2021-2022 Edible and Industrial Ethanol Annual Data Interpretation
Summary: In the recent five years, China’s edible and industrial ethanol industry saw oversupply and faster supply expansion for most of the time. With more new entrants before 2020, oversupply remained in 2021 while the capacity expansion slowed down. Meanwhile, with high costs, China’s ethanol price continued to fluctuate at highs in 2021. In addition, changes in the profits of producing ethanol with different feedstock also changed the supply and demand patterns. In 2021, the supply of cassava-based ethanol took a larger proportion with cost advantages.
1. Feedstock proportion in edible and industrial ethanol supply changed greatly.
The profit exerted great impact on the output and operating rate of the edible and industrial ethanol industry in recent five years. The grain-based ethanol enjoyed higher profits than other feedstock, and the output took up a large proportion. However, the profit turned negative in 2021, so the output declined. As for the cassava-based ethanol, its production suffered profit losses from 2018 to 2019, and its output accounted for a small proportion. In 2021, its profit started to grow affected by the feedstock supply increment in Southeast Asia, so its output proportion increased. Due to profit losses, the output of molasses-based ethanol and synthetic ethanol took a small proportion.
2. The operating rate dropped by 11% Y-O-Y.
The output of China’s edible and industrial ethanol grew slowly in the recent five years, with an CAGR of 1.49%, and the operating rated showed an overall downtrend. SCI reckons that in 2021, the output will decline from 2020. The main reason for the decline in the operating rate was the faster capacity growth than that of demand. Another reason was the great increment in the net import volume in 2021.
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