China's National Grain Bureau last week announced that it will carry out a special statistical survey of companies that process corn. Presumably, this is another measure designed to rein in the aggressive expansion of corn consumption by industrial processors.
The survey will cover enterprises that produce starch-based products and alcohol made from corn in major corn-producing provinces: Hebei, Inner Mongolia, Shandong, Jilin, Heilongjiang, Liaoning, Henan, Anhui, Shanxi, Shaanxi, and Ningxia. Companies have to report their processing capacity, volume of output, exports, average prices, profits, planned expansions, and use of corn per unit of final product. They have to report energy use and environmental impact--two factors that are often cited in government documents as criteria for shutting down plants in order to trim excess capacity.
The survey apparently is intended to address problems with inaccurate (perhaps falsified) statistical reporting. The survey is described as ensuring that statistics are accurate and complete. The survey was prompted by rapid increases in corn processing during 2011. The description of the survey notes in particular that modified starch and corn-based alcohol production numbers were understated in 2011. (There have been rumors afloat that production of fuel ethanol exceeds the official estimates.)
Producers of basic starch and animal feed are not included in the survey. This reflects the concern of officials that robust use of corn for high-value industrial products is increasing the competition for corn. Feed mills--the dominant users of corn--have to pay higher prices which are passed on to livestock producers and to meat consumers. Last year, the head of the grain bureau warned that corn use by processors in some regions was growing too fast, and the government needed to adjust its control and planning of the industry to ensure the supply of feed and keep prices stable.
The survey is supposed to make sure that data is consistent with supply-demand balance statistics from other sources. The survey will be the basis for a statistical reporting system that will be used to monitor the industry, presumably to keep track of its use of corn. State-owned enterprises of the central government and large processors with capacity of 100,000 metric tons will be required to report data directly to their county grain bureau.
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