noted that the U.S. corn crop this year – estimated at 12.66 bio bushels by the U.S. Department of Agriculture – is still expected to be the third-largest ever. December corn futures in Chicago today rose 23¼ cents to USD 5.79 a bushel, after climbing to USD 5.84¼, the highest price for a closest-to-expiration contract since August 2008. Corn futures are up 64% from about USD 3.54 at the end of June. Cargill owns a hedge fund, Black River Asset Management LLC, which as of 2007 had about USD 6 bio under management, according to news reports. Additionally, Cargill operates eight U.S. cattle slaughter plants with combined capacity to process about 30 250 head a day and two hog plants with total capacity of 38 500 head a day. (cattlenetwork.com 12 November 2010)
Corn Products International (CPO) posts mixed results Corn Products International, Inc. (NYSE: CPO) on Thursday morning released financial results that barely beat Wall Street earnings expectations, while just missing revenue estimates. Corn Products International, Inc reported that its 3rd quarter net income dropped to USD 36.9 mio, or 48 cents a share, down from USD 52.8 mio, or 70 cents, a year earlier. (Continued in next column) Oct/Nov 2010
Corn Products International (CPO) Posts Mixed Results (Contd) Excluding special items, the company earned 81 cents per share. Revenue rose 5% to USD 1.02 bio, up from USD 971 mio a year earlier. A poll of analysts conducted by Thomson Reuters showed an average Wall Street estimate of expected earnings of 79 cents per share, on revenue of USD 1.03 bio. Chairman, President, Chief Executive Officer Ilene Gordon said, ―I am pleased to report a very good quarter. We saw strong volume growth across all our regions. In North America, we continued to see strong demand from the beverage industry in Mexico, as well as regional volume improvements in processed foods, corrugating and bakery. In South America, volume growth resulted from broad customer demand across multiple segments. In Asia/Africa, volume growth continued to be led by customer demand for sweeteners and starches in South Korea and Pakistan.‖ Gordon continued, ―Given the strong performance of the business to date, we are increasing our 2010 EPS outlook to a range of USD 2.75 to 2.85, from our prior 2010 EPS outlook of USD 2.55 to 2.75. This range excludes the impact associated with the National Starch acquisition and the shutdown of the Company's Chilean plant.‖ Corn Products International, Inc. (CPO) ended the previous trading session at USD 41.10 per share. Analysts covering the company's stock have a consensus price target of USD 40.57 per share. (benzinga.com 28 October 2010)
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Company News
Starch Italics Starch Industry Overview
Government To Revive Ayensu Starch Factory The Minister for Trade and Industry, Ms. Hanna Tetteh, has assured management and workers of Ayensu starch limited of government‘s readiness in revitalising the company. She said, the government is in the process of allocating funds towards the revamping of the factory to create more employment in the region. Ms. Tetteh said this when she paid a visit to the Ayensu Starch Factory at Bawjiase in the Central Region. She noted that the sector Ministry is aware of the challenges management faces in the daily activity of the factory and assured them of her Ministry‘s assistance to facilitate the continuous work of the factory. The logistics co-ordinator of the factory, Mr. Sampson Abbey Armah, in an address noted that the factory was commissioned in February 2004 under the Presidential Special Initiative (PSI) on Cassava. It was also aimed to create market for cassava growers, develop cassava into starch and its allied products and create job avenues for the youth. As part of the revamping strategy, the factory has achieved success in organising the cropping of 3 000 acres of cassava to feed the factory for starch production. According to Mr. Armah, the company‘s nucleus farm operations has offered jobs to about 300 youths within the projects catchment area and said that the number will increase when production commence. He announced that some prospective farmers have expressed interest in joining the company in the mobilisation of raw materials and are only waiting to see the commencement of the factory operations. (ghana.gov.gh 22 November 2010)
Oct/Nov 2010
Solazyme and Roquette Sign Agreement to Create Global Nutritional Joint Venture
According to the press release, Solazyme, Inc. the California-based leader in renewable oil and bioproducts and Roquette Frères, the global starch and starch-derivatives company headquartered in France, today announced that they have signed a joint venture (JV) agreement for the production, commercialization and market development of microalgae-derived food ingredients, subject to regulatory approvals and notifications. The JV is being formed to launch an entirely new category of natural, healthy and functional ingredients based on microalgae that provide superior nutritional properties along with outstanding taste and texture. Solazyme-Roquette Nutritionals plans to launch a variety of oil, protein and fiber based products aimed at delivering improved performance with a vastly superior health profile compared to ingredients in the market today. The JV, which will be 50% owned by each parent company, will be named Solazyme-Roquette Nutritionals, and will be operational by the beginning of 2011. The JV‘s management team and board of directors will be drawn from both parent companies with Solazyme‘s CEO, Jonathan Wolfson serving as the initial CEO of the JV. Roquette will fund and build a JV-owned, commercial-scale manufacturing plant with capacity in the tens of thousands of tons of annual production, sited at a Roquette corn wet mill. (Continued on next page)
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Company News
Starch Italics Starch Industry Overview
Solazyme and Roquette Sign Agreement to Create Global Nutritional Joint Venture (Contd) In addition, Roquette will provide upfront licensing payments to Solazyme and working capital to fund the JV until reaching profitability. This JV combines Roquette‘s history and capabilities as a global food ingredient supplier with Solazyme‘s highly innovative microalgae-based technology. Like Solazyme, Roquette has been actively developing a microalgal nutritional platform and runs the Algohub® program while currently selling algae-based nutritional products. Roquette also possesses strong global manufacturing assets, and access to carbohydrate feedstock in multiple geographies through its network of highly efficient mills. In addition, the JV will leverage Roquette‘s large, global nutritional sales force to stimulate rapid market entry and provide access to major food companies worldwide. The merger of Roquette‘s extensive resources with Solazyme‘s revolutionary microalgae-derived food ingredient technology, which includes heart-healthy algal flours and oils, will provide solutions that improve both product functionality and nutritional profile in large market food ingredient applications. ―Solazyme and Roquette share a very clearly-defined vision that microalgae will provide a major new class of food ingredients and we enter this JV very enthusiastic about the future‖ says Guy Talbourdet, CEO of Roquette. Marc Roquette, Chairman of Roquette continued, ―We believe that along with Roquette, Solazyme possesses the most innovative microalgal food ingredient technology in the world, and we look forward to using our extensive skills and assets to help bring this technology to market.‖ (gsjournal.com 10 November 2010)
Oct/Nov 2010
Tongaat Hulett expects higher interim earnings JSE-listed agro-processor Tongaat Hulett expects to report higher headline earnings when it releases its half-year results next week, the company stated on Monday. The group expects a 12% increase in headline earnings to R507-mio for the half-year ended September 30, compared with the R452-mio earned in the same period last year. The improved earnings outlook comes despite sugar production in South Africa being affected by "the most severe drought since the mid-1990s". Headline earnings a share were also expected to increase by 10% to R4,82 a share.
The group said that while European and world sugar prices were favourable during the period, it also started to benefit from the targeted sugar production growth in Mozambique and Zimbabwe. However, Tongaat Hulett said that local sugar prices in Mozambique had not kept pace with the weakening of the local currency unit and that exchange rates had been less favourable than in the corresponding period in 2009. Meanwhile, profit from operations for the half-year to September 30, 2010, was expected to increase by 10% to R963-mio from the R873-mio earned in the comparative 6 months to September 30, 2009. This included profit from the Mozambique sugar operations of R163-mio, the Zimbabwe sugar operations of R303-mio, and the South African agriculture, milling and refining operations of R47-mio, as well as the different other sugar and downstream activities of R155-mio. Profit from the starch operations amounted to R125-mio and profit from the land conversion and development operations was R97-mio. The group planned to release its results on November 15. (engineeringnews.co.za 8 November 2010)
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Company News Bio-Fuels
Starch Italics Starch Industry Overview
Corn ethanol’s stock rises, as its stocks rise
Corn ethanol’s stock rises, as its stocks rise (Contd)
The Biofuels Digest Index underperformed the S&P earlier this year, when the BP Gulf Oil leak weighed on prices, but has sharply rebounded and now leads the S&P by 5% for the year. Conventional wisdom holds that first-generation ethanol is dead as a door-nail in terms of attracting viable investment, but events in recent months suggest that the conventional wisdom is off by some margin.
Not to mention the appearance of players like Valero, Sunoco and Murphy Oil on the scene, buying up stranded assets from VeraSun and Panda Ethanol among others. In one recent quarter the ethanol division of Valero was among the brightest financial stars in that company‘s constellation of assets, and with the profits being generated by the until, the company may well pay off that investment over the next few years and find itself simply calculating the dimension of its ROI.
The Sacramento Business Journal reported yesterday that ―shares of Pacific Ethanol Inc. climbed 3% in trading Thursday, after the ethanol-producer raised USD 53.5 mio in cash — a combination of selling USD 35 million in senior convertible notes and its minority interest in Front Range Energy LLC for USD 18.5 mio.‖ Consider the anguish and noise that surrounded Amyris‘s multi-month effort to raise USD 80 mio via its NASDAQ IPO. Barron‘s recently opinioned that ―As world populations grow, they will require more food and fuel. With its portfolio of food ingredients, livestock feed and biofuels, Archer Daniels Midland may well be the company supplying them.‖ ADM had a good showing through the summer. Other ethanol players have been doing notably well on the public exchanges this year, with BioFuel Energy trading sharply up this month compared to three months ago, closing yesterday at USD 2.91 compared to USD 1.20 just 3 months ago.
Further, though the advance has been most strongly felt in first-generation biofuels, the Biofuels Digest Index has outperformed the S&P 500 by 5% this year, and is up 10.3% for the year to date, reflecting a broad rise in renewables (especially considering the dragging effect that BP has had on the Index since April). What seems to be happening, instead, is a solidifying of balance sheets (though many companies have far to go in repairing damages suffered during the debacle of 2008), and a return of confidence among investors that, whatever the fate of corn ethanol, for the time present it is here to stay, courtesy of the Renewable Fuel Standard and the absence of substitutes for corn in the feedstock mix. Ethanol futures through 2013 are trading in a narrow USD 1.93 to USD 1.98 range on the Chicago Board of Trade, and with 15 bio gallons of corn ethanol likely to be produced and distributed under the RFS (excluding the potential for exports), that creates a relatively stable USD 29 bio annual market for ethanol in the US. (biofuelsdigest.com 8 November 2010)
(Continued in next column)
Oct/Nov 2010
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Bio-Fuels
Starch Italics Starch Industry Overview
Vietnam joins race for biofuel Vietnam said it has intensified efforts to promote biofuel production in the country under the plan on biofuel development to 2015 with a vision to 2025. According to country‘s energy ministry, Vietnam is focussing on production of ‗green gasoline‘ from cassava, coconut, sesame, peanut, flax and jatropha, and from animal products such as catfish fat. The government has instructed ministries to give incentives for the production and use of biofuel, defined as fuel made from these raw materials. Under the plan on biofuel development to 2015 with a vision to 2025, Vietnam will produce 1.8 mio t of ethanol and vegetable oils for use as fuel annually, meeting 5% of domestic petrol and diesel demand in the next 15 years. Many countries already manufacture large amounts of biofuels, especially in the US and Brazil. Once a big importer of oil, Brazil has substantially reduced its requirement thanks to biofuel development. Some Asian countries are strongly investing in biofuels, among them Thailand, China and India. By the end of 2011, Vietnam will have five biofuels plants with a total capital of 365kt of ethanol, which, mixed with gasoline, will yield 7.3 mio t of E5 petrol. Biofuel has been designated a key industry and biofuel production projects enjoy the highest level of investment incentives. According to Government planners, from 2007 to 2010, Vietnam will finalise a legal framework to encourage the production and use of biofuel, design the roadmap for using biofuels in Vietnam, learning biofuel technologies, training human resources for this industry, zoning and developing material areas for biofuel, build biofuel plants to meet 0.4% of the country‘s need for petrol by 2010. This start-up work is basically on schedule. (Continued in next column)
Oct/Nov 2010
Vietnam joins race for biofuel (Contd) From 2011-2015, according to planners, Vietnam will begin to produce additives, enzymes and other materials for biofuels and expand their production, develop new varieties of high productivity, and expand biofuel plant capacity to satisfy 1% of the country‘s need for petrol by 2015. From 2016 to 2025, Vietnam will build an advanced biofuel industry that will produce 100% of the national requirement for E5 and B5 fuels, i.e., will provide 5% of the fuel needed to run the nation‘s motor fleets. A United Nations Environment Programme report showed biofuels accounted for 1.8% of transport fuel. Ethanol production tripled between 2000-07 and biodiesel production rose 11-fold. The UNEP report also said mandates to blend biofuel into fossil fuels for vehicles had been enacted in 17 countries by 2006, most requiring blending with 10-15% ethanol or 2-5% biodiesel. Brazil exported 5 bio litres of ethanol in 2008. Its investment in biofuels rose to USD 4 bio in 2007 and had most likely risen substantially since then.
OMCs’ ethanol pacts not enough for petrol plan Oil marketing companies (OMCs) have issued letters of intent for only 70% of the ethanol supply offers made by the sugar industry and standalone distillers for the petrol blending programme. Of the 1 000 mio litres (ml) of offers made by the industry, around 30% have been disqualified for technical reasons, for inability to show that the molasses used in producing ethanol were indigenous. The tender issued by the OMCs said the ethanol for blending should be produced from indigenous biomass such as sugarcane or starch-containing material such as corn and cassava or cellulosic material such as bagasse, wood waste, and indigenous molasses. (Continued on next page)
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Bio-Fuels
Starch Italics Starch Industry Overview
OMCs’ ethanol pacts not enough for petrol plan ―Those who have been disqualified are primarily the standalone distillers, mainly in Maharashtra, who purchase rectified spirit from sugar mills (who do not have ethanol facility) and process it to make ethanol. Such units are unable to show the sourcing of molasses,‖ said a sugar industry executive. Against a tender requirement of 1 050 ml, the ethanol producers had made supply offers of 1 000 ml last month. This was more than the 860 ml required for 5% petrol blending. An Indian Oil official said OMCs have issued letters of intent to only 70% of the offers. So, the blending programme cannot be nationally implemented for the whole year, unless more quantities are tendered. A sugar industry official said the industry might offer more if a fresh tender is brought in, as they now have a more reliable estimate of sugarcane output. Ethanol blending with petrol at 5% continued for about 2 years before coming to a halt in October last year, due to low supply on account of dip in sugarcane output. Against a demand of 1 800 ml for the period of 2006 to 2009, the sugar industry supplied only 585 ml. Consequently, in the latest round, the OMCs have insisted on stringent penalty clauses for non-supply or default by sugar companies. Ethanol is considered a ‗green‘ fuel and blending will also help reduce India‘s heavy dependence on crude oil imports. Some OMCs also have plans to start ethanol production themselves. Hindustan Petroleum Corporation, for instance, bought two sick sugar mills in Bihar in 2008 to produce ethanol. These mills will start producing ethanol from this December. (commodityonline.com 28 October 2010)
Frontier wheat club offers biofuel benefits Frontier has revealed details of its farmer contract to supply wheat to the Vivergo bioethanol plant, being built on Humberside. The factory will use 1.1 mio t of wheat per year and is due to start production in mid 2011, with the demand for about 100kt per month. "We want to make this the most attractive home in the country for wheat," said Frontier's grain procurement manager Andrew Flux. "The pricing level in the area is going to go up and we are very keen to buy wheat every day of the year." Details of Frontier's Humber Gold club for growers were unveiled on 11 November, promising competitive prices and other incentives for those who signed up to supply a minimum of 120t of wheat. Farmers will be able to send wheat to the plant at up to 17% moisture, with any penalties promised at less than it would cost growers to dry grain to the contract standard of 15%, said Mr Flux. Other standard contract terms are a specific weight of 72 kg per hl and 2% admixture, with payment on 21-day terms. Shorter payment terms of 14 and 7 days will be available in some cases to encourage commitment and boost supplies at certain times. Contracts can be on a priced, unpriced or pool basis. All soft wheat varieties will be accepted, but for harvest 2012 there could be incentives, including delayed payment terms on seed, for growing high-starch varieties which produce better ethanol yields, said Mr Flux. The more grain a farmers commits through the Humber Gold club, the greater the benefits, said Mr Flux. Frontier's Manchester Gold club, which supplies wheat for the Cargill starch plant near Manchester, includes a similar feature and it was this benefit that proved most popular with farmers, said Mr Flux. (Continued on next page)
Oct/Nov 2010
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Bio-Fuels
Starch Italics Starch Industry Overview
Frontier wheat club offers biofuel benefits (Contd)
Sorghum Produces More Ethanol, Say Research Findings (Contd)
The Vivergo plant will have flexible opening hours, allowing farmers to arrange loading to suit their schedule. Quality analysis will also be available within 30 minutes of a load being tipped at the plant. Part of the service for Humber Gold growers will be a tool to evaluate the carbon score of their crop production, which would help them reduce their environmental impact, said Mr Flux. The Vivergo bioethanol factory is a joint venture between BP, British Sugar and DuPont. (fwi.co.uk 24 November 2010)
The research was aimed at finding ethanol production efficiency of the sorghum grass produced under double cropping system to improve biofuel production yield. The report indicates that ethanol production from corn or other starch-based varieties will meet only 15 to 25% of the clean energy requirements and indicates that the ethanol produced from cellulose-based materials remain more effective than the starch-based biofuels. According to the findings, though certain types of sorghum developed in double cropping method produced the same amount of ethanol like that of a single cropped yield, only sorghum product that is developed in single crop yield constantly produced higher levels of ethanol. The research suggests further trials in double-cropping system by incorporating methods such as in the growing of crops during various seasons and planting the crop very close to its optimal date to improve the quality of biomass during the major portion of its growing season and others. (azocleantech.com 24 November 2010)
Sorghum Produces More Ethanol, Say Research Findings Recent findings by Ben Goff, a researcher from the Iowa State University, indicate that sorghum grown as a single crop produces more ethanol. The university studied 12 different varieties of sorghum grass grown both in single and double cropping methods. The research also wanted to probe into the long-term ecological benefits such as reduced soil erosion in following the double cropping method. (Continued in next column)
Oct/Nov 2010
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Bio-Fuels
Starch Italics Starch Industry Overview
Brazil To Build Ethanol Factory In Ghana
Brazil To Build Ethanol Factory In Ghana (Contd)
The Brazilian government is to establish a USD 300 mio sugar cane plantation to produce over 100 000 cu. m. of ethanol at Makango, near Salaga in the Northern region. Ethanol is expected to become Ghana‘s fourth major export after cocoa, gold and timber. The factory would generate 42 Megawatts (MW) of energy from Bagasse, which is the fibrous matter that remains after the sugar cane is crushed to extract the juice. The factory would use seven MW and sell 35 MW to other power generating companies.
He also stated that Brazil recovered from the world economic crisis faster than the rest of the world because it has a very huge internal market that consumes what the country was not able to export.
This was disclosed by the Brazilian Ambassador to Ghana, His Excellency, Luis Fernando Serra in an exclusive interview with City & Business Guide. Asked why Makango was chosen for the project, the envoy indicated that the soil for the proposed 2700-hectare plantation was good and had enough water from the Volta Lake to do good business. Commenting on the election of Madam Dilma Rousseff, the first female President of Brazil, Ambassador Serra pointed out that the results mean continuity and also showed the support given to her by the Lula administration. ―The people of Brazil had recognized President Luiz Inacio Lula da Silva‘s achievements, the country is having USD 280 bio in international reserve,‖ he stated. He continued: ―Brazil is now the number one producer and exporter of green coffee, orange juice and sugar in the world. ―She is number 2 in beef and soya bean. Number 3 in chicken and then number 4 in corn or maize.‖ Ambassador Serra revealed that in 2009, Brazil exported USD 64.7 bio in agricultural products and imported only USD 9.8 bio worth of goods.
Serra again disclosed that measures were in put in place in 1994 to control inflation and attract foreign investors, explaining that an open market policy was also adopted. ―Another policy that was vigorously adopted was food security by which Brazil went into intensive and extensive agriculture development with intensive scientific research in all fields of agriculture,‖ he stressed. The country ‗s scientific researchers, the Brazilian envoy revealed, are seriously trying to develop a new type of wheat that could be cultivated in the tropical regions so as to help developing countries, especially those in Africa to save a lot of foreign exchange. ―The African continent is dear to Brazil as we see it as our mirror and it showed clearly in the foreign policy of the out-going administration,‖ Serra said, adding that 15 African Embassies were opened during his tenure with 11 African trips to 25 countries.‖ He noted that Brazil owed a great debt to the African continent, revealing that slaves taken from Africa helped to enrich the Southern American countries in terms of what they did in the mines and sugar plantations. ―Brazil will continue to support the campaign for an African country to become a permanent member of the United Nations,‖ he stated. Ambassador Serra advised that Ghana should continue its campaign on intensive agriculture to feed the people and acquire surplus for export. (business.peacefmonline.com 11 November 2010)
(Continued in next column)
Oct/Nov 2010
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Bio-Fuels
Starch Italics Starch Industry Overview
Biofuels Blame Game
Biofuels Blame Game (Contd)
Every time the biofuels industry thinks it has successfully battled back the food vs. fuel argument, it crops up again. The tired old argument resurfaced after an October 8 USDA report forecast dramatic decreases in world coarse grain supplies, including corn. In the following days corn futures prices shot up to a high of USD 5.79, prompting some to predict food prices would soar.
Notably, prices actually spiked when ethanol use was decreasing in the U.S. The report says that demand by developing countries probably didn‘t put upward pressure on the prices of food commodities. It may have, however, put some upward pressure indirectly through energy prices. It also says the investment funds‘ use of commodities, or the ―so-called financialization of commodities,‖ may have been partly responsible for the food price spike in 2007-08.
The American Meat Institute, for example, quickly predicted that increased corn costs would mean increased prices for beef, pork and poultry and producers would pass on higher feed costs to consumers. AMI and other ethanol critics met with the White House October 21 to oppose the extension of ethanol tax credits. However AMI ignores the one-third of the corn that goes into an ethanol plant that comes out as distillers grains. In fact, in 2009, the ethanol industry produced the equivalent amount of distillers grains as was fed to cattle at U.S. feedlots last year, says Bob Dinneen, President and CEO of the Renewable Fuels Association. Another item that gets filed in the short term memory bank is the World Bank report that came out this summer. Authors John Baffes and Tassos Haniotis conclude that biofuels had a much smaller impact on food prices during the commodity price boom of 2006-08 than initially reported. It‘s clear, the report says, that U.S. cornbased ethanol production and, to a lesser extent, EU biodiesel production, affected market balances and land use. Worldwide biofuels only account for about 1.5% of the area planted with grain and oilseeds, however. ―This raises serious doubts about claims that biofuels account for a big shift in global demand,‖ the report says. It also points out that corn prices didn‘t change much at all as U.S. ethanol production first started increasing. (Continued in next column)
Oct/Nov 2010
Oil prices were a big factor, too. ―A stronger link between energy and non-energy commodity prices is likely to be the dominant influence on developments in commodity, and especially food, markets,‖ the paper says. Many in the ethanol industry say they have been vindicated. ―This report should finally silence those that have blamed the biofuel producers for food shortages, food price increases and for committing a ‗crime against humanity,‘‖ says Rob Vierhout, secretary general of ePURE, the Producers Union of Renewable Ethanol, formerly eBio. ―It is about time these people recognize the facts.‖ Tom Buis, CEO of Growth Energy, says the report would dispel myths and lies of food vs. fuel. ―I applaud the World Bank for admitting the error of their ways and setting the record straight.‖ (ethanolproducer.com 22 October 2010) GIRACT
th
9 Starch & Derivatives Conference, Geneva Giract has pleasure in announcing this important event to take place in Geneva, Switzerland on February
25,
2011.
The
theme
of
this
9th
conference will be ‘Sustainability Issues for the Starch
Industry’.
interactive
It
seminar
is
designed
and
ideal
to
be
an
networking
opportunity for a limited number of high-level participants. Full details are to be found on the following
pages.
Please
do
not
hesitate
to
contact us at info@giract.com if you have any questions.
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AN INTERNATIONAL SEMINAR
PROGRAMME This 9th seminar will aim to: • offer an interactive forum for identifying common opportunities and threats • present and discuss recent industry developments • obtain and analyse relevant external views
9th Starch &
PROVISIONAL AGENDA
Derivatives
Conference
OMMODITIES WORLD TRADE IN AGRICULTURAL COMMODIT IES – CEREALS VERSUS TUBERS
Alastair Dickie - CFM (UK) Ltd
Sustainability Issues for the Starch Industry - an Interactive Seminar
STARCH IN THE EUROPEAN PAPER INDUSTRY - A CHANGING GLOBAL PERSPECTIVE Detlef Glittenberg – Cargill
OPPORTUNITIES FOR TAPIOCA IN INDIA Speaker to be announced
February 25, 2011
SUSTAINABLE FOOD PRODUCTION AND IMPLICATIONS FOR STARCH SUPPLIERS Holger Toschka - Unilever
Geneva, Switzerland
CHALLENGES OPPORTUNITIES AND CHA LLENGES FROM AN EQUIPMENT SUPPLIER’S POINT OF VIEW
Speaker to be announced
Organised by
GIRACT
Jo Goossens – Giract
24 Pré Colomb
GIRACT COMPETENCE
CH-1290 Versoix-Geneva Tel: +41 22 779 0500 Fax: +41 22 779 0505 info@giract.com www.giract.com
BACKGROUND The Starch Industry continues to
evolve
rapidly. The global shift in production and demand, raw materials issues and changing consumer demands are reflecting the growing importance of the sustainability question for the industry. This will be the main theme of the 9th Starch & Derivatives Conference which will focus on
NEED FOR OPEN INNOVATION IN THE STARCH INDUSTRY
the opportunities for
the
European starch sector. It may be necessary for reasons beyond the control of the organizers to alter the content and/or timing of the programme
Giract is the leading ingredient and additive market research specialist with over 30 years experience. Its clients are worldwide in both ingredients supply and food processing industries. It has been working closely with the starch industry - both at the producer and user levels – for a number of years and thus understands the real requirements of this sector: it is an independent company with an unblemished reputation of strict neutrality and confidentiality its senior members are already known to many key personnel in this industry its range of work in the starch and related sectors – both individual and multiclient – over a number of years has given it a clear understanding of the sector and its problems and opportunities.
9TH STARCH & DERIVATIVES CONFERENCE GENEVA, FEBRUARY 25, 2011 DATE
HOW TO REGISTER
Friday, February 25, 2011: 2011:
09h0009h00-16h00
- Online at www.giract.com/reservations using the event code stc9
VENUE Swissôtel Metropole Quai Général Guisan 34 1204 Geneva Tel: +41 22 318 3200 www.swissotel.com/geneva Situated on the lakeside in downtown Geneva
- By completing and returning the booking form to:
HOTEL ACCOMMODATION
DINNER FOR DELEGATES, FEBRUARY 24, 2011
Hotel accommodation and travel are not included in the registration fee. Rooms have been retained for delegates at the following hotels, each with special conference rates. Please indicate your choice as soon as possible as room availability at these hotels is limited Swissô CHF 450/night Swissôtel Metropole conference venue (incl. breakfast)
Giract is organising a dinner for delegates on Thursday evening, February 24. This is an important networking opportunity and we encourage all delegates to participate. Contribution is EUR 85 per delegate.
GIRACT 24 Pré Colomb CH-1290 Versoix/Genève, Switzerland Tel: +41 22 779 0500 Fax: +41 22 779 0505 info@giract.com
PAYMENT - By bank transfer to: UBS - Union de Banques Suisses 1211 Genève 2 Depôt IBAN: CH540024024042182971X
Hotel New Midi CHF 290/night 10 minute walk from conference venue (excl. breakfast) Hotel Churchill CHF 155/night 5 minute walk from conference venue (incl. breakfast)
- With Visa/Mastercard via online registration
CANCELLATION
CONFERENCE REGISTRATION FEE First participant: Additional delegates:
Written cancellations received before February 4, 2011 will be fully refunded; those received between February 4 - February 18, 2011 will be subject to an administrative charge of EUR 160. Thereafter, it is regretted that the full conference subscription fee will be due. However, a copy of the conference proceedings will be provided. Substitute delegates are permitted if notified in advance.
EUR 1950 EUR 1550 per delegate
For registrations received after February 4, 2011, fees will be: First participant: EUR 2150 Additional delegates: EUR 1700 per delegate
CONFERENCE BOOKING FORM We wish to register the following delegate(s): Title (Mr/Ms/Mrs/Dr) _____ First Name ________________________ Family Name __________________________________ Position ________________________________________________________________________________________________________ Email
_________________________________________________________________________________________________________
Title (Mr/Ms/Mrs/Dr) _____ First Name ________________________ Family Name __________________________________ Position ________________________________________________________________________________________________________ Email
__________________________________________________________________________________________________________
Company
_________________________________________________________________________________________________
Address
_________________________________________________________________________________________________
Telephone
_____________________________________ Fax
___________________________________________________
REGISTRATION FEES First delegate:
EUR 1950
EUR ____________
Additional delegate(s):
EUR 1550 per delegate
EUR ____________
Dinner, February 24, 2011:
EUR
EUR ____________
85 per delegate
EUR ____________
Total HOTEL CHOICE Hotel ______________________________ No of rooms: _____
Please note that all hotel charges are to be settled directly by the client
No of nights: _______
Date(s): ___________________________________________________________
Bio-Fuels
Starch Italics Starch Industry Overview
Commodities Buzz: US Can Meet Ethanol Demand Despite Tight Supplies; Says Deputy Secretary Soaring corn prices and tightening supplies will not shake the government's support for ethanol, a top U.S. Department of Agriculture official. Despite new government estimates projecting corn supplies next year will reach their lowest level in 14 years, USDA deputy secretary Kathleen Merrigan noted that historically, we're looking at a very strong corn crop.‖ The USDA estimates the corn crop is about 4% smaller than last year's record. Merrigan added that there is no way U.S. will meet federal mandates calling for 36 mio gallons of renewable fuel production by 2022 without relying on corn-based ethanol. I don't think we're at the point of pitting various interests against each other, she said at a conference on agriculture and rural development at the Chicago Federal Reserve. The livestock and poultry industries have fiercely opposed government support for ethanol, claiming it drives up the cost of feed, and food costs generally. Chicago Board of Trade corn prices climbed above USD 6 a bushel to a 27-month high this week before falling back. Almost 40% of the 2010 U.S. crop will be used for ethanol, according to USDA. (indiainfoline.com 11 November 2010)
Busy Time for Ethanol Producers Mason City - It's out of the field and making its way to elevators around the area. This year's corn crop is one of the better harvests for both north Iowa and southern Minnesota, and that's causing big business for those marketing the crop. The corn is starting to make its way to ethanol producers across the state. (Continued in next column)
Oct/Nov 2010
Busy Time for Ethanol Producers (Contd) About one acre of corn can produce more than 300 gallons of ethanol, and producers in north Iowa are keeping busy with all those kernels.
"As a nation almost a third of the crop gets turned into ethanol," said Scott Gudbaur, commodities manager. "We grind between 115 and 120 000 bushels of corn per day so that means we've got to take in about 160 000 average in the 5 day work week," said Gudbaur. He also said, "This plant opened as a 40 mio gallon plant and it was doubled 2 years ago so it's an 80 mio gallon plant that we're running like 110 mio gallons from,". The National Corn Growers Association says for every barrel of ethanol produced, 1.2 barrels of petroleum are displaced. At the beginning of this year there were 189 ethanol plants in operation in the United States. (kimt.com 11 October 2010)
Agricultural Waste to Biofuel Research Published in India Two scientists from Sri Paramakalyani Centre of Excellence in Environmental Sciences (SPKCEES) - affiliated to Manonmaniam Sundaranar University - have extracted fuel from agro-waste. (Continued on next page)
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Bio-Fuels
Starch Italics Starch Industry Overview
Agricultural Waste to Biofuel Research Published in India (Contd)
Agricultural Waste to Biofuel Research Published in India (Contd) Dr. Sathesh Prabhu has demonstrated simple pre-treatment methods to break down the complex agricultural wastes (carbohydrate sources) into a simple form, so as to enable the ethanologenic microorganisms to ferment them and produce ethanol. He states that about 250 - 270 litres of ethanol can be produced from 1 t of agricultural waste such as corn stover, rice straw and sorghum stover.
C. Sathesh Prabhu, a post-doctoral researcher of the centre, who is working on advanced research on bio-ethanol production from lignocellulosic agro-waste along with A.G. Murugesan, Professor, SPKCEES, says production of ethanol as an alternative fuel through cost-effective methods has become imperative due to global oil shortage and demand. Currently ethanol accounts for about 86% of total bio-fuel production and demand for ethanol as bio-fuel has steadily increased during this decade. However, the production of ethanol from sugar or starch from sugarcane and cereals respectively, impacts negatively on the economics of the process, thus making ethanol more expensive when compared to fossil fuels. Currently, agricultural waste in India is generally burnt at the field itself. The scientists claims that using more of the agro-waste for bio-ethanol production will not only suffice the fuel requirement, but will also boost the economy of the country, the researchers say. The production methods of ethanol from agricultural waste like corn cob, corn stalk and sorghum stover have been successfully standardised at the centre.
Prabhu's study highlights dual benefits in terms of managing the agro-residues and producing green and clean energy, thus decreasing the amount of greenhouse gases emitted into the atmosphere. (waste-management-world.com 26 November 2010)
EPA Announces Renewable Fuels Standard 2011 Requirements The Environmental Protection Agency (EPA) today announced its Renewable Fuels Standard (RFS2) requirements for 2011. The final requirements fall in line with the agency‘s proposed rule from earlier in the year. The total RFS2 requirement for 2011 will remain at 13.95 bio gallons. Of this amount, 12.6 bio gallons will be starch-based ethanol. The remaining 1.35 bio gallons will be a combination of biodiesel and other advanced biofuels, including a 6.6 mio gallon requirement specifically for cellulosic biofuels, which is lower than original targets established when the RFS2 became law. In response to the standard, Renewable Fuels Association (RFA) President and CEO Bob Dinneen issued the following statement: (Continued on next page)
(Continued in next column)
Oct/Nov 2010
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Bio-Fuels Bio-Plastics
Starch Italics Starch Industry Overview
EPA Announces Renewable Fuels Standard 2011 Requirements (Contd) ―The RFS was designed in part to ensure the evolution of America‘s biofuels industry is successful. By reducing the standard for cellulosic biofuels, EPA is accurately reflecting the difficulties cellulosic biofuel technologies have encountered in obtaining the capital needed to fully commercialize. However, being aware of this fact, EPA should have been and must be careful to keep cellulosic biofuel targets ambitious so as to stimulate the kind of investment these technologies need to finish commercialization.‖
Potatoes To Plastic A Carberry-based company continues to research new applications for potato-based bioplastic. Solanyl Biopolymers holds the license to technology that uses potato starch from the food processing industry to create a starch-based bioplastic that can be turned into semi-durable and disposable products. "If you look around and see how much plastic is around, there's lots of opportunity and lots of ways to use our material," says marketing manager Mavis McCrae.
In its comments on EPA‘s proposed rule, the RFA urged EPA to keep the overall RFS target at 13.95 bio gallons and allow other renewable fuels as defined by the RFS to make up the cellulosic biofuel shortfall in 2011. (cornandsoybeandigest.com 29 November 2010)
Mater-Bi distribution agreement with Thailand's Thantawan Italian bioplastics manufacturer Novamont (Novara) signed an agreement with Thai bag and flexible straw manufacturer Thantawan Industry (Bangkok) for the distribution of Mater-Bi in Thailand. Pointing to the advantages of producing bioplastics in Thailand, Novamont‘s new Business Development Director Stefano Facco did not dismiss the option that pending good sales of Mater-Bi, the Italian company could in future establish a plant in Thailand to produce Mater-Bi from cassava starch. (plasteurope.com 28 September 2010)
Oct/Nov 2010
So far, the company has used its bioplastic to make products such as office supplies and biodegradable greenhouse pots. "Anything that is semi-durable or disposable is a great application for the bioplastic," says McCrae. The starch is reclaimed from the waste water at potato processing facilities. It is then converted into a resin that can be heated and shaped through traditional injection molding. Solanyl was recognized earlier this month as the Emerging Agribusiness Life Science Company of the Year by the Life Science Association of Manitoba. (portageonline.com 22 November 2010)
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Bio-Plastics
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Researchers engineer genes of plants to grow raw materials for green plastic
Nigeria's Plastic Bag Dilemma (Contd)
Till date most plastic that we use in our day-today lives either comes from petroleum or coal. Recent advancements in technology have enabled manufacturers to come up with greener alternatives in the form of bioplastics that are made from polyester derived from corn, starch or sugar cane byproducts. Researchers at the Brookhaven National Laboratory and Dow AgroSciences have now come up with a new technology that can help produce green plastic without tapping into the food supply. The research team has engineered a relative of cabbage to grow the raw materials for producing eco-friendly plastic. The biologists wanted to make plants that can produce high levels of omega-7 fatty acids that can be used to make compounds needed in plastic production. The team experimented with genes from plants that are known to produce these acids in their seeds. After experimenting with a variety of plants including milkweed and cat‘s claw vine, the researchers had to engineer an entirely new metabolic pathway creating artificial enzymes to create seeds with high level of omega-7 fatty acids. These genetically modified seeds can be used as a renewable source of chemicals that can then be used to make greener plastics. (ecofriend.org 11 November 2010)
Nigeria's Plastic Bag Dilemma Across Africa, plastic bags blemish rural and urban scenery, damage ground water and soils, and choke livestock and fish, entangle birds and threaten animals in general. The UN Environment Program, UNEP, estimates that some 4 or 5 trillion plastic bags are manufactured worldwide every year, with only 1% being recycled. (Continued in next column)
Oct/Nov 2010
The work is being done at the Biotechnology Advanced Laboratory in Abuja, a part of the government‘s Sheda Science and Technology Complex.
Researchers are working to embed biodegradable starch in polymers, which are used to make plastics. Next, they identify microbes that would feed on the starch and cause it to break down completely into organic material, which would then be assimilated back into the soil. Prof Godwin Ogbadu is director of the Abuja-based Biotechnology Advanced Laboratory In South Africa, experts are developing plastic bags that dissolve into water and carbon dioxide in prolonged exposure to sunlight.In Mali, experts are working using them to make paving stones. Some governments are passing laws to ban or curb the use of plastic bags. Several economists argue that restrictions will lead to unemployment and revenue loss, while others say it will save millions of barrels of oil used in producing plastic bags. Dr. Shola Odusanya is deputy director on the Biotechnology and Genetic Engineering Laboratory, part of the Sheda Science and Technology Complex. He and his colleagues are working to reduce the amount of plastic waste with a process that breaks it down into powder. (Continued on next page)
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Bio-Plastics
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Nigeria's Plastic Bag Dilemma (Contd)
Wacker develops biodegradable plastics (Contd)
The Nigerian scientist says, Odusanya says the project will become marketable and will create new jobs. Litter bins for plastic waste will be set up nationwide, and people will be recruited to search through the dumps for plastics.
Suitable uses for these new polymer blends include materials for packaging, catering products, gardening and landscaping. The Vinnex® vinyl acetate-based polymeric binder system can be combined with renewable raw materials such as starch, polylactic acid (PLA) and polyhydroxyalkanoates (PHA) to create polymer blends with adjustable properties which can be modified to correspond to a variety of synthetic polymers.
In some countries, like Cameroon, waste management systems are inadequate and environmental laws rarely enforced. In those cases, the approach is different. An eco-friendly artist, Nereus Patrick Cheo, has recruited an army of street children. Together they rake through foul-smelling refuse dumps for plastics, which Cheo transforms into flower jars, beads, statues and muralsFor now, the bulging heaps of abandoned waste, especially plastics, remain. And so environmentalists are hoping Dr. Odusanya‘s project will be successful and can be used by scientists in other parts of Africa. (voanews.com 5 October 2010)
Wacker develops biodegradable plastics The Wacker Chemie AG has, in collaboration with customers, developed biodegradable plastic products made from powder binders and either starch or flour – as announced on the 8th of November 2010. In combination with renewable raw materials, Vinnex® polymeric binding agents make it possible to create polymer blends that – like commercially available thermoplastics – can be processed by injection molding, extrusion, vacuum forming or thermoforming. As a result, Wacker is now able to combine starch or flour with Vinnex® to create polymer blends that will biodegrade entirely under industrial composting conditions and that still can be processed in the same way as petroleum-based plastics. (Continued in next column) Oct/Nov 2010
Like commercially available thermoplastics, biopolymers obtained in this way and containing between 5 and 30% Vinnex® can easily be processed by injection molding, extrusion, vacuum forming, thermoforming and calendering. In addition, the formulations of these polymer blends can be adjusted so that they are processable with standard (unmodified) thermoplastic equipment, making additional investment unnecessary. The greatest advantage of these innovative new polymers, however, is their biodegradability: composting studies have shown that blends containing Vinnex® break down within 180 days under industrial composting conditions, as stipulated by DIN EN 13432. The option of using flour as the primary constituent is yet another advantage of these new polymers: flour can be obtained in fewer processing steps than starch, and that translates into less energy and a significantly more sustainable carbon footprint. Wacker already possesses patents for modified starch polymers. Because they are biodegradable, these new polymer blends are especially suitable for use as food packaging materials, disposable dishes, shopping bags and trash bags, as well as for injection-molded agricultural products such as tomato clips and flower pots. (jeccomposites.com 11 November 2010)
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Bio-Plastics Others
Starch Italics Starch Industry Overview
NYU researchers find corn starch solution can help shape solid materials
Cardia makes bags by blending CO2 with starch a rdia makes bags by
New York University researchers have developed a method to shape solid materials using a corn starch solution. The process, devised by researchers in NYU's Courant Institute of Mathematical Sciences and Department of Physics, offers a potential technique for material cutting and manufacturing processes. Their work is described in the journal Physical Review Letters.
Melbourne packaging technology company Cardia Bioplastics has developed a biodegradable plastic bag created from a blend of CO2 emissions and starch. Chairman Pat Volpe said the company has successfully completed a first production run of the carrier bags, known as CO2S – or, carbon dioxide plus a starch based renewable resource. ―This is the first time CO2 emissions have been transformed in this way and the development has the potential to revolutionise the production of bioplastics around the globe,‖ he said.
Manufacturers use a variety of methods for shaping solid materials, ranging from laser cutting to high-speed jets of water. While altering the shape of such materials, such as glass, metal, or stone, is relatively straightforward, doing so with precision often proves challenging. With this in mind, the NYU researchers sought to create an alternative, but rudimentary, method to shape solid materials in a precise fashion. To do so, they considered a process involving a corn starch solution. They submerged a motor-powered, plastic sphere through the cornstarch solution toward a containing wall made of modeling clay, stopping just short of the wall. Using the force of the sphere to harden the cornstarch solution, the researchers were able to make indentations in the wall of modeling clay. In addition, they were able to do so with a degree of precision by taking into account speed, force, and geometry. By moving the sphere at fast speeds through the solution, they created large depressions in the clay; by slowing it down, they created smaller depressions. (eurekalert.org 4 Nov 2010)
Oct/Nov 2010
blending
C2 with starch
According to the company, CO2 emissions are captured prior to being released into the atmosphere, transformed into a polypropylene carbonate (PPC) polymer and blended with a renewable resource (starch) to produce the Cardia Bioplastics CO2S resin. This product is then used to produce a completely biodegradable carrier bag. Volpe said this development promises to offer packaging alternatives globally, with the company now in discussion with several parties interested in the technology.―Our new patent pending blending technology used to manufacture CO2S compostable product will complement the existing Cardia Bioplastics portfolio,‖ Volpe said. (prw.com 26 October 2010)
Southern Minnesota Beet sugar cooperative Minnesota is using a specialty crop, like sugarbeets. It takes unique and expensive equipment to harvest the beets, which would have no use or value in producing other crops. That means a well-organized harvest among individual growers and a coordinated sugar processing season are in every sugarbeet farmer's best interest. (Continued on next page)
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Others Regional Language News
Starch Italics Starch Industry Overview
Southern Minnesota Beet sugar cooperative (Contd)
These are the news derived from regional publications,
translated
using
online
tools,
hence the medium quality of translation.
Meanwhile, the huge sugarbeet processing plant at Renville would be too costly for any individual farmer or even a small group of farmers to build and operate on their own. The only alternative would be an enormous, vertically integrated farming operation that would not be consistent with Minnesota's family farm business model. Farms are individually and family-owned enterprises in Minnesota. Through cooperation, these farms can engage in value-added business activities that increases rural wealth, provides jobs, and retains a higher portion of the consumer food dollar at home. Specialty nut, fruit and vegetable crop producers in other parts of the United States operate in much the same way as Minnesota and North Dakota sugarbeet farmers. The uniqueness of the costly sugarbeet equipment, however, makes our sugar industry more like a special potato starch cooperative in northern Holland and adjacent areas of Germany. These farmers grow potatoes, but not the kind you buy in stores. The world's pharmaceutical companies buy the starch this crop produces because it's a highly-digestible material used in making medicine capsules. Land costs in the Netherlands would make growing potatoes for the retail market nearly impossible. The innovation and business savvy of the Dutch starch cooperative, however, make the Dutch and German potato farmers among the most successful in the world by producing extreme value-added products. (tcdailyplanet.net 23 November 2010)
Oct/Nov 2010
China Strive to achieve the 3 mio t Plant Polyols Capacity Dacheng Group is the largest corn intensive processing group in China, the annual corn processing capacity is 4 mio t, with more than 200 sorts of products, which are sold both at home and abroad. 75% of the product is feeding stuff and feeding additives, which can sell back to the agriculture as well as support the rapid development of animal husbandry; another 20% is food stuff, which includes amylose and corn oil. The Polyols Plant takes up 5% of the product, which take the place of the oil chemical products. During the 13 years, Dacheng Group has two items ranking first in the world, one is the lysine production capacity and technology, the other is the innovative technology and production as well as the sales of the plant chemical Polyols, and all of the techniques are intellectual property rights. In 2009, the global lysine sales was not more than 1 mio t, Dacheng Group make up for 60%, with 570kt sales; the group use the botanical glycosides as raw materials of the Polyol plant, they produce the chemical materials that can replace oil, by using the hydro cracking technology. The products are widely developed and applicated by the customers at home and abroad. The sales are 3kt to the USA and 1kt to the Europe every month. Last year, Dacheng Group successed in the technique to produce Polyols by using the diversification of non-food plant sugars as raw materials and take corn as material to produce polyols plants. (Continued on next page)
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Regional Language News
Starch Italics Starch Industry Overview
Strive to achieve the 3 mio t Plant Polyols Capacity (Contd)
Output Reduction is not the Main Factor of the Cassava Starch Price
This year, Dacheng Group strives to develop the straw sugar, reduce or stop using the corn as the material in producing Polyols. By the end of the year, Dacheng group will build an annual output of 20kt corn straw sugar-producing model plant. In 2011, five 100kt production plants will be set up in Changchun area; and in the year 2012, there will be another 5.
Since the fresh potato enter the market, the rate of cassava production cut is 20-30% in some areas in Guangxi, some places even up to 50%. Since the fresh potato of 2009-10 season launched a heavy volume on the market in Guangxi, the prices continue to go higher, the flour containing rate is 26-27%, purchase price of the headland fresh cassava is CNY 560-580 per t. Correspondingly, the cassava starch prices also follow higher.
The 5 carbon sugars and the 6 carbon sugars making out of the corn straw are of high utilization and low cost, meanwhile, the production process is clean green and energy. For the time being, 1 t sugar can be made out of 2.5 t corn straw in Dacheng group, which can make a 67% farmer income increase, and turning the waste into treasure. The straw is CNY 600 per t ;and the corn is CNY 1500 per t. Dacheng group not only successes in making the inexhaustible straw resources a replacement of the oil resources, but also solves the problem of handling the straw, fit in with the green and lowcarbon economy, as well as ensuring the farmer‘s increase income, supporting the agriculture development. Dacheng group has future plans of building the 3 mio t Polyol plant project and 3.5 mio t Straw Sugar project. The group is committed to make good use of the plant resources, strive to develop the biological manufacturing, and make a significant contribution to the industrial structure adjustment of Jilin province. (jlrbszb.chinajilin.com.cn 16 October 2010)
Oct/Nov 2010
Thailand's cassava has kept the issue of production cut signal, the expected 2009-10 season cassava production in Thailand was only 22.21 mio t, far lower than the pre-production of the 27.76 mio t before the pests‘ out breaking. Therefore, cassava starch price is not bearish but bullish, the overall market to maintain the shock upstream. The whole planting area of cassava in Vietnam remain stable about 45 mio hectares , strive to achieve the average 23-24 t cassava per hectare yield of planting area by 2015, and to succeed by using enhanced growing techniques, quality seeds, plant protection to support the development and investment. Vietnam cassava has switched into a value-added crop. Vietnam Ministry of Trade and Industry has been identified cassava products as the Vietnamese agricultural export pillar products. In recent years, the domestic market has the increasing demand for the imports of cassava products, domestic cassava starch mitigation on the domestic market supply and demand gap is just drop in the bucket, and 60% of the cassava starch demand has to be made up by the import. China is a country that demands for cassava products in a great quantity. Every year China imports more than 600 t dried cassava chips and cassava starch. (Continued on next page)
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Regional Language News
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Output Reduction is not the Main Factor of the Cassava Starch Price (Contd) At present, China is the main export market of various cassava products of Vietnam and Thailand, accounting for more than 90% of the cassava exports total amount. Many countries in Asia, Indonesia, Cambodia, have gradually participated in the cassava product competition. Thai deputy spokesman W Lak poor in prime minister's office disclosed that the Cabinet agreed to sale 14 mio t flour to the China Marine Shipping Agency Lianyungang company through the official form (G2G), commensurate with the price of 10 660 baht per t, for its price is higher than other companies. This sale of tapioca flour is to reduce the risk of deterioration of goods, piece goods by the Bay has reached 16 months. According to regulations, the shipment should reach the destination after signing the contract within 2 months. Therefore, these goods should be in shipment before July. We all know that these powders have been stored for 16 months, and there will be certainly some problems in quality, only the enterprises that are in less demanding on the quality will accept the powder. In Nanning, the cassava starch price is currently maintained at CNY 3700-3750 per t (tax included), there are gaps in the price, but there are also great advantages in the quality. In the big situation of prices up-going, it is very difficult to expect these powders to be sold at a low price. Learned form Sun, the Secretary of China Starch Association, the domestic demand for cassava starch is in exponential growth. The domestic cassava starch is failed to meet the shortfall to a large extent. Overall, output reduction is not the biggest factor of the cassava starch price; the demands are the main cause of the high price. (frbiz.com 12 November 2010)
Oct/Nov 2010
Continuation of known environmental needs of bio-plastics At present, the production of Bio-plastic is mainly concentrated in North America, Western Europe, Japan and other developed countries and regions. Freedonia Group predicts that production capacity of China's bio-plastic products will exceed 10 mio t each year by 2013. Brazil will become the world's major producer of bio-plastics by 2018. By 2025, Asia will be the leader in bioplastics market, will cover at least 32% of worldwide market, then Europe by 31%, America by 28%. Domestic corporation will be forced to work for overseas company. According to the introduction of one Secretary General, Wong yunxuan, from the China Plastic Association degradation committee, there are two reasons for the status of working for foreign corporations: First, Developed countries have strict regulation for recycling and treatment for abandoned traditional plastic. Under the influence of environmental awareness and lawful sense more consumers were willing to accept bio-green plastic, so the market is growing, enterprises have more profit. Second, because the high cost for most of bio-plastic products, high price, lack of promotion under China's policy environment, It is difficult to promote Bio-plastic in China. Due to the differences between international and domestic markets, domestic companies are willing to product on aboard. Another important factor is that only a few companies such as Nature Works in America, BASF in Germany besides China can industrialized product bio-plastics. At present, Although some foreign companies are planning to increase the capacity of new production, but in the past few years, production in Occident and Japan increased very slowly. Also there is only a single species in most countries, Such as the United States, Germany, Japan, Italy etc. (Continued on next page)
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Regional Language News
Starch Italics Starch Industry Overview
Continuation of known environmental needs of bio-plastics (Contd)
Continuation of known environmental needs of bio-plastics (Contd)
Contrast against developed countries from the new century, China's domestic bio-plastics industry has developed rapidly. By 2007, production of bio-plastic reached 80kt; by 2009 surge to 150kt, nearly doubled in two years. Total output of bio-plastics reached 250kt in 2010. Currently, there are more than 20 enterprises could product on large-scale in China. the production on the scale increase from a few thousand tons to million tons.
Bio-plastics have been achieved extraordinary effects in some special applications field. The demand is increasing for bio-plastics based on the demand of reproducible and the Eco-friendly goods. Meanwhile, due to the price of crude oil and natural gas continued to rise, bio-plastics become more competitive than petroleum based resins. the polylactic acid (PLA), starch-based polymer and polyhydroxy alkanoate (PHAs) are 3 main kinds of bio-plastic products.
Also more than twenty universities and institutes specialized in researching and developing in this field. Meanwhile, china could product most Bio-plastic species in the worldwide, some species, such as glycolic acid acid copolyesters (PHBV), poly butylene succinate (PBS), carbon-dioxide, propylene oxide copolymer (PPC) and are unique in China. Due to above reasons, all of the Bio-plastic were produced into finished good directly, and then almost all of the product were exported to other countries.
In the nature, abundant bio-based raw materials such as glucose, fructose, xylose, arabinose, lactose, sucrose, starch etc, can produce Bio-plastic, such as PLA, PHA and so on. Because the source of bio-plastics is from plants rather than fossil fuels, it saves a lot of energy, in addition, the entire production process reduced CO2 emissions.
The demand of the low cost petroleum-based plastic has become the key to develop the reproducible material. Many reproducible chemicals company indicated that the cost of reproducible chemicals, especially Bio-plastic, must low than traditional plastic in order to survive in market in Bio-chemicals eastern summit,which held in Boston in Massachusetts of the United States in September, The official of Europe Bio-plastics Association said the petroleum-based plastics are still relatively cheap, but the bio-plastic products will be applied in more fields in the next few years. The price of bio-plastics will catch up with the conventional plastics. (Continued in next column)
Oct/Nov 2010
Western Europe is the world's largest regional, which has the most demand for bio-plastics, the demand in 2008 cover around 40% of the worldwide. Strong demand growth of Japan, the Asia-Pacific region will become the world's fastest-growing region, it will share the market with Western Europe by 2013, the other region of the world, such as Latin America and Eastern Europe the demand of bio-plastics will continue to grow. At present, most of bio-plastic products were exported to other countries, more than 90% of the raw materials and products are exported to overseas markets. A few were sold in the domestic market, it is estimated that in 2009 domestic consumption of bio-plastics is less than 1 mio t. Domestic bio-plastics corporation were forced to work abroad. (3158.com 11 November 2010)
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Regional Language News
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November 17, Dalian corn fell sharply
November 17, Dalian corn fell sharply (Contd)
Wednesday, subjecting to suppress from the policy side and the financing side, and dragged by the surrounding market, the price of Dalian corn fell sharply, the main 1109 contracts closed at CNY 2,288 in the limit, down CNY 74. For the traders worried about the sluggish demand, the price of CBOT corn future contract in December is 525.75 cents per bushel, down 0.75 cents.
Operating Suggestions: Due to the continuous decline of the surrounding market, the price control measures on agricultural products to be released by the government and the severe punishment on the speculation and hoarding behavior of agricultural products (especially cotton and maize), the market panic appears again and price of Dalian corn will further slide.
In the spot market, traders‘ purchase price of corn in Jilin Yumu is CNY 1480 per t, with water 30%. In rural areas of Heilongjiang, purchase price is CNY 1380 per t, with water 30%. In Zaozhuang of Shandong, purchase price of new corn is CNY 1960 per t, with water 15%.
Right now, the price in the spot market continues to rise, which will limit the downward adjustment of corn in Dalian. In medium and long term, corn market fundamentals remain strong. But in short-term, dragging by the surrounding environment, along with changes in policy, the market may oscillate to lower. The proposed operation is to sell when the market rallies in short-term, and pay attention to the downside 2250 line support. (82158.com 18 November 2010)
In Linyi of Shandong, eel feed manufacturers‘ purchase price of wind sifting corn CNY 2,120 per t, with water 15%. In Jing County, Hebei, traders‘ purchase price of new corn is CNY 1920 per t, with water 15%. In Ningbo, of, the site price of new corn from Northeastern China is CNY 2240 per t, with water 15%, up CNY 20 per t. In Henan Anyang, listed purchase price of new corn (net pay) is CNY 2 000 per t, with 15% water. In Chengdu, the sale price of new corn from Northeastern China is CNY 2260 per t, with water 15%. In Hefei, site price of corn from Heilongjiang is CNY 2200 per t, with water 15%, up CNY 40 per t. In Dalian, price of corn trimming is CNY 2080-2100 per t. In Guangdong Harbour, the price of high-quality aged corn is CNY 2220-2240 per t. In Qingdao, eel feed manufacturers‘ purchase price of new corn is CNY 2080-2090 per t. In Shanghai, the latest arrival price of the new corn from Northeastern China is about CNY 2180 per t or above, keeping unchanged. (Continued in next column)
Oct/Nov 2010
Price trend of the recent situation in Jilin Maize In Jilin Province, the climatic changes has resulted in fluctuations in maize price. Huanglong and COFCO Biochemical Gongzhuling company listing price of corn is still CNY 1 800 per t, only to maintain the volume on the acquisition of hundreds of tons. In Jilin area, corn prices are rising. The local price of corn deep processing enterprises are as follows: Medium CNY 0.76 per kg, about 30% water, the theoretical calculation of the normal parity dry off the cost of CNY 1920 per t, the acquisition of the amount of less than normal. Jilin Dehui region's new corn prices remain strong, the local price of corn deep processing enterprises to medium CNY 0.91-0.93 per kg, between about 14% water, the purchase price remained firm, the acquisition of the amount of less than normal. (Continued on next page)
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Regional Language News
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Price trend of the recent situation in Jilin Maize (Contd)
Bio-plastic manufacturers industrial R&D Speed(Contd)
Jilin Nongan Maize offer stable. Offer individual traders in the CNY 0.75-0.76 per kg, between 25-27% moisture, farmers reluctant sellers psychological presence, coupled with the recent rain and snow weather and transportation, the acquisition of less. In this case, the new season of maize in Jilin is expected to continue to delay the market. (82158.com 17 November 2010)
Lower cost of petroleum-based plastic substitutes, demand has become the key to the development of renewable raw materials. Many renewable chemicals company in the United States in September, held in Boston, Massachusetts, bio-based chemicals that the eastern summit, to survive in the market, renewable chemicals, particularly in the cost of plastic must be less than traditional plastic.
Bio-plastic manufacturers industrial R&D Speed News of the new network in the world states that the use of bio-plastics is still accounted for only 1% of 230 mio t. But with regard to raw materials for renewable bio-chemicals, new plastics will soon be universal. Some biodegradable plastics such as polyethylene lactic acid (PLA), polyhydroxy alkyl esters (PHA) and starch-based blends are used by consumer goods, packaging and food service industry for more applications. Analysts pointed out that the demand is increasing for consumer goods on bio-based plastic products, these new demands are prompting manufacturers to develop the existing production from renewable raw materials, plastic or some new technology. Some renewable chemicals company has targeted up to 1.3 trillion dollars (about 933 bio euros) in the global polymer market and raw materials to be used are succinic acid, acrylic acid, levulinic acid, sorbitol, ethylene, ethylene glycol, butanediol, adipic acid, furan, propylene glycol and glycerol.
European Bioplastics Association, said the conventional petroleum based plastics are still relatively cheap, but the bio-plastics in the next few years will be applied to more sectors. In the field of consumer electronics and automotive, bio-plastics huge potential applications, if some of the bottlenecks can be a breakthrough product is the price of bioplastics and conventional plastics can be achieved a considerable level. Durable plastic downstream users are waiting for the new industrialization of renewable-based plastic. After years of development, the cost of biodegradable plastics industry is constantly reduced. U.S. manufacturer NatureWorks PLA resin production company Ingeo has already reached a certain size, cost and performance can be comparable with petroleum-based plastics. (ccin.com.cn 3 November 2010)
Netherlands-based specialty chemicals company DSM and starch derivatives producer Roquette of France has planned to set up various joint venture owned 50% of Reverdia company, from the PBS production of bio-based succinic acid derivatives. (Continued in next column)
Oct/Nov 2010
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Vietnam The situation of production and consumption of cassava in Vietnam and the world In Vietnam, cassava has quickly shifted from food crops to cash crops with high yield and cassava production increased rapidly. In 2008, China had produced a million tonnes of ethanol and imported cassava from neighboring countries. In Thailand, many ethanol plants using cassava was built in 2008. Indonesia plans to use cassava to produce ethanol mixed into gasoline at the rate of 5% mandatory starting in 2010. Countries such as Laos, Papua New Guinea, the island Phigi, Nigeria, Colombia and Uganda are also working on testing for ethanol production. Area, yield and production of cassava in the world has steadily increased from 1995 to present. In 2008, world cassava production reached 238.45 mio t of fresh compared to 223.75 mio t in 2007 and 161.79 mio t in 1995. Most cassava producing countries are Nigeria, followed by Thailand and Indonesia. Countries with the highest yield of cassava India (31.43 t per ha), followed by Thailand (21.09 t per ha), Vietnam ranks tenth on cassava production in the world (9.38 mio t). In Vietnam, cassava is cultivated in most provinces of the agro-ecological zones. Most cassava area in the northern and central coast (168.8 thousand hectares). Highlands is the largest cassava producing areas of the country Monday. In 2008, the floor area of the Highlands to reach 150 thousand ha, average yield of 15.7 t per hectare production of 2.35 mio t, lower than the South East (23.74 t per ha and to some 69 mio t). (Continued in next column)
Oct/Nov 2010
The situation of production and consumption of cassava in Vietnam and the world (Contd) Seven months of the year, the country exported 2.66 mio t of dried cassava (manioc alcohol) and starch turnover reached 406 mio, up 4.4 times in volume, 2.8 times the turnover over the same period last year. With the above results, the Ministry of Industry and Commerce has ranked cassava in major export commodities in 2009. When the State program operated NLSH, ethanol plants will consume a huge amount of cassava. Expected in 2012, ethanol production will consume 16% of cassava production in 2015 accounted for 35%, 41% in 2020, up 48% in 2025. The calculations are based on projected gasoline demand by 8.5% per annum in 2012 to apply E5, E10 application in 2015, cassava production increased 5% per year. The formation and development of the industry structure changed NLSH market of Vietnam in ways that are beneficial to agriculture and rural aspects: With more than 50% of production is exported, they are put into ethanol production, then put petrol, oil consumption in the domestic market, cassava will be the input and the first stage of the value chain NLSH market, exist parallel to the gas market, oil for domestic needs. In the value chain to new markets, the cassava is used as raw materials for ethanol processing plants, which are then mixed, and retail distribution to consumers in the country. Thus, cassava products will no longer depend on supply and demand and price fluctuations of foreign markets. Instead of agricultural products will enter the market of domestic energy consumption and steady growth every year. (Continued on next page)
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The situation of production and consumption of cassava in Vietnam and the world (Contd) The governments of Thailand and the Philippines impact on agricultural production through the operating cost formula NLSH (Biofuels) market petroleum to stabilize the prices of raw materials from agriculture (sugar cane price and cassava). This will be an important tool and easy to implement State policies to support agriculture and rural farmers.
Increase cassava production for export: Not necessarily happy Sources from the Ministry of Trade and Industry said that exports of cassava and cassava starch to the water market in 10 months of 2010 reached 418 mio dollars to 65kt, up 78% on prices compared with the same period last year. However, these types of cassava exports fell 53%.
NLSH development will increase investment in regional and remote areas of rural Vietnam. Dependence on raw materials from plants NLSH will motivate building close links between factories and farmers, promoting the interests of both parties. While implementing the ethanol project, the National Oil and Gas Corporation of Vietnam has advocated the development of stable material on the basis of support for farmers to ensure stable income. Ministry of Agriculture and Rural Development Conference sustainable development of cassava (July 12-2009) has also implemented the model direct link between factories and farmers NLSH have the support of governments and scientists agricultural education. Thus, ethanol can see the program as an opportunity to realize the objectives of agricultural development, rural livelihood and rural poor, improve the added value of agricultural products and strengthen links Union workers and farmers. (cropsforbiofuel.ning.com 12 November 2010)
Oct/Nov 2010
Director of import and export, said Phan Van Chinh, now the price of Vietnam's cassava exports depend heavily on fluctuations of world market prices. Therefore the growth due to price fluctuations as in the recent past is not the direction of sustainable development. In 2009, Vietnam has exported 3.3 mio t, worth 574 mio dollars. Ten months of this year wearing the export situation is also achieved 418 mio with 65kt. In which more than 90% of production is exported to China, with export value is completely dependent on foreign countries. This result is because the Chinese market is gradually restored. This is a very significant figure in the context of difficult market today. According to estimates by the Ministry of Trade and Industry, with a total area of about 510 000 ha, average yield of 18.7 t per hectare, this year's total national cassava production is estimated at about 8.1 to 8.6 mio t. (Continued on next page)
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Increase cassava production for export: Not necessarily happy (Contd) Currently, Vietnam is ranked tenth in the world for production of cassava (7.71 mio t). According to Nguyen Tri Ngoc, Director of Crop Production Ministry of Agriculture and Rural Development said: Cassava is a crop that agriculture was not an encouraging development, but the cassava growing area for several years now increasing at an alarming rate.
In 2005, the cassava growing area of the country at 270 000 ha, has now soared to nearly 2 times – 510 000 ha. Calculated, to exceed 135 000 ha. compared with cassava development planning. In particular, the highest increase with 16 000 ha Gia Lai, Dak Lak near 6 000 ha, Kon Tum on 5 000 ha. In essence, this growth is not encouraging. Vietnam now has about 60 processing plants cassava industrial scale (capacity 3.8 mio t of fresh cassava tubers). Each year, Vietnam now produces about 800 to 1 200kt of cassava, of which over 70% of exports and nearly 30% of domestic consumption. Cassava export products of Vietnam are mainly starch, cassava and cassava flour. The main markets are China, Taiwan, Japan, Singapore, South Korea. Investment processing plant bioethanol is a large potential user. (tamnhin.net 4 November 2010)
Oct/Nov 2010
Brazil Plastic of maize, sugar cane and seaweed The demand for biodegradable plastics is growming in brazil. The country imports 500 t per year of PLA- an extracted polyester of the starch of the maize that serves of base for the production of the bioplastics. It is considered as world-wide giants of the sector.
The Cereplast, that has headquarters in the United States and produces 48kt of PLA per year, studies to install a plant in Brazil, of eye in the increasing demand for the product, that is used to make packings, staple fibres of clothes and carpetings and dismissable material, among others applications. The PLA emits 1.3 kilo of carbonic gas for each kilo of produced plastic, against 3.2 kilos produced for the plastic of PET bottles, according to studies carried through in the exterior. Reinaldo Azevedo, representative of the Cereplast in the Country, guarantees that the company is intent to the Brazilian demand and to the maize production, sugar cane-of-sugar, and soy of the Country and also is talking with seaweed producers of Ubatuba, for possible use of this raw material. (biopol.free.fr 10 November 2010)
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Brazil Oil and Novozymes Join Together to Develop Cellulosic Ethanol
Brazil Oil and Novozymes Join Together to Develop Cellulosic Ethanol (Contd)
Petrobras and Novozymes today reached an agreement to jointly develop a new technology path of producing cellulosic ethanol based on bagasse. The agreement includes the exploitation of enzymes and enzymatic hydrolysis of bagasse cellulose ethanol production process. Brazil's sugar cane cultivation and processing is well developed, with rich bagasse resources, which provides a sufficient supply of raw materials for the development of cellulosic ethanol industry. As the world's largest sugarcane producer, Brazil produced 600 mio t molasses per year from sugar cane, can be converted to 27 bio liters of ethanol (the equivalent of 70 mio gallons). It is predicted that the maturation of cellulosic ethanol industry will enable Brazil to increase 40% ethanol yield without adding the sugarcane planting area. Novozymes has been engaged in the enzymatic hydrolysis of bagasse-based ethanol. Enzyme can break down plant fibers, including corn stalks, wheat straw, wood chips, bagasse, etc., the sugar broken down can be fermented into ethanol. As the world's largest enzymes manufacturer, Novozymes R&D for the production of cellulosic ethanol enzyme products since the year 2 000, has twice obtained the total amount of up to 2 930 mio in project development assistance of U.S. Department of Energy. On the strength of the technology reserves in the field of enzyme developing, Novozymes successfully decreased the cost of the required enzyme of producing cellulosic ethanol by about 80% for in the past 2 years, to the current 50 cents per gallon. (Continued in next column)
Oct/Nov 2010
Novozymes is now cooperating with the world biofuels industry leaders to accelerate the process of cellulosic ethanol production technology development and implementation, and to make a further reduction of the cost of enzymes. Since 2006, Petrobras began to investigate the process integration of ethanol out of bagasse based on the biochemical methods. (finance.ifeng.com 15 october 2010)
Brazil's ethanol industry is driving in the fast lane This year, because of the climate change, the sugar price is rising. As well as the number of flexible fuel vehicles (FFV) in which the high percentage of ethanol blended fuels can be used continues to increase, Brazil's ethanol industry, the world's largest ethanol exporter, is walking out of the shadow of the financial crisis and accelerating the pace of cooperation and acquisitions. A number of alcohol as raw materials to produce green polyethylene project is also underway. Analysts said because of the boost in sugar price, the price of ethanol is becoming higher and higher. Earlier this year, it hit a 30-year high. The profits of ethanol refinery factories rebounded sharply. This year, the abnormal dry weather continued in the main producing areas of sugarcane in southern Brazil, which caused serious damage to the production of sugar cane. Therefore, the price of ethanol is rising. According to data from the Brazilian Sugarcane Industry Association (UNICA), from April to the middle of September this year, the sugar export revenues of Brazil reached USD 6.8 bio, an increase of 64% comparing with that of previous year. (Continued on next page)
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Brazil's ethanol industry is driving in the fast lane (Contd)
Brazil's ethanol industry is driving in the fast lane (Contd)
Cosan, the largest sugar and ethanol producer in Brazil, estimates that the global surplus of sugar from 2010 to 2011 is 4 mio t, well below 7 mio t forecasted by the company in the beginning of this year. Cosan claims that, because supply is tight, the international sugar prices will remain high, to be higher than the 30 cents per pound.
Itau BBA, a investment bank in Brazil, also forecasted earlier this year that, by 2015, the top 5 will account for 40% of the national total production. While in 2005 and 2010, the top 5 ethanol groups in Brazil only held 12% and 27% market share. After taking over Santelisa, which is a native company of Brazil, the French trade giant Louis Dreyfus became Brazil's second-largest ethanol group. While the largest one is the energy and chemical giant Shell, after announcing earlier this year, financing USD 12 bio to cooperate with Cosan. French sugar group Tereos as well as Bunge, a leading enterprise from U.S, are also the ranks of largescale ethanol producers in Brazil.
According to UNICA's latest statistics, due to high sugar prices and growing ethanol demand, the demand for Brazilian ethanol kept some growth in the stability this year. From April to mid-September, the demand for ethanol reached 11 bio liters- 2 bio liters per month, increased by 25% comparing with 1.6 mio liters per month in 2008. The profits of the companies have increased significantly. Accelerating the pace of integration Market participants pointed out that, influenced by the financial crisis before, a lot of small and medium-sized enterprises in ethanol production and distribution in Brazil closed down. After this round of rising prices, the reshuffle pace of Brazil's ethanol industry will be accelerated. In the coming years, the business model of Brazil's ethanol industry will be changed from the family group into a multinational-holding corporation. According to the incomplete statistics from the information research firm Global Futures FO Licht, in 2009 alone, there were 60 restructuring in Brazilian ethanol companies, involving 100 sugarcane processing plants. Pliny, the president of Brazil's ethanol and sugar consulting firm Datagro, estimates that in the next 5 years, the top 10 domestic ethanol groups in Brazil's will hold 45% of 600 mio t of sugarcane market. (Continued in next column)
Oct/Nov 2010
Petrobras also seized the opportunities to accelerate the expansion in the bio-ethanol industry. In December 2009, the company spent 84 million USD to acquire 40.4% of the share of Total Agroindustria Canavieira. Most recently, it signed a cooperation agreement with another ethanol company. Currently, the ethanol production capacity of Petrobras is close to 900 million liters per year. In addition, Petrobras is planning to cooperate with the Japanese companies Mitsui Group and Brazilian Calmage Correa group, to spend USD 1.1 bio to build an ethanol transportation pipeline system, which is 542 km long, with the transportation capacity reaching 129 bio liters of ethanol per year. According to the latest investment plan, Petrobras also plans to invest 3.5 bio in the next four years in the field of bio-fuels. By 2014, its ethanol production capacity will be tripled, to become the main exporters of ethanol in Brazil. 47% of Brazil's energy comes from renewable energy sources, of which 18% is from ethanol produced by sugarcane. (Continued on next page)
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Brazil's ethanol industry is driving in the fast lane (Contd)
Rice harvest could be down 20% (Contd)
Major petrochemical companies are producing polyolefins by using ethanol from sugarcane as raw material. In the end of September 2010, the green ethylene plant of Brazil's largest petrochemical company Braskem put into production, which produces 200kt per year and is the world's first ethylene production unit using ethanol from sugarcane as the raw material. Braskem has also decided to build a polypropylene unit with the production capacity of 10 mio t per year by using ethanol from sugarcane, which will be put into operation in 2013.
Mr Prasit said rice prices are still in a favourable direction. The price of paddy is currently 9 000 baht per t, up from 8 500 baht, due to concerns over production both inside the country and abroad, since other rice-producing countries including Vietnam, India and Pakistan have also been hit by natural disasters.
Dow Chemical Company, Solvay in Belgium and Brazil Unigel have expressed their interest in Brazilian green chemical projects using ethanol as an alternative raw materials. Solvay plans to use ethanol as raw materials to produce polyvinyl chloride, and Dow Chemical plans to build a green polyethylene plant with the production capacity 350kt per year. (ccin.com.cn 12 November 2010)
Thailand Rice harvest could be down 20% This year's rice production is expected to drop by about 20% due to the massive flooding in the country, Thai Farmers Association president Prasit Boonchoey said on Thursday. Mr Prasit said the country usually produces about 10 mio t of rice paddy per year. The extensive flood damage to rice fields is likely to cut the crop by about 20%. The drop in production would not cause shortages of rice, either for domestic consumption or export, because the country still has a considerable amount of rice in stock. (Continued in next column)
Oct/Nov 2010
Therefore, the price may rise to as much as 10 000 baht per t, but not as high as 15 000 baht as some people may hope, he said. Mr Prasit said the government's plan to provide financial relief for flood-hit farmers at the rate of 2,098 baht per rai was good, but authorities should watch out for people trying to make dishonest gains from this measure. (thairiceexporters.or.th 11 November 2010)
First price index for rice industry launched Kasikorn Research Centre has launched the country‘s first rice index to reflect prevailing market conditions. The KR Price Index: Rice is a weighted calculation based on rice varieties, incorporating prices through the entire supply chain including growers, mills and exports, and comparative prices among rivals, including Vietnam and the United States. KResearch manager Paka-on Tipayatanadaja said yesterday that 2005 was the index‘s base year. Clearer world and domestic rice situations through these indices will allow the government to formulate its rice stock policy better, and millers and farmers to have clearer pictures of business and planting conditions, said Wiwan Tharahirunchote, KResearch‘s Executive Chairman. (Continued on next page)
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First price index for rice industry launched (Contd)
Researchers develop biodegradable seedling pot (Contd)
The indices for the selling price of growers and exports were at 193.55 and 143.79 in October, up 28% and 12.5%, respectively, from the same period last year. The rises came from limited world rice supplies and rising demand for rice after crop damages, due to volatile weather conditions, in the world‘s two major rice producers, Pakistan and China, Paka-on said. The index for the wholesale price at mills also rose 12.4% to 171.22 in October, because of higher purchases by exporters. In October, Vietnam‘s rice was priced higher than Thailand‘s after it increased minimum export prices by three times this year, Paka-on said. The world and domestic rice prices could rise further during the rest of this year thanks to rising global demand and falling world production, due to fluctuating weather conditions, she said. Prices of the country‘s fragrant and glutinous rice could enjoy their upward trend throughout next year, while the white-rice price could continue to rise only in the first quarter, she said. (thairiceexporters.or.th 11 November 2010)
Taiwan Researchers develop biodegradable seedling pot A Tatung University research team in partnership with local Grace Biotech Corp. has developed a seedling pot made out of 100% biodegradable plastic that breaks down completely within six months of being buried in the ground. The biodegradable plastic material made primarily out of corn starch has already received environmental certification in the European Union, Japan and the United States. (Continued in next column) Oct/Nov 2010
Bags made with the plastic material, developed by a team led by bioengineering professor C. Will Chen, have already been sold abroad for the past 5 years. A notable feature of the biodegradable seedling pot is that the material leaves behind no toxic residue and provides nutrients to the seedling when it breaks down, thereby increasing the germination rate. Furthermore, the pots can be tailor made to match the growth period of specific plants. Patents applications for the pot have been filed in several countries, including the United States and Japan, and sales to Europe began in September. The biodegradable pot is priced at 1.5 times that of conventional seedling pots, but costs are saved as seedlings do not have to be transplanted into new pots as with conventional pots. Also, the pots are planted in the ground with the seedlings, thereby cutting manpower costs and reducing the chance of damage to the seedlings. (SB) (taiwantoday.tw 24 November 2010)
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Czech Republic Starch from genetically-modified potatoes will be produced in the Czech Republic According to Czech Radio, Czech Republic was the first in the world which started to produce genetically-modified starch. Starch factory in the Czech Godishkove is the the world's first company to produce starch from genetically modified potatoes. Such starches are not allowed in food, but perhaps its use in the manufacture of glue, paper and construction, says the radio station. The European Commission in March 2010, allowed to grow genetically modified potatoes in the EU. Prior to this, in Europe, only corn was allowed of all genetically modified foods. (news.rambler.ru 26 November 2010).
South Korea South Korea has purchased 110kt of maize According to market operators, a leading manufacturer of feed from the South Korean company Nonghyup Feed, the last tender contracted to import 110kt of corn arbitrary origin with delivery between 20 and 31 March 2011. The first 55 t of goods to the importer has purchased the company ADM costs USD 1.95 per bushel for the March futures on the CBOT. An equivalent batch of goods worth USD 1.94 per bushel for the March futures on the CBOT provided STX Corp. Recall that NOFI also planned to purchase a lot of grain to supply up to 5 April, but all proposals for this tender was rejected. (apk-inform.com 8 November 2010)
Oct/Nov 2010
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