In a recent official media statement China must limit its corn-based ethanol fuel production capacity to suit its agricultural needs and lessen its dependence on foreign sources.
China’s authorities have been calling for food security to feed the world’s most populated nation. On Thursday, the Economic Daily said that China utilizes more than 60% of its maize for animal feed and 20-30% for industrial usage. The fast construction of corn-based ethanol fuel capacity is flooding the market and rising grain prices. The post warns that the corn-supply shortage threatens food security and urges further action.
“The processing of corn-based ethanol fuel must serve the overall situation of national food security,” the commentary said. “The country, with a large population but limited arable land, is always faced with maintaining a fine balance between food supply and demand.
“We cannot process grain-based ethanol fuel on a large scale like the United States does. Doing so would jeopardise the fundamentals of food security.”
Corn ethanol, produced from corn biomass, is the main source of ethanol fuel in the US. China started producing corn-based ethanol fuel in 2000 as a means to utilise an excess supply of corn. Domestic corn output gradually declined from 2016-18 before trending upward, with sharp increases in the last couple of years.
Since last year, China has been putting more controls on processing corn-based ethanol fuel, shifting from a policy of “moderately” developing grain-based fuel ethanol that was put forth in 2017.
“If the unlimited production of corn-based ethanol fuel leads to a local supply deficit, China would be obliged to import enormous quantities of corn, which would fundamentally disrupt the domestic supply-demand dynamic and imperil the corn industry and food security,” the editorial said.
The Foreign Grain Suppliers
Beijing has been on high watch for foreign grain suppliers, particularly amid rising geopolitical tensions with the US and global market disruptions caused by Russia’s invasion of Ukraine.
- According to government figures, China produced 277 million tonnes of grain in 2022, up 1.7% from 2021. In the first 11 months, grain imports fell 26.9% to 19.75 million tonnes. From 2020-21, grain imports hit historic highs.
- The US Department of Agriculture and China’s National Bureau of Statistics’ maize production was 6.44 tonnes per hectare last year, up 2.3% from 2021 but still far behind the US 10.88 tonnes.
- China imports most grain and soybeans from the US. According to US agriculture records, soybeans were the biggest US agricultural export to China in 2021 at US$14.12 billion, followed by maize at US$5.06 billion, four times the 2020 amount.
- There’s also increased soybean output, another key animal feed ingredient, and plans to continue. To cut China’s imports, soybean plantations have compressed corn acreage.
- They also planted 43.07 million hectares (106 million acres) of maize in 2022, down 0.6% from 2021. It planted 10.27 million hectares of soybeans, up 21.7% from 2021.
Thursday’s statement also advised China to limit its ethanol production from maize, rice, and wheat as it transitions to renewable energy. Sugarcane, cassava, and maize stalks might produce more ethanol.
China wants peak carbon emissions by 2030 and carbon neutrality by 2060.
Last year, Lin Caiyi, vice president of a research centre under the China Chief Economist Forum, projected the supply-demand imbalance for maize in China would reach 24.33 million tonnes in 2020 and for soybeans, 94.93 million tonnes. The Ministry of Agriculture and Rural Affairs promoted soybean and corn belt composite planting techniques in 16 provinces to boost soybean yield and stabilize corn production.
Feature Image: Pixabay
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