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GIRACT Starch Industry Overview February/March 2011

Starch Italics

Starch Italics Starch Industry Overview


Crops and grains p.1 p.2


p.4 p.5

Bio-fuels (Contd)

Corn: Buying Opportunity Ahead Corn reaches 2 1/2 year high on supply fears Overfertilizing corn undermines ethanol Farmers harvest 56kt of corn residue for POET Emmetsburg cellulosic ethanol project Ethanol Corn Approved Huge demand for corn boosting food

Starch and derivatives p.5 p.6


p.12 p.13

p.14 p.15


Readers misinformed regarding highfructose corn Archer Daniels Midland: Corn Sweetener Prices to Jump 25%; Strong Mexico Demand Govt releases 18.39 lakh t sugar for Feb'11- India Exclusive - Sugar-squeezed Brazil buys US ethanol

p.17 p18 p.19 p.20

Company News p.8



Strong ethanol performance part of ADM's profitable Q2 Corn price, delays, operational issues contribute to bankruptcy Cargill to build new Brazilian corn processing plant for starches and sweeteners Cargill purchases Tate & Lyle plant Global Sweeteners‘ revenue and gross profit surged by 25.7% and 23.1% driven by increased product price

Bioplastics p.21 p.23 p.24

p.25 p.26

Bio-fuels p.12

Nebraska's first ethanol plant reaches milestone

June/July 2010

Microbiologists aim to optimize bio ethanol production Limiting Ethanol Production Storms, seasonal demand impact ethanol markets South Korean firm plans to invest USD 300 mio for ethanol plant Tata to invest USD 15 mio in Mozambique sugarcane ethanol project Ethanol fueling trip to Denmark Brazil Cosan Sees USD 2 bio Synergies Generated By Raizen Ethanol Venture Export of molasses, ethanol to fetch higher income Petrobras To Double Biofuels Production With Eye On Global Shipments Bug Creates Butanol Direct from Cellulose Zein technology to go commercial at Illinois ethanol plant World starves as Americans burn food to stay on the road Corn-based fuel still a target on national stage

Biodegradable plastics growth linked to composting infrastructure New Technology Allows Maine Organization to Create a New Material PHA and bio-derived PE to drive bioplastic packaging market to 2020: study It‘s Easy Being Green: Bioplastic-tastic Coca Cola, DuPont, Kellogg's and Others Establish a Trade Organization for Sustainable Packaging

(Table of Contents continued on next page)

© GIRACT 2010

Starch Italics Starch Industry Overview


Regional Language News China p.27 p.28 p.29



The duty-paid price of U.S. corn to China port rose slightly from 10th Feb Corn prices rose in Jiangsu market last week February 24 corn early assessment: Focus on supply worries the U.S. corn closed higher rebound Global corn prices rising highly and Chinese increasing imports of Australian feed distilled grains sharply

Russia p.31


Production of starch in Belarus in January-June increased by 35,8%, products from potatoes - by 1.8% Sheikh invests in ethanol plant


Nuplas begins construction of a plant to produce bioplastics for packaging Quotas on exports of maize will be distributed at the auction


South Africa p.33

Global Starch and Starch Derivatives study

South Africa: estimates of corn production down


client impact

Floor price of rice exports increased 2.1% to USD 490 per t China demand boosts cassava price

June/July 2010

Giract has just published new multiresearch




supply, examining in particular the

Vietnam p.33

‗00 000 litres per day ‗000 000 Merger &Acquisition per annum tons tons per annum tons per day tons per hour tons per month

pa t tpa tpd tph tpm

Europe p.32

‗000 000 000 cases per day ‗0 000 000 Joint Venture ‗000 ‗000 tons kilo litres per

bio cpd crore JV k kt klpd day lakh lpd mio M&A

© GIRACT 2010





downturn on the industry. Details on the following page.


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.


• 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


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)




2009/10 and 2015


Published September 2010


Please contact us for subscription details

For more info, contact

GIRACT 24, Pré-Colomb 1290 Versoix/Geneva Switzerland

V. Krishnakumar, Jo Goossens Tel: + 41 22 779 0500 Fax: + 41 22 779 0505

Crops and grains

Starch Italics Starch Industry Overview

Corn: Buying Opportunity Ahead Corn prices continued their rally early this week, as the grain traded at its highest level since July 2008 on Tuesday. The new high did not hold long, though. Corn and all grains turned south after the turmoil in the Middle East escalated. The rise to a multiyear high can be attributed to several factors, including inclement weather and increased demand overseas. In early February, the U.S. Department of Agriculture (USDA) reported that at the end of August 2011, when the harvest season begins, the corn reserve will stand at 675 mio bushels—the lowest surplus level in 15 years. The news of low supply of corn in the U.S. sent corn futures above USD per bushel, double the price the grain hit six months earlier. The all-time high on corn is USD 7.65 per bushel, struck back in 2008 during the global top for most commodities.

Corn: Buying Opportunity Ahead (Contd) As of the end of 2010, 40% of the corn supply in the U.S. was going toward ethanol production. And considering that the U.S. is responsible for over half of all corn exports, it resulted in less corn available for other countries around the globe. Until the government gets its hands out of the ethanol subsidy business, oil companies will continue to have incentives to use the biofuel— and thus high demand for corn will remain. In December, the government extended the ethanol subsidies for at least one more year, and it does not appear it will end anytime soon. So it is expected that the corn prices will have a floor underneath them in the coming year. Investing In Corn Still, even though corn took a hit this week, the overall setup for the remainder of 2011 looks positive, and pullbacks could be viewed as buying opportunities. Take the Teucrium Corn ETF (NYSE Arca: CORN), a pure-play corn fund that holds seasonally advantaged futures contracts across the curve. CORN fell 6% on Tuesday, and is in danger of dropping more in the short term as investors take profits. Another 5 to 10% pullback in CORN will put it in the USD 38/share area.

Ethanol Supports Prices Adding to the demand dynamic are federal mandates putting pressure on companies in the United States to use more ethanol. Unlike Brazil, which uses primarily sugar cane for its ethanol production, U.S. producers create domestic ethanol using corn.

The iPath Dow Jones Grains ETN (NYSE Arca: JJG), whose index is weighted in corn (37%), soybeans (39%) and wheat (24%), also fell 6% on Tuesday. The ETN is now 9% off its high set earlier in the month. ( 25 February 2011)

(Continued in next column)

Feb/Mar 2011

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Crops and grains

Starch Italics Starch Industry Overview

Corn reaches 2 1/2 year high on supply fears

Corn reaches 2 1/2 year high on supply fears (Contd)

Supply concerns showed U.S. corn futures to highs not seen since mid-2008 Tuesday. Nearby corn for March delivery rose 4 3/4 cents, or 0.7%, to USD 7.27 1/4 a bushel at the Chicago Board of Trade, the highest close for a front-month contract since July 3, 2008. Corn for May delivery was the most-active contract since it gained 4 1/2 cents, or 0.6%, to USD 7.35 1/2.

The USDA will issue its next update on plantings March 31. In other markets, ethanol futures closed at a 31-month high. Ethanol for May delivery rose 1.6 cents, or 0.6%, to USD 2.582 per gallon at the CBOT. Oat futures advanced as the market continued to recover from a fall to a nearly 12-week low last week. Oats for May delivery jumped 8 1/2 cents, or 2.2%, to USD 3.89, 1/2 a bushel. ( 1 March 2011)

Futures could continue rising as users of the grain remain worried about supplies, which are projected to come in at a 15-year low at the end of the crop's marketing year on August 31, analysts said. Prices have rallied recently in an attempt to curb strong demand and entice farmers to expand plantings to replenish inventories. Farmers are expected to increase corn plantings 4.3% to 92 mio acres this spring due to high prices, according to an estimate issued last week at the U.S. Department of Agriculture's annual outlook conference. Yet poor weather could derail attempts to harvest a large crop next fall.

Overfertilizing corn undermines ethanol When growing corn crops for ethanol, more means less. A team of researchers from Michigan State University and Rice University shows how farmers can save money on fertilizer while they improve their production of feedstock for ethanol and alleviate damage to the environment.

"With the tightness of the supply/usage sheet for this year, we could probably see some higher prices into June and July," said Sean McGillivray, Vice President of Great Pacific Trading Co., a commodities brokerage firm in Oregon. Futures felt additional support from rallying crude oil prices, as ethanol is made from corn, and from fund buying at the beginning of the month, traders said. Commodity funds bought an estimated 5 000 contracts in light trading, a modest amount, after selling contracts in early dealings. "It looks like corn, especially with crude activity like it is, should be really well supported until we get a major change in acres or crude oil prices," said Brian Hoops, President of Midwest Market Solutions.

The research has implications for an industry that has grown dramatically in recent years to satisfy America's need for energy while trying to cut the nation's reliance on fossil fuels, according to Sieglinde Snapp, a crop and soil scientist at MSU‘s Kellogg Biological Station. ―In an era of increasing reliance on corn production for food and fuel, it is important to quantify the full impact of corn nitrogen management on the environment and on the crop biochemistry,‖ she said.

(Continued in next column)

(Continued on next page)

Feb/Mar 2011

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Crops and grains

Starch Italics Starch Industry Overview

Overfertilizing corn undermines ethanol (Contd)

Farmers harvest 56kt of corn residue for POET Emmetsburg cellulosic ethanol project

The team discovered that corn grain, one source of ethanol, and the stalks and leaves, the source of cellulosic ethanol, respond differently to nitrogen fertilization. The researchers found that liberal use of nitrogen fertilizer to maximize grain yields from corn crops results in only marginally more usable cellulose from leaves and stems. And when the grain is used for food and the cellulose is processed for biofuel, pumping up the rate of nitrogen fertilization actually makes it more difficult to extract ethanol from corn leaves and stems. This happens, they discovered, because surplus nitrogen fertilizer speeds up the biochemical pathway that produces lignin, a molecule that must be removed before cellulosic ethanol can be produced from corn stems and leaves. The findings are an important next step in building a sustainable biofuel economy. While farmers have a clear incentive to maximize grain yields, the research shows a path to even greater benefits when corn residues are harvested for cellulosic ethanol production. Overfertilization also increases the decomposability of corn residue plowed back into the fields. This implies that soil carbon storage becomes less efficient – another minus for the environment because storing additional carbon in soil can reduce the atmospheric concentration of carbon dioxide and help crops access soil water. The research was supported in part by the National Science Foundation and MSU‘s AgBioResearch. ( 28 February 2011)

Feb/Mar 2011

Farmers are now delivering biomass bales to POET's 22-acre storage site in Emmetsburg, Iowa, the future home of the 25 mio-gallon-per-year cellulosic ethanol plant dubbed "Project Liberty." Area farmers harvested 56kt of corn cobs, leaves, husks and some stalk this fall but had been waiting to deliver the biomass to POET while guidelines for the U.S. Department of Agriculture's Biomass Crop Assistance Program (BCAP) were finalized. Farmers on Monday began completing the application process, and they started delivering bales soon after. "While we shared the farmers' frustration with delays to BCAP, we are happy to see that the program is being implemented and farmers are now delivering biomass to POET," Project Liberty Director Jim Sturdevant said. "I know they are eager to deliver their bales, just as we are eager to validate our receiving and handling procedures at the new biomass stackyard. "BCAP is important to helping these first farmers get the new biomass market off the ground. BCAP's inclusion in the next Farm Bill is an important part of continuing to develop this market."BCAP is a USDA program that provides matching funds of up to USD 45 per t to an individual farmer for a maximum two years. It is meant to offset startup costs for developing the feedstock market for cellulosic ethanol and other alternative energy endeavors. Bales this year will be used primarily to test procedures for delivery, receiving, quality assurance, storage and handling at the stackyard. When operational, Project Liberty will use about 300kt of biomass annually to produce ethanol. ( 1 February 2011)

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Crops and grains

Starch Italics Starch Industry Overview

Ethanol Corn Approved

Ethanol Corn Approved (Contd)

The Agriculture Department has cleared the way for farmers to plant corn that is genetically modified to produce alpha-amylase, an enzyme that rapidly breaks down starch into sugar. The February 11 decision—denounced by environmental groups--marks the first U.S. approval of a biotech crop designed specifically for boosting ethanol production. Corn seed with the amylase trait will be sold by Syngenta under the name Enogen.

Although FDA deemed the amylase trait safe for use in food in 2007, the groups are worried that it will affect the quality and shelf-life of processed foods containing corn.

The seed "provides U.S. ethanol producers with a proven means to generate more gallons of ethanol from their existing facilities," says Davor Pisk, Syngenta's Chief Operating Officer.

Industry data show that just one corn kernel with the trait in 10 000 is enough to affect viscosity in food processes, according to the Union of Concerned Scientists (UCS). "Contamination could cause corn snack food to be too fluffy to fit in a standard bag, corn batter to be too thin to coat corn dogs, and corn bread to be too soggy in the middle," the group says.

If the amylase trait enters the food processing stream, it will damage the quality of breakfast cereals, snack foods, and battered products, says the North American Millers' Association, an industry group.

Syngenta plans to work with a limited number of ethanol plants and corn growers this year, and the company is preparing for large-scale commercial planting of Enogen corn in 2012. The company says it will manage the production of Enogen corn "using a contracted, closed production system. Syngenta first asked USDA for approval of the seed in 2005. Since then USDA's Animal & Plant Health Inspection Service (APHIS) has conducted both environmental and plant pest risk assessments. On the basis of those assessments, APHIS concluded that this line of corn "should no longer be subject to regulation," says Michael Gregoire, Deputy Administrator for APHIS' biotechnology regulatory services.

"There is no way to protect food corn crops from contamination by ethanol corn. Even with the most stringent precautions, the wind will blow and standards will slip," stresses Margaret Mellon, Director of UCS's Food & Environment Program. That mandate, known as the Renewable Fuel Standard, requires the consumption of 36 bio gallons of ethanol by 2022.

Grain millers and food manufacturers, however, are concerned that the amylase trait will escape from Enogen crops and inevitably comingle with corn intended for human consumption.

Corn ethanol is expected to supply about 15 bio gallons of that demand, according to FOE ( 15 February 2011)

(Continued in next column) Feb/Mar 2011

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Crops and grains Starch and derivatives

Starch Italics Starch Industry Overview

Huge demand for corn boosting food prices

Readers misinformed regarding high-fructose corn syrup

The cost of corn is rising, and because it's the hidden ingredient in much of our food – everything from pop drinks to margarine -- that means your grocery bills could rise too. The U.S. Department of Agriculture warns that corn supplies are at their tightest levels in 15 years. The situation has been compounded by government incentives to boost corn-based ethanol production. Kerry Klassen, a commodities analyst, says it could take several years for the U.S. to replenish its stocks.

The Corn Refiners Association petitioned the U.S. Food and Drug Administration (FDA), asking that manufacturers have the option of using "corn sugar" as an alternate ingredient name for high-fructose corn syrup on product labels, because "corn sugar" more accurately describes the composition of the ingredient.

"If we look at a long-term average price, I think we're going to be above the five-year average for the next crop year as well," he said. Michael Seery, an analyst with Seery Futures, says world corn prices have also been driven up because China, with its population of 1.3 bio people, is stockpiling food staples. "They keep buying corn," he said. "They're rationing it; they want it. They're afraid of higher prices, so even a USD 7 bushel, which is right now at its all-time high." Some grocery stores have been told to expect that food prices could rise up to 10% in the coming weeks -- all because the world's demand for corn is exceeding supply. The impact of corn prices is widespread. Since corn is used to feed cattle, that means meat prices are also rising. "Right now, there are record prices on commodities like corn that will put upward pressure on prices, but time will tell if this is a temporary trend or a long-term trend," he said. The situation has become serious enough that French President Nicolas Sarkozy wants corn prices on the agenda for this weekend's G20 summit in Paris. ( 14 February 2011)

Feb/Mar 2011

The CRA wants to clear up consumer confusion about high-fructose corn syrup by requesting that the FDA give food and beverage manufacturers approval to call high-fructose corn syrup what it is: corn sugar. Consumers want to know what is in their foods and to have ingredient names that are clearly understood. "Corn sugar" accomplishes these objectives succinctly and simply. Most importantly, the term "corn sugar" enables consumers to readily identify added sugars in the diet. High-fructose corn syrup is made from corn, a natural grain product. High-fructose corn syrup contains no artificial or synthetic ingredients or color additives and meets the U.S. Food and Drug Administration's requirements for use of the term "natural." As many dietitians agree, all sugars should be consumed in moderation as part of a balanced lifestyle. ( 03 February 2011)

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Starch Italics

Starch and derivatives

Starch Industry Overview

Archer Daniels Midland: Corn Sweetener Prices to Jump 25%; Strong Mexico Demand

Govt releases 18.39 lakh t sugar for Feb'11- India

Archer Daniel Midland Co. (ADM) has finalized contracts for corn sweetener shipments in 2011, and will see prices jump 25%, Chief Financial Officer Ray Young said. That increase will be sufficient to raise margins for its corn sweetener operations, despite the rising cost of corn, Young said in a conference call. Corn, along with other agricultural commodities, have soared in recent months and are at their highest level since reaching record highs in 2008. The contracts represent 50 to 60% of its corn sweetener shipments, the company said. Despite a well-publicized backlash among some consumers against high fructose corn syrup in the United States, demand has remained strong in Mexico. Young said corn sweetener shipments of 1.5 mio t were up 90% in 2010, and will remain strong. In some cases, Mexico is importing high fructose corn syrup and shipping higher-priced sugar back to the United States. The company will also continue to benefit from strong ethanol demand, Young said, although production margins have slid close to break-even recently. High sugar prices are making U.S. ethanol exports attractive, Young said, and exports will continue to grow in 2011. ADM reported a 29% jump in second quarter earnings, due in part to ethanol margins and favorable corn positions. Soybean prices have also surged due to tight supplies and surging China demand, but Young said the outlook for the South American soybean harvest has improved recently due to better weather. The company's stock was recently up 6.76% to USD 34.88 a share. ( 01 February 2011)

Feb/Mar 2011

For February 2011, the government has released 18.39 lakh t of sugar for sale through the open market and ration shops and this is more than enough to meet the internal demand of sugar for the month. The government had released 19.18 lakh t of sugar for January, 2011. Meanwhile, about 2.16 lakh t of sugar will be used for the supply through ration shops and 16.23 lakh t will be used in the open market, out of the total allotment for February. Every month, the ministry of food sets the proportion of sugar that is to be released in the open market and ration shops. It guides the mills to sell the complete non-levy quota during the same month. Moreover, from February 2009, in order to reduce the scarcity in the availability of sugar and control increasing prices, the centre had permitted duty-free import of raw and refined sugar. The country has imported 6 mio t of sugar since 2010 while the prices have declined by about 40% in the past 1 year and are now at INR 30 to 31 per kg in Delhi retail markets. Sugar is a term for a class of edible crystalline carbohydrates, mainly sucrose, lactose, and fructose characterized by a sweet flavor. In food, sugar almost exclusively refers to sucrose, which primarily comes from sugar cane and sugar beet. Other sugars are used in industrial food preparation, but are usually known by more specific names-glucose, fructose or fruit sugar, high fructose corn syrup, etc. Currently, Brazil has the highest per capita production of sugar. ( 01 February 2011)

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Starch Italics

Starch and derivatives

Starch Industry Overview

Exclusive - Sugar-squeezed Brazil buys US ethanol

Exclusive - Sugar-squeezed Brazil buys US ethanol (Contd)

The scarcity of sugar products in Brazil, the top producer, has led the country to turn to the US for corn-based ethanol to replenish depleted supplies of its own cane-based alternative, has learned. Brazil's North East region has, in an unusual if not unprecedented move, begun importing US ethanol to replenish supplies lost as soaring sugar prices encouraged mills to turn cane into sweeteners rather than biofuels.

The financial incentive was evident in January when, for instance, Brazilian hydrous ethanol sold at the equivalent of 17.8 cents a pound, compared with 45.4 cents a pound for crystal sugar.

The move defies typical industry dynamics which, as sugar ethanol is less energy-intensive to manufacture than America's corn-based biofuel, typically makes Brazil's version significantly more competitive.

"The premium of sugar over ethanol prices throughout the season incentivised mills to allocate as much cane juice as possible towards sugar production," merchant Czarnikow said on Tuesday. For the US, ethanol exports even to Brazil looked a supportive factor, showing there is a "world market out there" for the corn-based version, Mr Roose said.

"We have to convert our corn into sugar first," Don Roose, President of Broker US Commodities said. However, the figures for Brazilian imports of US ethanol stacked up, even including a trade tariff of USD 0.54 a gallon, Mr Roose added. Ethanol vs sugar The clamour for sugar has increased to 44.7%, from 42.9% in 2009-10, the proportion of cane converted into the sweetener rather than ethanol, the International Sugar Organization said earlier this week. "In a nutshell, although the final figures for both cane production and industrial yields proved to be lower than previously expected, this has not affected sugar production as the decrease in cane availability has impacted ethanol rather than sugar output," the ISO said. While sugar production is up by 15.1% this season, "the growth rate for ethanol output has been downgraded to 6.6% as against nearly 13% projected in November". (Continued in next column)

Feb/Mar 2011

However, expectations that Brazil might switch more cane into ethanol production, given higher oil prices, were attributed with sparking a 3.7% rise to 30.35 cents a pound in raw sugar, for May delivery, in late deals in New York. White sugar for May closed up 3.7% at USD 760.5 per t in London. "Sugar is tight, and will remain tight for the coming quarter until Brazil begins its harvest," Nick Penney at Sucden Financial said. ( 02 March 2011)

GIRACT Sweeteners & Starch Price Monitoring Giract provides quarterly prices of white sugar, key starches and their principal derivatives used in the food industry across major regions. The report comprises tables and commentary on price movements as well as charts which track annual running price series. Details on the following page.

Page | 7


Sweeteners & Starch Price Monitoring

Quarterly Price Review of Starches, their derivatives and Sugar in Key World Markets Now in its 11th successful year ! Giract provides quarterly prices of white sugar, key starches and their principal derivatives used in the food

industry across major countries. This report comprises tables and commentary on price movements. In addition, charts track annual running price series.

Why should you subscribe to this Price Monitoring? Because you are closely involved with these products and often find it difficult - or impossible - to obtain exmanufacturer price estimates on a comparative scale across countries Because this is an efficient mechanism to remain abreast of developments Because this monitoring programme has been endorsed by key industry players including ADM, Avebe, BASF, Cargill, CPI, Danisco, GEA, Grain Processing, Lyckeby, Novartis, Novidon, Unilever, ‌ Because Giract is well-known for its in-depth analyses of the world starch and sugar industries over the last 30 years.

What does this Price Monitoring contain? Compact tables which provide ex-factory prices in local currency and USD for the key products and countries as shown below (relevant raw materials for each country), along with charts tracking price trends. Glucose syrup DE<20 DE 63-65 DE 40-42

HFS 42%


Native Starch Wheat Potato

China EU India LatAm Russia Thailand USA * LatAm, China, India, Russia, Thailand + EU, USA


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Modified Starch food grade+

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Starch Italics

Company News

Starch Industry Overview

Strong ethanol performance part of ADM's profitable Q2

Strong ethanol performance part of ADM's profitable Q2 (Contd)

Archer Daniels Midland Co. reported record quarterly segment operating profit of USD 1.4 bio for the quarter that ended December 31. That‘s an increase of USD 392 mio from the same time period one year ago. ―The ADM team delivered outstanding performance across the board, resulting in record operating profit,‖ said Patricia Woertz, ADM Chairman and CEO.

The company is supportive of E15, Woertz added, but said it will take a while to see higher levels of ethanol at retail pumps. ―I think it‘s a slow go,‖ she said. Vice Chairman John Rice had a positive outlook on ethanol in 2011. He pointed out that at current prices ethanol is still 10 to 20 cents below gasoline, even without factoring VEETC. ―People are still going to blend as much as they can,‖ he said. ( 02 February 2011)

Corn processing profits were a positive part of that picture. During the company‘s quarterly call held February 1 it reported that operating profit increased by USD 109 mio to a total profit of USD 399 mio. The company‘s two new dry mill ethanol plants in Columbus, Neb., and Cedar Rapids, Iowa, became operational in 2010 and, as a result, the company‘s corn processing volumes were up 24%. ADM‘s plants produce ethanol and other products from corn, such as sweeteners, depending on profit margins. ―We like the long term future of ethanol, that is not only why we put these plants in place but why we continue to run the size of our wet corn milling business the way we do,‖ Woertz said. The company‘s profits in the bioproducts division of corn processing increased a total of USD 161 mio to USD 280 mio. Improved ethanol margins and volumes were a part of that, the company said, as well as stronger lysine margins. Ray Young, Senior Vice President, cited the one-year extension of the volumetric ethanol excise tax through 2011 and the U.S. EPA‘s approval of E15 for 2001 and newer vehicles as positive developments for ethanol. U.S. exports of ethanol were also up in 2010, which helped supported demand, and the company expects that will continue in 2011. (Continued in next column)

Feb/Mar 2011

Corn price, delays, operational issues contribute to bankruptcy First United Ethanol LLC announced February 2 that its wholly-owned subsidiary, Southwest Georgia Ethanol LLC, has filed for Chapter 11 bankruptcy protection. ―We are using this Chapter 11 filing as a tool to recognize and protect the value of our business for the long term,‖ said Murray Campbell, CEO of FUEL, which will continue to manage the plant and doesn‘t plan to file for Chapter 11. According to documents filed in U.S. Bankruptcy Court in the Middle District of Georgia, Albany Division, consolidated financial statements show revenue of USD 168 mio for the fiscal year ending September 30. As of December 31, the company had assets of about USD 164 mio and liabilities of USD 134 mio. The Chapter 11 filing came about due to liquidity constraints that resulted from operational problems that have now been largely resolved, the company said. The company also pointed to financial difficulties caused by increased corn prices and delivery delays. Corn is purchased from local corn producers when it is competitively priced but the majority is delivered via rail car from the Midwest. (Continued on next page)

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Company News

Starch Italics Starch Industry Overview

Corn price, delays, operational issues contribute to bankruptcy (Contd)

Cargill to build new Brazilian corn processing plant for starches and sweeteners (Contd)

In 2010 there were many instances of rail car delays that prompted the company to purchase corn from local vendors at a substantial premium so it could keep operating. However, the company didn‘t meet working capital deficit thresholds set in those agreements and has been assessed penalty fees of about USD 1.3 mio per quarter, which has been charged to interest. The company also owes other companies, including about USD 3 mio to Fagen Inc., the design-build company.

The Brazilian economy is in the midst of a period of rapid growth, with rising GDP and increasing investment from developed economies. Levels of disposable income have also risen for many Brazilians, leading to increased demand for food and beverage products and investment opportunities for multinationals.

The ethanol plant has roots that go back to 2005, when the Mitchell County Research Group LLC formed and funded a feasibility study. Several months later a board was formed and the name was changed to First United Ethanol LLC. Construction began in the spring of 2007 with costs projected to be USD 185 mio to build the plant. An equity offering in 2007 bought in USD 74 mio from more than 800 investors. ( 02 February 2011)

Cargill to build new Brazilian corn processing plant for starches and sweeteners Cargill has said it intends to build a new corn processing plant in Brazil to produce starches and sweeteners, to keep up with rising demand from customers in the region.

(Continued in next column) Feb/Mar 2011

Cargill‘s new plant is expected to cost around USD 210 mio and add 30% to the company‘s corn processing capacity in South America, the company said. The location of the new plant is still under consideration, and a decision about where the plant will be located is expected in the first quarter of this year, with operation due to begin in 2013. Leader of the company‘s South America starches and sweeteners business Gonzalo Petschen said: ―The partnership with our customers and rising domestic demand were key aspects that drove our investment. Cargill‘s global leadership team sees with great optimism the growth of business in Brazil.‖ Cargill added that the new plant may also have a line devoted to other corn-based food and industrial ingredients using its proprietary technologies, some of which it claims previously have not been available on the Brazilian market. However, the company remains tight-lipped about what these other ingredients may be. Cargill has made a number of investments in Brazil in the past year. It completed 70% expansion of the capacity of its starches and sweeteners plant in Uberlandia, Minas Gerais in March 2010, and also agreed to buy Unilever‘s Brazilian tomato sauce and paste business in September for about USD 360 mio). ( 02 February 2011)

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Cargill purchases Tate & Lyle plant Cargill announced today that it has purchased Tate & Lyle's corn wet mill ethanol plant in Fort Dodge for USD 57 mio. The announcement breathes new life into a facility that has been officially shuttered for more than two years.

The mill will be operational within 18 to 24 months, said Cargill spokeswoman Nicole Reichert. When functional, the plant will employ at least 100 or more full-time workers. Reichert said wages will "be competitive with similar jobs in the area." She declined to name specific figures. Under the Tate & Lyle banner, the plant was expected to produce 100 mio gallons of ethanol per year According to Reichert, Cargill expects to product 115 mio gallons per year, using 150 000 bushels of corn daily. "We're going to make some modifications to the facility to increase efficiency," she said. "We believe that a highly efficient, well-located corn wet mill ethanol plant fits well into our bio-product portfolio," said Alan Willits, President of Cargill Corn Milling North America, in a press release. "We see an opportunity in Fort Dodge to replicate the success we have had at our Blair, Neb., and Eddyville, Iowa, biorefinery campuses." ( 31 March 2011) Feb/Mar 2011

Global Sweetenersâ&#x20AC;&#x2122; revenue and gross profit surged by 25.7% and 23.1% driven by increased product price Global Sweeteners Holdings Limited together with its subsidiaries reported a 25.7% and 23.1% year-on-year growth in its consolidated revenue and gross profit to approximately HKD 3 356 mio and HKD 378 mio respectively for the year ended 31 December 2010. Net profit attributable to shareholders for the year 2010 increased by 3.5% to approximately HKD 89 mio. During the year, the sales volume of upstream products was similar to 2009's, but the price of corn starch rocketed by 32.2%. As a result, the revenue and gross profit of upstream products for the year were HKD 1 224 mio and HKD 127 mio respectively. Although the average purchasing price of corn kernel, the principal raw material of the Group surged by 21.2% in 2010, the Group was able to leverage the upsurge of corn starch price to sustain a slight increase in the gross profit margin of its upstream products during the year 2010. Among the Group's downstream sweetener products, the revenue of corn syrup and corn syrup solid during the year were approximately HKD 1 239 mio and HKD 727 mio respectively. The increase in revenue of corn syrup products was mainly attributable to the increase in sales volume and selling prices. During the year, the utilisation rate of the glucose/maltose production facility in Jinzhou increased, while internal consumption of glucose syrup for downstream production reduced. As a result, the sales volume of both glucose syrup and maltose syrup increased to approximately 246kt (2009: 178kt) and 244kt (2009: 225kt) respectively during the year 2010. (Continued on next page)

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Global Sweetenersâ&#x20AC;&#x2122; revenue and gross profit surged by 25.7% and 23.1% driven by increased product price (Contd)

Global Sweetenersâ&#x20AC;&#x2122; revenue and gross profit surged by 25.7% and 23.1% driven by increased product price (Contd)

Supported by a 16.8% and 25% increase in the selling prices of glucose syrup and maltose syrup respectively, the revenue of glucose syrup and maltose syrup rose to HKD 561 mio and HKD 678 mio respectively (2009: HKD 347 mio and HKD 500 mio respectively).

To cope with the downstream production needs, the Group plans to expand the corn processing capacity in existing Jinzhou corn refinery by 300kt per annum. Construction of this corn processing facility is scheduled to commence in the second quarter of 2011 and is expected to be completed by the fourth quarter of 2011.

The revenue of maltodextrin increased by approximately 80.9% year on year to HKD 356 mio due to increase in the selling price and sales volume of 25.5% and 44.1% respectively to approximately HKD 3 100 per t and 113kt respectively. Revenue of crystallised glucose dropped by 22.7% to approximately HKD 371 mio during the year as compared to that of the previous year, as a result of 43.6% decrease in sales volume to approximately 168kt (2009: 298kt). However, increase in the selling price had contributed to improved gross profit margins of both crystallised glucose and maltodextrin for the year. During the year, the Group continued its effort in developing its overseas markets. The Group's export volume of upstream corn refined products and corn sweeteners for the year were approximately 45kt (2009: 46kt) and 41kt (2009: 15kt) respectively, while the respective export sales amounted to approximately HKD 102 mio and HKD 137 mio respectively, representing 27.5% and 211.4% increases from those of the previous year. Going forward, the Group will continue to secure the supply of corn kernel at the lowest cost through better utilisation of its current corn storage facilities and a more comprehensive corn procurement policy and network. (Continued in next column)

Feb/Mar 2011

In view of economic recovery and improved market sentiment, the Group intends to expand its downstream production. The Group plans to add a new HFCS (high fructose corn syrup) 55 production line of 60ktpa capacity in Shanghai to cope with the huge demand growth from food and beverage manufacturers in the region. Apart from this, the Group has also planned to resume the projects in Jinzhou which include a new crystallised glucose production facility of 100ktpa, a maltodextrin production facility of 40ktpa and a new HFCS 55 production facility of 100ktpa. The expansion plans of the Group will be principally financed by its internal resources and bank borrowings. "Sugar price in China has been rebounding from rock bottom since 2009 and current sugar price is nearly three times its lowest in 2008. The persistently high sugar price creates a favourable environment for the Group's sweeteners products, especially for crystallised glucose and HFCS 55. We see beverage producers are more inclined to switch from cane sugar to corn sweeteners now. We believe these new expansion plans will increase the Group's overall flexibility in adjusting its product mix in response to market needs and enable the Group to fully capture the opportunities we see in times of high sugar price," Mr Kong Zhanpeng, Chairman of Global Sweeteners said. (Continued on next page)

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Global Sweeteners’ revenue and gross profit surged by 25.7% and 23.1% driven by increased product price (Contd) He added: "On the other hand, we believe the upsurge of corn price in China is another issue that the Company needs to pay attention to. That is why we intend to raise our upstream capacity by 50% this year to secure raw material supply. I believe this move will put us in a better position to respond to market changes." "With respect to business diversification, the Group has launched retail packaged sweeteners products and beef products, which are currently sold directly to consumers via nationwide supermarket chains in the PRC. The Group will continue to diversify its retail product range in future through launching new products," Mr Kong remarked. ( 29 March 2011)

Nebraska's first ethanol plant reaches milestone Chief Ethanol Fuels, the state‘s first commercial ethanol manufacturer, shipped the 1-billionth gallon produced at its Hastings plant in mid-February. One of the first fuel ethanol plants in the U.S., Chief opened in 1984 with the capacity to produce 10 mio gallons annually. This year, it is expected to produce nearly 70 mio gallons. According to Hanson, Nebraska is home to 25 ethanol plants that produce 2 bio gallons annually and employ 1 300 people.

Hanson said Chief is a major grain buyer in the state, providing a market for 25 mio bushels of corn annually — about 80% of the crop grown in Adams County, where the facility is located. (Continued in next column) Feb/Mar 2011

Nebraska's first ethanol reaches milestone (Contd)


In addition to fuel ethanol, he said the plant also markets high-protein distillers grains to local livestock feeders. More than one-third of the corn processed in the plant is returned to the feed sector in the form of distillers grain. ―Chief Ethanol Fuels continues to invest capital, create jobs and add value to Nebraska agricultural products and the economy. Nebraska is fortunate to host a portfolio of ethanol-producing plants that continue to stimulate the economy and stabilize our supply of renewable transportation fuels,‖ said Todd Sneller, administrator of the Nebraska Ethanol Board. ( 25 February 2011)

Microbiologists aim to optimize bio-ethanol production Food versus fuel -- this rivalry is gaining significance against a backdrop of increasingly scarce farmland and a concurrent trend towards the use of bio-fuels. Researchers at the Technische Universitaet Muenchen (TUM) are helping to resolve this rivalry: They are working to effectively utilize residual field crop material - which has been difficult to use thus far -- for the industrial production of bio-ethanol. They took a closer look at bacteria that transform cellulose into sugar, thereby increasing the energy yield from plants utilized. If this approach works, both bread and bio-fuel could come from the same harvest in the future. The age of diesel and gasoline is approaching its inevitable end. However, one of the alternatives, bio-ethanol made from plant material by way of microorganism fermentation, is under attack. Until now, bio-ethanol has been produced from crops such as wheat, sugar cane or corn, or more accurately, from the sugar these crops contain in the form of starch. (Continued on next page)

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Microbiologists aim to optimize bio-ethanol production (Contd)

Limiting Ethanol Production (Contd)

However, when field crops are used for the production of bio-ethanol, they are no longer available as food. Researchers at the TUM Department of Microbiology are working on a solution to this dilemma. The idea: Make the sugar stored in the stems and leaves of plants in the form of cellulose available for bio-ethanol production. "It is our goal to take the cellulose, which has so far hardly been used, and turn it into sugar on an industrial scale, which can then be processed to bio-ethanol," says microbiologist Dr. Wolfgang Schwarz. "We are now optimizing the most effective combinations for industrial use. Our ultimate goal is to develop a specialized degradation tool for every individual plant waste material containing cellulose. With a bit of luck we will find the perfect enzyme mixtures, which can then become established in bio-ethanol production facilities. "With this research program the TUM scientists are in sync with current industrial trends. Süd-Chemie AG is building a pilot plant in Straubing to convert the biogenic residual product straw into ethanol. ( 09 February 2011)

Thus, the price of food is being driven up for the sake of less efficient, more expensive fuel. In fact, one recent study done by UC Berkeley Geoengineering Professor Tad W. Patzek found that ethanol is one of the worst renewable fuel solutions, and confirmed that a staggering six times more fossil energy is used to produce ethanol than is released by it. If we rewind just three years, back to 2008, you will recall that the then new ethanol mandate was responsible for driving food prices up by as much as 50%, even leading to riots in several foreign countries. And now, just a short time afterward, the ethanol movement is still gaining momentum. In fact, 15% ethanol gasoline is being talked about right now and could very well become the new standard soon. This can only lead to more corn being used to produce ethanol and the price of other good going up because of it. Last year alone, more than 20% of the United States‘ corn crop was used for ethanol production, and it only offset 1% of the country‘s oil use. Obviously, focusing efforts on new power technology and electric vehicles is a better way to go. In fact, almost any way is a better way to go! The answer to easing the current food price spike is to stop using all of our corn for ethanol, plain and simple. ( 04 March 2011)

Limiting Ethanol Production It is no secret that increased production of ethanol for fuel has driven up the price of food, and anything else made from corn, on a global level. Today, almost a third of the corn crop in the United States is being used in ethanol production for fuel. What most consumers don‘t realize is that one gallon of ethanol is about 65% as efficient as one gallon of gasoline. It also costs more to produce. (Continued in next column)

Feb/Mar 2011

Storms, seasonal demand impact ethanol markets Max Thomasson, commodity sales and operations manager for CHS Inc.‘s renewable fuels division, said the recent series of winter storms that has battered areas of the Northeast and Central Midwest has affected ethanol demand, which unfortunately is coinciding with the lowest seasonal demand time of the year. (Continued on next page)

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Storms, seasonal demand impact ethanol markets (Contd)

South Korean firm plans to invest USD 300 mio for ethanol plant

This has caused ethanol prices to trail corn slightly, causing some pressure on ethanol prices relative to corn. Chris Highsmith, Research Analyst for Eco-Energy Inc., also believes weather has combined with low seasonal demand to create less than ideal circumstances for the ethanol market. ―That trend, with seasonal gasoline demand down and ethanol production up, is generally not a good combination for ethanol margins for plants,‖ Highsmith said.

Despite issues that continue to hound the local ethanol industry, a South Korean firm recently expressed to the government its intention to revive plans for an ethanol production facility in Luzon. Marriz B. Agbon, President of the Philippine Agricultural Development and Commercial Corp., told reporters that this Korean firm, which he declined to name, has been looking at investing USD 300 mio to construct an ethanol facility.

Rising oil prices will affect the ethanol market, but not has severely as some may speculate, according to the analysts. Highsmith said upward pressure on crude prices will boost RBOB prices, which in turn will increase the spread between RBOB and ethanol. ―If nothing else, it‘s giving ethanol room to move up and still retain some margins for the people blending it,‖ he said.

Agbon said on the sidelines of a recent launching ceremony by Green Future Innovations, that this Korean company was among the original proponents that wanted to put up a plant in the Philippines. But due to the uncertainty on tariff rates imposed on imported ethanol and on the unclear policies regarding the uptake on locally produced ethanol, the Korean firm decided to put the project on hold. The interest was revived recently given the increases in gasoline pricesand the renewed interest shown by other investors such as the Filipino-Japanese venture GFI, in the local ethanol industry.

But Thomasson said if increased per-barrel prices inflate the price at the pump too much, it could be a detriment to the ethanol market. ―I don‘t see a huge run up in prices affecting ethanol other than adversely,‖ he said. Internationally, there continues to be demand for exports to Europe, but sustainability requirements are making it difficult for most U.S. producers to export to the EU27, according to Thomasson. The EU is currently only accepting fuel that has been certified through the International Sustainability and Carbon Certification System, a process which includes proving the fuel was produced using sustainable biomass. ―That‘s a big hurdle for U.S. producers because there aren‘t many who have achieved that certification,‖ he said, adding that he is aware of only two U.S. producers who have received ISCC-certification.( 01 February 2011)

Feb/Mar 2011

Although Agbon did not identify the firm, the 2009 Bioethanol Roadmap crafted by the Sugar Regulatory Administration two years ago showed Daebong LS of South Korea as among the 20 investors that initially targeted to have an ethanol facility operational by 2012.Of these 20 investors, only three companies have completed their ethanol facilities namely San Carlos BioEnergy Inc., which produces 40 mio liters a year; Leyte Agri Corp. with 10 mio liters annually, and Roxol Bioenergy, with 33 mio liters a year. Their combined production can barely serve the requirements of the local oil companies, which are expected to increase to over 400 mio liters this year, given the 10% mandated ethanol blending in gasoline. (Continued on next page)

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South Korean firm plans to invest USD 300 mio for ethanol plant (Contd) Agbon further disclosed that the Korean firmâ&#x20AC;&#x2DC;s planned ethanol facility, the construction of which may start this year, may likely have the same capacity as the plant being built by GFI. GFI recently announced in a launching ceremony that it was pushing through with its P6-bio bioethanol and cogeneration facility in Isabela, which would not only shore up supply of local ethanol but also provide jobs to more than 15 000 Filipinos in the rural areas.GFI president Reynaldo P. Bantug earlier said the ethanol project, set to start operations in the second quarter of 2012, would generate 54 mio liters of bioethanol a year, displacing USD 27.5 mio worth of imported fossil fuel. The project, which would also generate 100 000 megawatt-hours of electricity annually, is being funded by Japanâ&#x20AC;&#x2DC;s Itochu Corp. and JGC Corp., Taiwanese holding company GCO and the local counterpart firm Philippine Bioethanol and Energy Investments Corporation through the special purpose vehicle company Green Future ( 01 February 2011)

Tata to invest USD 15 mio in Mozambique sugarcane ethanol project In India, Tata Chemicals said that it will make an initial USD 15 mio investment in the biofuel production in Mozambique originally developed by Grown Energy. In 2009, the Mozambican government granted 15 000 hectares in Chemba district for a sugarcane biofuels project that would ultimately cost USD 224 mio and produce up to 26 mio gallons (100 mio liters) of ethanol per year. Last October, Tata Chemicals acquired Grown Energy for USD 1.1 mio. ( 14 February 2011)

Feb/Mar 2011

Ethanol fueling trip to Denmark Voters will be the ones to decide if all the elected officials on a trip next week to Denmark to visit a cellulosic ethanol production facility should have gone. Construction of a USD 300 mio plant is supposed to begin next year, with start-up operations set for late 2014 or early 2015. The raw material for the ethanol will be wheat straw and corn stover coming from a 100-mile radius around the plant near Jamestown. It will take the equivalent of 400kt of wheat straw annually to supply the plant, which will use a chemical process to create the cellulosic ethanol. In addition to ethanol, the plant will produce feed-grade C-5 molasses and purified lignin pellets that can be used as fuel for a power plant. Great River Energy has partnered with a number of companies in developing the plant including Inbicon, the owner-operator of the demonstration cellulosic ethanol plant the North Dakota delegation will visit in Denmark. Because cellulosic ethanol is derived from woods, grasses and non-edible parts of plants, it means less competition with food crops, most commonly corn, in the production of ethanol. It's considered carbon-neutral. There's a competition between three proposed plants to be the first commercial-scale cellulosic ethanol plant in the U.S. The others are in Iowa and Nebraska. The economic model for a cellulosic ethanol operation will be different than that for ethanol plants already operating in North Dakota. The key unanswered question about the market will largely determine its economic viability as a fuel source. A trip to Denmark appears in order. Certainly, having the Agriculture Department and the Bank of North Dakota, as well as the Industrial Commission, represented on the trip makes sense. ( 03 March 2011)

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Brazil Cosan Sees USD 2 bio Synergies Generated By Raizen Ethanol Venture

Brazil Cosan Sees USD 2 bio Synergies Generated By Raizen Ethanol Venture (Contd)

Brazilian sugar and ethanol group Cosan Industria e Comercio SA said Wednesday that it expects synergies worth USD 2 bio from its ethanol joint venture, Raizen. The USD 12 bio ethanol venture was formed last year by Cosan and Royal Dutch Shell. Despite still being in its infancy, the venture will expand its production capacity over the next five years, Cosan and Shell said. The added output aims to meet a growing demand for fuel at the company's 4 500 service stations across Brazil.

Previously, consolidation in the Brazilian biofuels sector had been limited to smaller deals between rivals or investment funds. U.S. company Bunge Ltd. (BG) in December 2009 acquired Usina Moema Participacoes SA, which owns a Brazilian sugarcane mill and has ownership interests in five others. France's Louis Dreyfus Commodities in October 2009 took control of giant sugar and ethanol group SantelisaVale. Cosan snapped up local milling group NovAmerica in early 2010. ( 02 March 2011)

Raizen will boost sugarcane-crushing capacity to 100 mio t a year from current output of 60 mio t. Ethanol production is expected to more than double over the next five years to 5 bio liters a year. Raizen now produces about 2.2 bio liters annually. Raizen represents a huge step in the consolidation of Brazil's fractured ethanol sector, where many of the sugarcane mills are family owned. That's made the sector ripe for picking for foreign investors flush with cash and a desire to enter Brazil's biofuels segment.

Cosan and Shell's creation of Raizen was followed by two separate deals made by Brazilian state-run energy giant Petroleo Brasileiro, or Petrobras. In May, Petrobras invested nearly USD 1 bio for a 46% stake in local sugar group Guarani, the country's fourth-largest sugar miller. Petrobras then paid about USD 240 mio for a 49% stake in Nova Fronteira Bioenergia SA, a joint venture with local sugar producer Sao Martinho SA (SMTO3.BR). (Continued in next column)

Feb/Mar 2011

Export of molasses, ethanol to fetch higher income

Foreign exchange earning from export of ethanol and molasses is likely to be higher this year owing to surging world prices and demand from European buyers, industry sources said on Monday. Almost all the distilleries are presently operating at 90% capacity and are expected to convert much larger quantity of molasses into alcohol to meet the buyers demand. Sources said that last year exporters earned higher foreign exchange by exporting around 210kt of alcohol on an average price of USD 775 to 800 per t. (Continued on next page)

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Export of molasses, ethanol to fetch higher income (Contd) However, this year owing to increased demand from the buyers, prices have moved further high and are expected to stay at USD 800 to 1 000 per t. Ethanol exports during 2009 stood at 180kt fetching an average price of USD 775 per t. However, prices are firm from the very start of the season compared to last year and are being quoted in the range of USD 825 to 850 with exports touching around 2 798 t so far. Mohammad Kasim Hashim, a leading exporter of molasses and ethanol said prospects of exports were good this year owing to firm world prices for both the commodities. However, he said the crushing of sugarcane could further last for another 6 weeks and may come to an end by the middle of March. Therefore, he felt that lesser molasses would result in lesser production of ethanol. He said undoubtedly, there was strong demand for ethanol in the world market but Pakistan with limited capacity owing to short cane crop may export around 200kt to 225kt this year. Nevertheless, he said with higher distillery capacity the country has managed to add value to molasses to produce ethanol and earn higher foreign exchange. Strong demand has also led to increase molasses prices in the world market which are presently being quoted at around USD 120 to 130 per t. Last year, molasses exports stood at 290kt fetching average price of USD 110 to 112 per t. ( 08 February 2011)

Petrobras To Double Biofuels Production With Eye On Global Shipments Brazilian state-run energy giant Petrobras will spend USD 3.5 bio over the next four years to more than double biofuels output, positioning the company to take advantage of global demand for clean, renewable sources of energy. (Continued in next column)

Feb/Mar 2011

Petrobras To Double Biofuels Production With Eye On Global Shipments (Contd) ―We are preparing for a global scenario in which the demand for biofuels is expanding,‖ Miguel Rossetto, Chief Executive of Petrobras biofuels unit Petrobras Biocombustivel, said in an interview. Petrobras created Petrobras Biocombustivel in 2008 to be the platform for its entry into Brazil‘s biofuels sector, where sugarcane ethanol has been in use since the 1970s. But the world‘s need to reduce carbon emissions, including firm targets set by some countries, means that demand for biofuels such as ethanol and biodiesel will likely explode in coming years. The company plans to spend USD 2.5 bio to boost ethanol and biodiesel production, with about 80% of the total earmarked for ethanol projects, Rossetto said. An additional USD 1 bio will be spent on infrastructure development, including Petrobras‘ participation in a USD 3.3 bio ethanol pipeline project, as well as research and development. Ethanol production is targeted for 2.6 mio cu.m by 2014, up from output of 1 mio cu.m in 2010. Biodiesel production, meanwhile, is expected to climb to 750 000 cu.m in 2014, up from 500 000 cu.m at the end of last year. The company‘s primary focus is to meet rising demand in Brazil, Rossetto said. Brazil not only mandates a 25% blend of ethanol into gasoline at the pump, the country also has a massive flex-fuel fleet of light vehicles that can operate seamlessly on ethanol, gasoline or any combination of the two fuels. Demand for biofuels from the petrochemicals sector is also growing as the industry moves toward greater production of so-called green plastics. Local petrochemicals giant Braskem, in which Petrobras holds a 49% stake, consumes about 400 000 cu.m of ethanol per year. ( 12 February 2011) (Continued on next page)

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Bug Creates Butanol Direct from Cellulose

Bug Creates Butanol Direct from Cellulose (Contd)

Butanolâ&#x20AC;&#x201D;a promising next-generation biofuel-packs more energy than ethanol and can be shipped via oil pipelines. But, like ethanol, biobutanol production is focused on using edible feedstocks such as beets, corn starch, and sugarcane.

"Butanol has some technical benefits, but the real problem is the amount of food that goes into making a gallon of fuel," says Jeremy Martin, a Senior Scientist at the Union of Concerned Scientists, a Cambridge, Massachusetts-based advocacy group that is part of a broad coalition pushing Congress to end lucrative tax credits for corn ethanol. Liao's innovations could end biobutanol's association with cornâ&#x20AC;&#x201D;an association that, ironically, is partly of his making. In 2008, Liao developed a microbial pathway for converting sugar into isobutanol, a high-octane isomer of butanol.

Now James Liao, a biomolecular engineer at the University of California, Los Angeles, has developed two routes to liberate butanol from its dependence on food crops. Liao, who has a track record for commercializing innovative biofuels processes, has proven that microbes can produce the advanced biofuel directly from agricultural wastes, as well as from protein feedstocks such as algae. Liao's demonstration of direct cellulose-to-butanol conversion could bring down the cost of cellulosic biofuels, which is currently prohibitively high. His protein-based process provides the biofuels field with entirely novel feedstock options. While they're renewable, biofuels face attacks from environmental and food activists, and biobutanol is no exception: the first generation of biobutanol plants under development will run on corn-based sugar and starch.

That innovation is now being commercialized by Gevo, an Englewood, Colorado-based startup that Liao cofounded. Gevo raised USD 107 mio in an IPO last month to support its plans to retrofit corn ethanol plants to produce isobutanol instead. Plans for a shift to biofuels production from biomass feedstocks such as switchgrass, corn stalks, and sugarcane bagasse (or plant residue) are, meanwhile, moving slowly because of higher costs. The U.S. Environmental Protection Agency mandated use of just 6.6 mio gallons of cellulosic ethanol this yearâ&#x20AC;&#x201D;less than 3% of the 250-miogallon goal set by Congress four years ago. The holdup is from added processing steps required to break down these cellulosic feedstocks and thus generate sugars for fermentation; the processing boosts costs considerably, making production facilities difficult to finance. The key was adding Liao's sugar-to-isobutanol pathway to a microbe, Clostridium cellulolyticum, that likes chewing on biomass but does not normally make butanol. ( 23 March 2011)

(Continued in next column) Feb/Mar 2011

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Zein technology to go commercial at Illinois ethanol plant

Zein technology to go commercial at Illinois ethanol plant (Contd)

Illinois-based technology developer Prairie Gold Inc. and GTL Resources USA Inc. are collaborating to produce zein protein at a commercial-scale plant, to be constructed near Illinois River Energy‘s 110 MMgy plant at Rochelle, Ill. Illinois River Energy is a subsidiary of GTL Resources.

Massachusetts-based Freeman Industries LLC is the one other U.S. company currently producing zein, according to Shane. It uses corn gluten meal to produce zein. Prairie Gold‘s trademarked Amazein is produced from the corn kernel.

―This unique technology has the potential to significantly change the way we think about ethanol production in that instead of just producing ethanol and distillers dried grains (DDGs), we are becoming a biorefinery capable of producing several food, industrial and chemical products,‖ Rich Ruebe, CEO of GTL and Illinois River Energy, said. Zein is a natural, corn-based polymer with a wide variety of uses in multiple industries. It can be used to produce biodegradable plastics, shellac and other hard coatings and also has many applications in the pharmaceutical and specialty chemicals industries. Demand for the product is growing, according to Shane, but quality and pricing have inhibited its ability to enter the market in high volumes. Poet LLC is the only other ethanol producer known to be working on zein production technology. Its trademarked product, known as Inviz, is produced from DDGs.

Typical zein production begins by using ethanol to dissolve and extract the zein protein from the raw product which, in Prairie Gold‘s technology is corn kernels. From there, Prairie Gold utilizes membranes to purify the zein protein. Shane said this method reduces energy costs and increases the purity of the zein. Corn and ethanol used in the process are then returned the ethanol plant for its use. Shane said Prairie Gold‘s process extracts one pound of zein per bushel of corn. Ethanol and corn are merely ―borrowed‖ from the ethanol plant and operations at the ethanol facility are not affected. The market price for zein is approximately USD 18 per pound, Shane said. By comparison, DDGs are currently selling for 6 to 8 cents per pound. The zein plant to be constructed at Illinois River Energy could produce 40 mio pounds of zein annually, he said, but declined to offer production cost details. While the selling price is attractive, Shane cautioned that the company is focused on producing zein at a rate that will maintain its status as a high-value product. ―Our business model is to partner with ethanol plants,‖ he said. ―We do not want to flood the market with the product, because of the many uses for it. You‘re talking about something that goes into a very high value market to one that‘s very low. We don‘t want to overproduce where we‘d have to sell into the pharmaceutical industry for a plastic industry price.‖ ( 23 March 2011)

(Continued in next column) Feb/Mar 2011

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World starves as Americans burn food to stay on the road

Corn-based fuel still a target on national stage

Spectators at February's Daytona 500 in Florida were handed green flags to wave in celebration of the news that the race's stock cars now use gasoline with 15% corn-based ethanol. It was the start of a season-long television marketing campaign to sell the merits of biofuel to Americans.

Some people have placed a bull‘s-eye on ethanol fuel made from corn.

The US spends about USD 6 bio a year on federal support for ethanol production through tax credits, tariffs, and other programs. Thanks to this financial assistance, one-sixth of the world's corn supply is burned in American cars; enough corn to feed 350 mio people for an entire year.

U.S. Sen. Dianne Feinstein, D-Calif., wants to repeal the 45 cents-per-gallon credit earned by refiners and fuel blenders for ethanol purchased and mixed into gasoline. Congressional bill S530 would leave the incentive intact for next-generation advanced biofuels not made from corn, according to The Hill, a Congressional newspaper (

Government support of rapid growth in biofuel production has contributed to disarray in food production. Indeed, as a result of policy in the US and Europe, including aggressive production targets, biofuel used more than 6.5% of global grain output and 8% of the world's vegetable oil last year, up from 2% of grain supplies and virtually no vegetable oil in 2004. In 2007 and 2008, the swift increase in biofuel production caused a food crisis that incited political instability and fuelled malnutrition. Developed countries did not learn. Since 2008, ethanol production has increased by 33%. Biofuels were initially championed by environmental campaigners as a silver bullet against global warming. They started to change their minds as research showed that biofuels from most food crops did not significantly reduce greenhouse gas emissions - and in many cases, caused forests to be destroyed to grow more food, creating more net carbon-dioxide emissions than fossil fuels. Some green activists supported mandates for biofuel, hoping they would pave the way for next-generation ethanol using non-food plants. That hasn't happened.( 21 March 2011) Feb/Mar 2011

U.S. Sen. Tom Coburn, R-Okla., and U.S. Sen. Ben Cardin, D-Md., said repealing the blenders credit would reduce America‘s annual budget by USD 6 bio ( Branstad said - ―If we can go from 10 to 15% ethanol, that is going to increase the demand. So right now we need more yields in our corn to meet the demand for ethanol. And once we get that demand fulfilled, then I‘m ready to move on to the 15% blend.‖ People would be ―completely amazed‖ at what the renewable fuels industry would look like by 2030, ―if Congress would get out of the way and Big Oil would be brought down to a level playing field‖ instead of being highly subsidized, said Monte Shaw, executive director of the Iowa Renewable Fuels Association. (Continued on next page)

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Bio-Fuels Bio-Plastics

Starch Italics Starch Industry Overview

Corn-based fuel still a target on national stage (Contd)

Biodegradable plastics growth linked to composting infrastructure (Contd)

―With corn yield trends, we could feed the world and produce 50 to 60 bio gallons of ethanol by 2030,‖ he said.―And that would just be from corn starch,‖ he said. ―Any cellulosic ethanol production would be above and beyond that. That is game-changing. ―If the ethanol industry could wave a magic wand, our view of the future would be quite simple,‖ Shaw said. ―Every vehicle on the road would be a flexible fuel vehicle and every pump at a gasoline station would be a flex fuel pump (blender pump). ―That would crush the oil monopoly that currently uses its clout to keep consumers from being empowered to choose the fuel of their choice,‖ he said. ―If there was true consumer choice for fuels the ethanol industry would feel quite confident in America‘s fueling future.‖ ( 20 March 2011)

Biodegradable plastics growth linked to composting infrastructure Rising interest in biodegradable plastics is good news for the bioplastics sector. But this enthusiasm, on the part of both consumers and governments, must be accompanied by the installation of adequate composting infrastructures - whether at local, regional or national level, says Robert Heger, Vice President, specialty plastics, at global chemical company BASF

BASF, headquartered in Ludwigshafen, Germany, estimates demand for biodegradable and bio-based plastics will grow by 20-30% during the next few years, helped by rising consumer demand, new environmental regulations and the development of new technologies and applications. BASF produces the biodegradable polymer Ecoflex and derivative product Ecovio. Ecoflex, an aliphatic-aromatic copolyester, acts as an enabler by improving the flexibility of other polymers such as polylactic acid (PLA) and starch. Ecovio is a blend of Ecoflex and corn sugar-based PLA. While BASF's Ecoflex is biodegradable, it is not generally produced from bio-based materials. However, BASF has launched another Ecovio plastic grade, branded Ecovio FS Paper, for lining paper cups, which is manufactured using partly bio-based Ecoflex. BASF has not disclosed which of the three raw materials used to produce Ecoflex - butanediol, terephthalic acid and adipic acid - is bio-based in the Ecovio FS Paper grade. In theory, each could be exchanged with a bio-based material, Heger says. Europe is the biggest market for Ecoflex and Ecovio, with bags the largest application. Germany has a particularly advanced infrastructure for biodegradable polymers, Heger says, and strong demand is expected in Italy following the introduction of a law in January banning the use of non-biodegradable single-use bags. BASF is also forecasting strong growth for the products in North America, as well as in Japan and Australia.

(Continued in next column) Feb/Mar 2011

(Continued on next page)

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Biodegradable plastics growth linked to composting infrastructure (Contd)

Biodegradable plastics growth linked to composting infrastructure (Contd)

In the US, government initiatives promoting the use of renewable raw materials and feedstocks are expected to help boost sales of biodegradable plastics.

Other growth areas include agricultural mulch films, films for lining paper products such as cups, and disposable cutlery and plates. Agricultural mulch films, which are used to improve farming productivity, can be tilled into the soil at the end of a growing season, unlike polyethylene (PE) films which have to be removed and then either cleaned or sent to landfill.

Earlier this year, BASF reached an agreement with US bioplastics manufacturer Metabolix which enables the German producer to sell Ecovio in the US. Under the agreement, BASF has acquired a license from Metabolix under a US patent to produce and market PLA and polybutylene adipate terephthalic acid (PBAT) compounds under its Ecovio trade name.

Legislation supporting the use of biodegradable packaging can help boost demand, but it is not necessarily the best route, Heger notes. It is more important to convince the consumers and brand owners of the products' benefits, he suggests. While Italy's plastic bag ban is creating additional demand for biodegradable plastics, this effect is less obvious in countries lacking that infrastructure, such as China, where a plastic bag ban was introduced in 2008. "In China, people can buy biodegradable and compostable bags but there is no infrastructure, no composting facilities, so this plastics ban does not solve the littering issue," Heger explains. (Continued in next column) Feb/Mar 2011

"In countries with high labor costs, it can be cheaper for the farmers to use a biodegradable mulch film that does not need to be removed afterwards," Heger says. According to global market research and consulting company Applied Market Information, the market for agricultural films was 3.6 mio t in 2008. Using biodegradable films to line paper cups allows the cup to be recycled or composted. Paper cups are normally lined with PE, which causes problems with recycling because PE does not dissolve in the recycling process, Heger explains. "We can achieve the same mechanical and product properties with Ecovio film, such as resistance to moisture and grease, but it does not harm the recycling process," he says. BASF estimates the global market for whole paper cup material, including the paper and plastic coating, at 1.3 to1.5 mio t. The bioplastics market is extremely dynamic and the introduction of new legislation makes it difficult to predict when additional capacity will be required, Heger says. "There is an underlying trend towards sustainability globally. I'm not saying that biodegradable plastics will save the world, but they can contribute to sustainable solutions," he adds. ( 31 March 2011)

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New Technology Allows Maine Organization to Create a New Material

New Technology Allows Maine Organization to Create a New Material (Contd)

About 1% of the world's plastics are currently made with bio-based material nearly all of which comes from corn starch, but, Belliveau says, demand is growing, and according to one assessment, about 90% of all plastics could be replaced with non-petroleum alternatives right now.

Biovation also makes food packaging from bioplastics, designed to extend the shelf life of fresh fruit by protecting it from harmful bacteria. Any new PLA will have to peform as well as, or better than what is already commercially available. Then there's the matter of cost: corn-based plastic, is now being produced so efficiently out West, that durdag says it's actually cheaper than its petroleum-based equivalent.

Belliveau is also the Vice-President of the Sustainable Bioplastics Council of Maine, a newly-created trade association that's trying to help Maine gaine a foothold in the biopastics industry. He says scientists at the University of Maine are planning to produce a plastic resin called PLA, which stands for poly lactic acid, using wood chips and potato waste both of which maine has in large supply. Bioplastics are also touted as environmentally friendly because they're free of the controversial additive found in some plastic items called Bisphenol A, or BPA that many scientists say can impair brain development. Steve Russell is Vice-President of the council's plastics division. Nevertheless, the appetite for alternatives plastics is there, and a number of companies in Maine are interested. In an industrial park near the popular mid--coast vacation town of Boothbay, a startup called Biovation is making PLA from corn starch which is used to make most commercially available 'green' plastics. (Continued in next column) Feb/Mar 2011

Kerem Durdag: "We are manufacturer-agnostic of PLA, we'll use anybody's PLA as long it accomplishes our end goals. "Tom Porter: "But if Maine-based material was available for the same price. "A PLA-manufacturing plant is probably going to cost about USD 200 mio to construct, he says, and that's going to require a lot of venture capital, plus some state funding in the form of R&D bonds.And that wider New England market is potentially worth hundreds of millions of dollars in sales according to Rubin.( 10 March 2011)

Coperion Provides Compounding Systems to Process Biodegradable Plastics Coperion GmbH, which is the result of the merger of Coperion Werner & Pfleiderer, Coperion Waeschle, Coperion Keya and Coperion Hartmann, is a technology leader in compounding systems and bulk materials plants and has installed more than 10 000 compounding systems and 8000 bulk materials handling systems worldwide. The company works in the plastics, chemistry, food and aluminum sectors where it implements individual solutions for customers. The companyâ&#x20AC;&#x2DC;s twin screw extruder is the core element of its compounding systems. (Continued on next page)

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Coperion Provides Compounding Systems to Process Biodegradable Plastics (Contd)

PHA and bio-derived PE to drive bioplastic packaging market to 2020: study Global bioplastic packaging demand is forecast to reach 884kt by 2020. A 24.9% CAGR is expected from 2010-15, slowing to 18.3% in the 5 years to 2020. According to a new study by Pira International, a new breed of bioplastics will be major drivers as packaging market demand gradually shifts from biodegradable and compostable polymers towards biopackaging based on renewable and sustainable materials.

Biodegradability needs to have a specific advantage One example of Coperion GmbH's technological leadership in the biodegradable plastics sector is the processing plant for biodegradable materials belonging to the Portuguese compounding company Cabopol - Polymer Compounds, S.A. based in Porto de M처s. The plant became operational in January 2010 and is the first plant for compounding biodegradable plastics on the Iberian Peninsula. The biologically degradable materials are commercialised by Cabopol as "BIOMIND", and are mainly used for short-lived household and agricultural products, e.g., disposable diapers and sanitary or catering products. "I believe that biodegradable products should always be used in cases where biodegradability is advantageous," said Uta K체hnen explaining that it does not make much sense to use biodegradable plastics in long-lived products. Therefore, the area of technical plastics is to a growing extent turning to the processing of biobased raw materials. "We can also support our customers in this area with our comprehensive know-how on biobased materials which have similar compounding characteristics to classical plastics," said Uta K체hnen. ( 03 March 2011) Feb/Mar 2011

Based on primary research and expert analysis, "The Future of Bioplastics for Packaging to 2020: Global Market Forecasts" analyses the key opportunities and future trends shaping the industry, providing raw material suppliers, processors and equipment suppliers with 10 year forecasts. The report identifies about 50 suppliers of biopolymers for packaging, and presents technology and market forecasts to 2020 for bioplastic packaging by product type, end-use sector, pack type and geographic region. From 2010, bioplastic technology is expected to change with the commercialization of bioplastics produced directly by natural/genetically modified (GM) organisms and the introduction of non-biodegradable, bio-derived polyethylene (PE). Pira expects these materials will account for a quarter of total bioplastic packaging market demand by 2020. Polyhydroxyalkanoates (PHA) are forecast to achieve a CAGR of 41% and bioderived PE a staggering 83% over the period. According to the study, major new technologies will emerge over the next 10 years. U.S. bioplastics producer Cereplast, for example, is planning to launch a range of all-natural algaebased resins by the end of 2010. Also, several companies are exploring the development of bioplastics using carbon dioxide as a raw material. (Continued on next page)

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PHA and bio-derived PE to drive bioplastic packaging market to 2020: study (Contd)

It’s Easy Being Green: Bioplastictastic Reducing plastic usage is critical to a sustainable future but plastics are undoubtedly an integral part of our daily lives. A key solution to cutting plastic use can be found in bioplastics, which are not only made from renewable resources but also biodegrade significantly quicker than conventional plastics. Conventional plastics are made from petroleum, but bioplastics are produced using converted biomass. You‘ve probably seen or heard of cornstarch-based bioplastics. These have been around for over 20 years and continue to constitute a majority market share of biodegradable plastics.

A new sugar-based bioplastic that can be sourced from non-food crops and produced via a low energy process is also tipped to reach the market within the next five years. Rigid packaging has a projected share of 52% of the bioplastic packaging market in 2010 according to Pira, with flexible packaging accounting for the remaining 48%. Europe is the largest regional market for bioplastic packaging with over half of world tonnage in 2010. It benefits from favorable consumer and retail attitudes to sustainable packaging, supportive government policies towards packaging waste recycling and a welldeveloped composting infrastructure. While North America currently trails Europe in terms of bioplastic packaging consumption, government and consumer attitudes are changing. Pira expects North America and Asia to show higher growth rates than Europe for bioplastic packaging over the forecast period. Japan accounts for the lion's share of Asian bioplastic packaging, mostly as a result of favorable government initiatives supporting bioplastic market development. ( 16 March 2011)

Feb/Mar 2011

Scientists, for example, are producing bioplastics from potatoes—a natural candidate because of their high starch content. High levels of potato cultivation worldwide also mean an abundant supply that can help meet the world‘s plastic demand.

Sugarcane is another crop being explored for its bioplastics potential. In fact, Proctor & Gamble, the Fortune 500 consumer goods company, recently announced that it would start marketing and producing sugarcane-derived bioplastics. The entrance of such a prominent company into the field is a boon for the potential future growth of the industry. Perhaps the most promising—and intriguing— substitute for conventional plastic ismycelium, a compound derived from mushrooms. (Continued on next page)

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It’s Easy Being Green: Bioplastictastic (Contd) Mycelium produces a strong, durable polymer when introduced to certain types of organic material. Technically, mycelium isn‘t ―bioplastic,‖ but it has qualities that allow it to substitute for plastic in a number of different capacities. For instance, ―Mycobond,‖ a mushroom-derived material created by entrepreneurs Gavin McIntyre and Eben Bayer, is a green packaging alternative that requires 98% less energy to produce than conventional packaging materials. Mycobond is all-natural, self-assembling, biodegradable, and can be most commonly used as a substitute for packing materials, which are some of the most egregious sources of waste. The sources of bioplastics are diverse, but the benefits are similar. Bioplastics require less energy to produce than conventional plastics, and they are made with renewable biomass. While all bioplastics are created from converted biomass, not all bioplastics are compostable. If you‘re looking to really cut down the ecological impact of your plastic use make sure to use compostable bioplastics. Ultimately, they‘re easy to find, similar in price, indistinguishable from their conventional plastic counterparts, and much less damaging to our planet.( 13 March 2011)

Coca Cola, DuPont, Kellogg's and Others Establish a Trade Organization for Sustainable Packaging Some of the most ubiquitous products on supermarket shelves may soon have greener packaging— Colgate-Palmolive, Coca-Cola, DuPont, Dow Chemical, Kellogg's and others have formed a trade organization to coordinate environmental efforts for the packaging industry. (Continued in next column) Feb/Mar 2011

Coca Cola, DuPont, Kellogg's and Others Establish a Trade Organization for Sustainable Packaging (Contd)

Environmental Leader reports that the Michigan-based American Institution for Packaging and the Environment (Ameripen) will "advocate on public policy relating to packaging and the environment. It will collaborate with trade associations, academic institutions, non-profits and government agencies to facilitate relevant research and data collection." The association, which takes after similar European and British organizations, will take a "material-neutral" approach to packaging and in addition to public policy will focus on education and outreach, issue management, statistics, research strategies, and communication tools. Environmental Leader writes that it "will encourage science-based decision making on sustainable packaging initiatives. It will advocate measures that are environmentally, socially and economically sound, Ameripen said." SmartPlanet points out that some companies, like Coca Cola because of its PlantBottle, already have a vested interested in continuing to improve the sustainability of their packaging, while for others that have run into stumbling blocks—"consider the case of Dell and its bamboo boxes -- this group could help take a load off." ( 10 March 2011)

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Regional Language News

Starch Industry Overview These are the news derived from regional publications,





hence the medium quality of translation.

CHINA The duty-paid price of U.S. corn to China port rose slightly from 10th Feb According to Dow Jones News Chicago on 10th, February, U.S. corn futures closed slightly higher Thursday despite the decline in grain markets around, but the tight U.S. corn supply concerns and the strong export sales data reported by United States Department of Agriculture provide support for the market. U.S. Department of Agriculture report on Thursday showed the U.S. corn export sales of last week exceeded 100 mio t, the second consecutive week more than that, although some traders worried about high corn prices would suppress demand. Arlan Suderman said strong exported sales are the indication of "panic selling", because many countries are eager to lock the supply. This year about 40% of U.S. corn will be used for ethanol processing, the U.S. Department of Agriculture down the forecast of corn supply on Wednesday, major reason is the increasing demand for ethanol industry. Commodity Markets Council will held the annual meeting in Florida on Thursday, Market participants will focus on Chief Economist of U.S. Department of Agriculture, Joe Glauberâ&#x20AC;&#x2DC;s speech concerning what measures the U.S government will take to the continue rising of 31 months high corn futures price. U.S. No. 2 yellow corn, the delivery time is March, FOB price is USD 300.6 per t, together RMB 1 979 per t; The total cost to China after tax is about RMB 2710 per t, compared with the previous day rose RMB 1 per t, with last yearâ&#x20AC;&#x2DC;s same period up RMB 803 per t. ( 11 February 2011) Feb/Mar 2011

Jilin corn prices on 20th,Feb, 2011 Jilin food enterprises continued suspension of the acquisition of corn. Nong An Region traders tentatively set list price of corn at RMB 1920 per t, but there is almost no market. In Si Ping Region, the local stock traders purchase dry provision at price RMB 1950 per t, but the actual purchase amount is very limited. Overall, Jilin native corn prices are still showing strong momentum, this website will continue focusing on post-market situation. Deep processing enterprises in Jilin Province are still under the state of suspension of the acquisition of corn. Most parts of Jilin Province recently are in good whether condition, temperature is generally in the minus 3 degrees to minus 11 degrees , the corn deep processing enterprises in the province including the Changchun and Dacheng area are all still in suspended state of acquisition of corn. Some traders of parts of the main maize growing areas in Jilin Province have been gradually listed price and restored the acquisition, but the actual acquisition situation is quite different. JiuTai Region: Local individual traders currently listed corn with 25% water content at price of RMB 0.83 per kg, but almost no market, the corn shipped after the Spring Festival are all the stock from pre-holiday purchase, the price is RMB 1920 -1930 per t, which loaded to container in Bayuquan port, nobody is willing to send food for local country reservoir. Huadian region: Local stock trader currently purchase corn with 28% water content at price of RMB 0.785 per kg, the cost after drying is RMB 1920-1930 per t, the price of direct acquisition of corn (water content within 15%) is RMB 1950 per t, the acquisition volume is relatively better that other areas in the Province, currently, the daily corn acquisition volume of whole Huadian area is about 4 to 5kt. ( 20 February 2011)

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Corn prices rose in Jiangsu market last week

Corn prices rose in Jiangsu market last week (Contd)

According to market monitoring, Jiangsu corn market rose last week. In the South part, Nanjing region, the arrival price of the Northeast origin second corn (with 14% water content) is at RMB 2150 per t, the price is keeping same with last week. Wuxi market is RMB 2.24 per kg which rose RMB 0.02 per kg comparing with last week.

Firstly, a number of processing enterprises like Zhongliang, suspended acquisitions corn in the Northeast to give way to the reservoir, though the acquisition progress is not satisfactory.

In Changzhou region, the arrival price of first rate Tongliao origin corn is at RMB 2 160 per t, up RMB 20-30 per t; North China corn, arrival price RMB 2150 per t, up RMB 10-20 per t, water content less than 15%; Huanghuai corn, arrival prices is about RMB 2060-2080 per t, up RMB 20 per t, water content 15% or so. The wholesale price of corn in Taixing market located in central of jiangsu province is RMB 1.08 per kg, up RMB 0.01 per kg and the retail price is RMB 1.12 per kg, up RMB 0.02 per kg. Wholesale price of Rugao region remained at RMB 1.04 per kg and the retail price is about RMB1.07 per kg, up RMB 0.02 per kg. Xuzhou east market, in Northern region of China, the average origin corn purchase price is RMB 1.05 per kg, up RMB 0.03 per kg, individual high grade corn prices rose to RMB 1.06 per kg, of which the village home purchasing price by individual grain broker is RMB 1.01 per kg; feed processing enterpricesâ&#x20AC;&#x2DC; purchase price is RMB 1.06 per kg; Farm purchase price is RMB 1.06 per kg; state-owned enterprises purchase price is RMB 1.02 per kg. The price of Xuzhou market is RMB 1.04 per kg, up RMB 0.02 per kg; Prices in southern Shandong market is 1.05 yuan / kg, up RMB 0.03 per kg. Lianyungang market price is RMB 1.02 per kg, upRMB 0.01 per kg. Corn prices will rise slightly later. (Continued in next column) Feb/Mar 2011

Although most companies are gradually suspended corn acquisition in Northeast, China Grain Reserves Corporationâ&#x20AC;&#x2DC;s purchasing progress in local has not thus been strengthened. The main reason is : Despite a substantial increase of corn purchasing and storage price in the Northeast this year, but compared to market prices, the policy of increasing purchasing and storage price is of no advantage at all, pressure of corn prices going up continue to increase later. Secondly, the Northeast stop production of starch, domestic starch prices rose rapidly, in the North China, starch and corn prices rise in the meanwhile. Northeast deep processing enterprises have ceased production to make way for the reservoir, the domestic supply of starch reduced and prices rose fast. According to our understanding, the profit of starch companies is relatively high, obviously raising corn price has its significance. Thirdly, there is no price advantage of imported product temporarily but will have long-term and increasing impact on the domestic market. As the increasing corn price of international market, imported corn prices has lost its advantage. U.S. Gulf No. 2 yellow corn, the delivery time is March, FOB price is USD 276 per t on 25th,Jan, together RMB 1818 per t; The total cost to China port after tax is about RMB 2562 per t. Corn import is expected to be a sharp fall in the coming months. However, in the long run, domestic corn demand is with a rigid growth, importing corn to fill the lack of corn in domestic market will be a norm, the international corn prices have great impact on the domestic market ( 21 February 2011)

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February 24 corn early assessment: Focus on supply worries the U.S. corn closed higher rebound

Agricultural information: part of compound fertilizer enterprises intent to increase price

Chicago Futures Exchange (CBOT): Corn futures closed higher on rebound in 23 markets. Most active CBOT 5-month contract corn futures closed up 12 cents, or 1.7%, to close at USD 7.02 1/4 per bushel.

Corn starch

Analysts said they expect the market will hit a new high in the coming weeks. Analysts said rising corn prices need to ease the demand and to attract farmers to expand acreage this spring to add supply. Large acreage can not ease market concerns, because the bad weather also hurt corn crop. Later this week, the U.S. Department of Agriculture Outlook Forum at its annual meeting, announced its estimate of crop acreage and supply. Last week the government released the report of the baseline forecast than expected corn plantings, to help drive down prices.

The corn starch market is active generally today, general price rise by RMB 50 per t in different area. The mainstream ex-factory price is RMB 3200-3300 per t in Shandong region, Hebei region is RMB 3000-3050 per t, Heilongjiang region is RMB 2900 per t, Jilin and Liaoning region is RMB 3000-3020 per t. At present the overall inventory levels in northern areas is general, individual small manufacturers reflect that the supply is a little tight. Most traders and downstream processing enterprises in southern area market currently are still waiting and watching the situation , but the market inquiry increased, the market trend is expected to be more clear this week with the gradually adjustment of starchâ&#x20AC;&#x2DC;s price, but these two days, starch price will still mainly increased.

Dalian corn futures sharply Tiaokongdikai 23, and was test a low, late pared losses, the major 1109 contract closing price of RMB 2 392 per t, down RMB 47 per t. Overnight rebound in U.S. corn closed up disk, and the domestic corn supply and demand situation is tight, and strong domestic stock situation has not changed, is expected to be limited downside corn market outlook, market consolidation low bias. In addition to external disk impact, the domestic market is relatively stable, cash corn prices remain strong pattern of postganglionic operating rate of recovery in maize production company, is boosting demand for corn. Overall, the corn outside the tray to adjust to follow the bad digestion, but the market remains bullish potential, after a period of consolidation, the corn is expected to gradually stabilize, downside is expected to remain limited. ( 24 February 2011) Feb/Mar 2011

Potato starch Inquiry in potato starch market increased after the year holiday and have great intention to increase the price, some bargain-hunting traders to hoard goods, the ex-factory price of potato starch is slightly increased, the transaction price of Yunnan superior grade flour price increase by RMB 500 per t, some manufacturers in Gansu and Ningxia region raised by RMB 300 per t. (Continued on next page)

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Agricultural information: part of compound fertilizer enterprises intent to increase price (Contd)

Agricultural information: part of compound fertilizer enterprises intent to increase price (Contd)

Individual manufacturers‘ offer have a tentative rise, Yunnan potato starch enterprises have a strong intention to pull up and increase the price on behalf of "Verbatim", Yunnan "Verbatim" potato starch manufacturers to offer tax-included price at RMB 13 200 per t, the ex-factory price is RMB 12800-13000 per t, the price of goods going between friends is RMB12 500 per t, the transaction price increase by RMB 500 per t.

Sugar Wholesale market in Liuzhou kept the shock consolidation trend in the morning, except the 023 contract‘s price falling at closing time of this morning, the rest contract price all rose between RMB 4-28, the closing price of 023 contract was RMB 7 299, the offer is RMB 15 down, affected by this, today‘s spot price of the main producing areas is generally steady and sugar Group Sells at Proper Price, transaction is generally subdued. The spot price slightly lower in East China, Central China and Central Plains region, the price is RMB 7 520 per t in Shanghai, down RMB 30 per t compared with the previous trading day, and the rest area‘s turnover was subdued; In most parts of western South China, the price is adjusted, the turnover is generally light; The price of North China and Northeast China go up and down alternately and trade is subdued. Sugar price is expected to be weaker in the stable state. ( 16 February 2011)

The price of Dutch "windmill" brand potato starch Guangzhou market is RMB 370 per bag, the price increased by RMB 30 per bag, equivalent to RMB 14 800 per t‘s high prices. Yunnan "Verbatim" and Dutch "windmill" potato starch tentatively increased price after new year initially which boost the overall market raising of the potato starch price, the offer of first grade potato starch in Gansu and Ningxia region has an intention to increase and the ex-factory prices range is large, between RMB 11 000-11 500 per t, the arrival price of the Frontier Snow" brand of first grade potato starch powder in Guyuan Ruifeng of Ningxia province, is RMB 11300-11600 per t, up RMB 300 per t. (Continued in next column)

Feb/Mar 2011

Global corn prices rising highly and Chinese increasing imports of Australian feed distilled grains sharply Since the New Year holiday, along with the temperature rising, there are many talks about food prices. Recently, the reduction of Global Supply of Corn and the increasing price attract much concern both in domestic and international market. Most industry insiders believe that the corn price is likely to rise and may exceed the 2008 record of USD 8 per bushel due to the strong demand, lacking of planting area, weather risk and so. The Current Market Price of corn futures in Chicago reached USD 7 per bushel. (Continued on next page)

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Global corn prices rising highly and Chinese increasing imports of Australian feed distilled grains sharply (Contd) According to yesterdayâ&#x20AC;&#x2DC;s China Maize Network information, the exit price of corn (water content within 15%) in the Northern Port is RMB 2140-2150 per t, up about RMB 10-20 per t than previous day. Corn purchase price is RMB 2 060 oer t within the Port, up RMB 10 per t. Despite the small transaction volume, many traders remain believe the price will rise later. Guangdong market which is the important national corn sales areas, has been also affected by the recent bullish Market, the corn price is basically RMB 2239 per t. According to sources from the Port-related staffs in Guangdong, the Current Maize stocks in Guangdong ports is about 0.3 mio t, the transaction volume is expected to gradually increase after the Chinese New Year Holiday. The selling peak came from the first week of last month, Corn price had dropped slightly, but farmers generally hold the corn and hope price to raise, in addition, the development of animal husbandry looks well, so demand for feed corn rose further. It is believed that more and more enterprises will gradually start to purchase the corn, and with the wheat affected by drought, it is not surprising that corn price continue to rise Imported distilled grains instead of corn in China US Grains Council had expected China's corn import in 2011 will reach 9 mio t, but because of soaring prices, some of the imported plan has been canceled. In fact, the imported dry distilled grains from United States had exceeded 2.9 mio t, replacing 1.5 mio t imported corn. Under the situation of rising grain price, it has been a consensus of lot of analysts to import large quantities of dry distilled grains. ( 18 February 2011)

Feb/Mar 2011

RUSSIA Production of starch in Belarus in January-June increased by 35,8%, products from potatoes - by 1.8% Production of dry starch in Belarus in the first half of 2009 amounted to 4.842kt, up 35.8% over the same period last year, told Interfax-West "in the National Statistics Committee (National Statistics Committee). Enterprises Belgospischeprom up to six months have produced 1.167 t of starch, which is 1,2% less than in January-June 2008, the enterprises subordinate to the oblast executive committee 2.213kt (67.5% more), city hall - 903 t (34,8% more), National Academy of Sciences of Belarus 509 t (29,2% more). Manufacture of potato products in Belarus in January-June 2009 amounted to 2.553 m and increased compared to the same period last year to 1.8%. The largest volume of such products have made the company Belgospischeprom - 1.76kt, which is 12.2% less than in January-June 2008. Legal entities without departmental affiliation in January-June produced 733 t of potato products, which is 62,5% more than the same period of 2008, Belkoopsoyuz - 41 t (36,7% more). Enterprise NAS of Belarus produced 15 t of potato, which is 16.7% less than the same period last year. Production of dry potatoes during January-June was 36 t (67.3% less than the same period in 2008). Starch reserves in the warehouses of the enterprises on July 1 totaled 6.86 t, which is 8.5 times greater than the average monthly production of potato products - 361 t (84,8%), dry potatoes -8 t (133.3%). ( 04 March 2011)

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Sheikh invests in ethanol plant On the basis of the sugar Babinski Illinetskogo district Vinnitchina build a plant for producing ethanol - alcohol is added to the fuel. 100 mio euros invested in the construction of the United Arab Emirates and Swiss Finance Facility and the company Bestinvest. Sheikh Arab Emirates is interested in building complex Babinski - says Chief Financial Officer "Bestinvest Ivan Nemirovsky. - In the city of Dubai building world's largest oil refinery walked. Since its launch Arab Emirates will begin to sell ready-made diesel fuel and gasoline. The most predictable market for them is Europe. EU standards require that gasoline was at least 10% ethanol. He will be extracted from corn. From the residual mass will produce a dry granular bard highprotein and protein. She fed cattle. The plant will produce 320 thousand liters of ethanol per day. To do this, 70 thousand hectares of corn. To organize the production investors plan to open a railway station Dashivskaya. At the plant will create 200 jobs. ( 25 March 2011)

EUROPE Nuplas begins construction of a plant to produce bioplastics for packaging Nuplas (York, UK) launches the construction of the plant to produce bioplastics second generation, based on polylactic acid (G2 PLA). Biopolymers will be used in the manufacture of packaging, wrote Plastinfo. To build a plant with capacity of 5kt per year required an investment of 11 mio pounds (EUR 13 mio). (Continued in next column)

Feb/Mar 2011

Nuplas begins construction of a plant to produce bioplastics for packaging (Contd) Raw materials for the new production - namely, lactide will be delivering in the Far East. Approximately 1.2 mio pounds of investment funds will be used to manufacture about 1kt of G2 PLA with the use of industrial outsourcing for obtaining approval from the manufacturers packaging. It is expected that the demand for biodegradable polymers will be the manufacturers of thermoformed packages, as well as packaging films for fresh food and supplies to the short shelf life. Founder Nuplas Peter Reineck believes that the production of PLA from wheat and other crops in the UK would be profitable and environmentally friendly. He said that the projected demand for such materials in the EU increased in 2025 to 650kt per year and the plant in the UK will be able to capture up to 20% of the market. According to Mr. Reineck, there are a number of market drivers for biodegradable materials. They include the replacement of petroleum-based polymers, reducing emissions of carbon dioxide in the atmosphere, the guaranteed delivery system that will reduce dependence on oil and give the opportunity to receive renewable energy from recovered waste. Currently, the European Union is working on an adaptation program of bio-products and Reineck believes that such a program can be implemented within 12 months. PLA polymers are the first generation are imported from the United States and revealed the existence of a market for such materials, but they have a relatively small number of applications. Nuplas has a single European license for the technology to produce bioplastic second generation, based on polylactic acid (G2 PLA). In the long run, the plant hopes to increase production capacity to 130kt per year. ( 28 February 2011)

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Quotas on exports of maize will be distributed at the auction

South Africa: estimates of corn production down (Contd)

The distribution of quotas for export of 2 mio t of maize from Ukraine in the second quarter of 2011 will happen at auction. This was reported by Minister of Agrarian Policy Nicholas Prisyajnyuk.

In particular, the collection of white maize is estimated by analysts at 6.26 mio t, while yellow â&#x20AC;&#x201C; 4.6 mio t.

"Tuesday will consider a bill of auction that is open bidding, and money from the distribution of quotas will be spent on upgrading the grain industry," - he told journalists in Odesa.

The downward adjustment index was the result of excessive drought in the corn belt of the country, which reduced grain yield. In addition, evaluation of the acreage of maize in this period was also lowered to 2.37 mio t against 2.38 mio t last forecast.

Recall that in early October 2010 the Ukrainian government introduced quotas for grain export in the period up to December 31, 2010. Late last year it was extended until March 31, 2011. In this case, the total size of quotas has been increased by 1,5 mio t to 4.2 mio t.

We note that recent estimates of experts CEC regarding the production of maize in South Africa in 2009/10 were published on the level of 13.1 mio t. ( 25 March 2011)

VIETNAM As reported before, the government decided to extend the quotas for grain even in quarters, increasing the quota on the export of maize by 2 mio t. During this time the quotas were distributed twice a way that caused then sharp criticism from market participants: Many companies were unable to get the opinion of the Ministry of Agrarian Policy and the availability of food grains, which are necessary for applying for a quota. ( 31 March 2011)


Floor price of rice exports increased 2.1% to USD 490 per t Rice exports from Vietnam rose to meet a demand from neighboring countries in Asia and Africa, helping to reduce pressure on real wages and inflation in the region affected by the political crisis Libya and natural disasters in Japan. Of VFA data showed that rice exports from our country so far this year average USD 478 per t, FOB, up nearly 2% over the same period last year.

South Africa: estimates of corn production down According to official sources, the experts state analytical agency Crop Estimates Committee (CEC) lowered its estimate of corn production in South Africa in 2010/11 MY (May-April) to 10.83 mio t against 11.04 mio t last forecast. (Continued in next column) (Continued on next page)

Feb/Mar 2011

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Floor price of rice exports increased 2.1% to USD 490 per t (Contd)

Floor price of rice exports increased 2.1% to USD 490 per t (Contd)

Our country's rice supply is now plentiful through the winter-spring rice crop in the Cuu Long River Delta provinces. So far, farmers here have harvested 81 000 hectares of crops, with paddy output is estimated at 5.35 mio t. Harvest is expected in the first half ended in April.

The NFA said it was pleased to get a good price this time with 200kt of rice imported from Vietnam. Philippines plans to buy more rice from Vietnam in the second quarter.

Although plentiful supply but the price of rice increased the prospects of our country is in coming weeks following information in the Philippines bought 200kt of rice between the two governments agreed. Date 23/3, National Food Agency Philippines (NFA) has agreed to import 200kt of rice from Vietnam for this year plans to buy rice before the harvest begins in July. NFA rice is negotiating with Thailand. Thai traders said they would be hard to achieve greater agreement with Manila as the price of rice higher than Thai rice of Vietnam. Experts said that the Philippines for rice is very good now because the world rice price has declined significantly due to the countries from Asia to Africa has abundant reserves of wheat, corn and soybeans to stop food inflation. Under this agreement, the Philippines to buy 25% broken grade rice for USD 480 per t, lower than the budget projected USD 550 per t C & F. This move to FOB price is USD 440-445 per t - less than the floor price by the Vietnam Food Association rules are USD 470 per t applied 24/3 but still higher than actual transaction prices our present. Date 23/3, 25% broken rice price in Vietnam at USD 410-415 per t, FOB Saigon Port. In Thailand, 15% broken rice price, customers typically purchase price Philippines 475-480 per t, FOB.

Feb/Mar 2011

In addition, stable demand from China will also assist Vietnam's rice price. From mid January to now, China has bought 70kt of rice from Vietnam. Vietnam Food Association said it would raise the floor price of rice exports since 24 March 2011. Accordingly, the floor price of 5% broken rice exports increased 2.1% to USD 490 per t, 25% broken rice floor price rose 2.2% to USD 470 per t. The prices on the FOB price packing is 50 kg per bag. Thus, from the beginning of this year, VFA has adjusted prices seven times. Latest, on 20/3, VFA adjust rice export floor price reduction of 5% broken from USD 500 per t to 480 USD per t and 25% broken rice from USD 480 per t to 460 per t. ( 25 March 2011)

China demand boosts cassava price Due to demand from mainland China, traders are buying large quantities of cassava, causing the domestic price to go up 40-45% compared to last year. The export cassava price also increased during this period.

(Continued on next page)

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China demand boosts cassava price (Contd)

China demand boosts cassava price (Contd)

According to the Viet Nam Market Analysis and Forecast Joint-Stock Company Agro-Monitor, domestic sliced cassava is selling for VND 6 300 per kilo.

The Ministry of Agriculture and Rural Development said this year, the areas for growing cassava was about 500 000ha, with output of about 8.9 mio t, higher than last year‘s output of 8.52 mio t.

The export price of tapioca starch to China has increased to USD 550 per t. The Plant Quarantine Sub-Department of Region VIII said 350-400 t of cassava were being exported to China daily through the border gate at Lao Cai. In October last year, Chinese traders travelled to Viet Nam to pay deposits to agents in Phu Yen, Lao Cai, Yen Bai and Lai Chau provinces to buy cassava. The Chinese market has faced a large shortage, especially of the cassava varieties and sliced cassava.

According to an annual report of the cassava and tapioca starch industry and AgroMonitor‘s forecast, this year‘s total demand for fresh cassava for domestic production is about 8.12 mio t. That includes 1.89 mio t for ethanol production; 2.67 mio t for foodstuff processing and animal feed production; and 3.56 mio t for tapioca starch production. Thus, there is only 780kt for export, equivalent to 355kt of dried sliced cassava.

The domestic traders have taken full advantage of the situation to collect fresh, dried and sliced cassava as well as cassava varieties to transport to Quy Nhon port in central Viet Nam for export to China.

However, China has begun increasing its imports of sliced cassava and fresh cassava, which could increase VietNam‘s exports up to 4-5 mio t.

The Phu Yen Department of Agriculture and Rural Development said in 2010-11 crop the province grew 12,500ha of cassava, with an estimated output of 200kt. However, the current cassava purchases are expected to cause a shortage of cassava varieties and affect production and long-term cassava cultivation.

As a result, the domestic tapioca starch processors and animal feed producers will face severe competition in buying raw materials. Experts said a long-term development strategy for the industry should be created, including solutions that would balance the supply and demand for exports and raw material supply for domestic production. ( 23 March 2011)

According to the Customs General Office, Viet Nam exported 1.667 mio t of cassava, earning a turnover of USD 556 mio last year. Sliced cassava accounted for 56.8% and tapioca starch 42.9%. China remained the biggest importer of Vietnamese cassava last year, accounting for 94.8% of the total export turnover. (Continued in next column)

Feb/Mar 2011

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Starch Italics 9th Edition  

Starch Italics 9th Edition