New Kerala. China has suspended further expansion of its corn ethanol industry in order to halt a rapid increase in corn prices, which climbed almost 5% in November.
The National Development and Reform Commission (NDRC) has ordered local governments to stop approving new projects that process corn for industrial uses, to use non-grain feedstocks to produce biofuels (e.g., cellulosic ethanol from biomass), and to develop the industry more effectively.
China processed more than 23 million tonnes of corn for industrial use last year, an increase of 84% from 2001, while output of corn only grew by 21.9% over the same period. China currently produces around 10 million tonnes of ethanol annually (3.3 billion gallons).
Ethanol mixed with gasoline is sold in five provinces and 27 cities in China, accounting for 20% of the country’s total gasoline consumption.
Expanding industrial demand, along with increasing need for corn by livestock and the reluctance of corn growers to sell in expectation for higher prices, have contributed to a 6.8 per cent rise in the price of corn this year.
“Excessive expansion of corn growing will squeeze the production of wheat and rice,” an official with the NDRC said.