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China to limit expansion of corn processing industries

Published on 20 September, 2007, Last updated at 03:27 GMT
 
20/09/2007

China is tightening controls on the use of corn for industrial purposes, including biofuel processing, the government said Thursday.

The National Development and Reform Commission, in a notice on its Web site, said it would stop approving new projects involving use of corn for industrial purposes and would suspend those not already under construction.

New projects to build plants to convert corn into fuels such as ethanol are also banned.

The restrictions, which also bar foreign investment in such industries, were imposed to "correctly handle corn production, keep food prices stable and ensure food security," the economic planning agency said.

The agency noted that development of corn processing industries had been "excessively fast" in some areas.


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The move to restrict industrial use of corn comes amid a broader effort by the authorities to control surging food prices that have pushed inflation to an 11-year high.

China's corn consumption totaled 134 million tons last year, with feed for livestock and poultry accounting for 64 percent and industrial processing 27 percent, the NDRC said.

Output is forecast to rise to 150 million metric tons in 2007, up 14 percent from the year before, matching expected domestic demand for around 150 million tons.

The government also said it would encourage corn processors to set up corn production bases in other countries, to "take advantage of global land resources."


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