China's turn to HFCS exports 'could be start of something big'
China's exports of high fructose corn syrup to the Philippines, where sugar producers are protesting at the trade, could be the "start of something major" in the sweeteners market, if use spreads in Asia.China has been, up to now, the only substantial user of high fructose corn syrup (HFCS) in Asia, with use equivalent to some 4m-5m tonnes a year, said Robin Shaw, analyst at London broker Marex Spectron.However, imports by the Philippines of 235,000 tonnes of HFCS last year, according to customs data, equivalent to some 352,000 tonnes of sugar, and trade which prompted the country two weeks ago to impose curbs on corn syrup."HFCS is significantly cheaper than locally-produced sugar," according to a US report which said that the imports had "driven down sugar prices" in the country by some 17% since September.Indeed, Mr Shaw said that the imports could be a sign of a structural shift in sweeteners users towards corn syrup - a move which would be "anti-bullish" for sugar prices.'Start of something major'"It looks like HFCS is invading the world sugar market more," Mr Shaw told Agrimoney.com.
"The increase in China's HFC exports at the moment could be start of something major," if it catches on in in the region, which includes some large sugar importing countries, including Indonesia and Malaysia - besides China itself.Indeed, it could prove "another nail in the coffin" of the bullish sugar story, as "the world adapts to high sugar prices", with New York raw sugar futures standing above 21 cents a pound as recently as last month.May futures on Monday stood at 17.59 cents a pound, down 0.7% on the day.HFCS vs sugarThe apparent paradox of China, the world's biggest sugar importer, becoming an exporter of HFCS comes despite a large incentive from prices for the country to consume the grain-based sweetener domestically....MORE