2022 Ethanol Industry Highlights
1. Cassava slice price hit a record high since 2019 in 2022.
According to SCI, the price of cassava slice (FOB Thailand) reached $295/mt in 2022, hitting the record high since 2019. The average price was $266.32/mt, up 4.15% from 2021. Prices of most agricultural products increased in 2022, and the production enthusiasm of cassava-based ethanol producers was high, giving certain support to the price of cassava slice.
SCI view: China’s cassava-based ethanol producers mainly used imported cassava slice as feedstock. As the major feedstock to produce cassava-based ethanol, the price of cassava slice exerts certain impacts on that of cassava-based ethanol. In 2022, the correlation coefficient between prices of cassava-based ethanol and cassava slice was at a high level of 0.69, up 0.2 from 2021, indicating a strong impact of cost on the price.
2. Corn prices continued to run at highs in 2022.
According to SCI, China’s corn prices continued to stay at highs in 2022, some even hit record highs. Therein, the corn price in Shandong hit a record high in end-November. The purchasing price of corn in Shandong was RMB 3,270/mt. The highest price in 2022 increased by 3.81% from 2021. The corn price in Northeast China also hit a yearly high in early December, while it was lower than the record high in March 2021.
SCI view: China’s corn prices remained at a high level in 2022. Although the profit from producing corn-based ethanol improved, it was either negative or around the break-even point in most months, leaving certain cost pressure on producers. The prices of ethanol and corn showed a similar trend.
3. Molasses price hit record high in 2022.
According to SCI, in 2022, the highest molasses price in Guangxi reached RMB 1,850-1,900/mt, hitting a record high since 2017. The average price in 2022 was RMB 1,683/mt, up 7.13% from 2021. In recent years, China’s supply of molasses fluctuated limitedly. The price increased year by year supported by the rising demand from the yeast industry. In addition, the demand from the fodder industry improved, so the market price continued to rise.
SCI view: China’s molasses-based ethanol producers are mainly in Guangxi and Yunnan, where are the major production areas of molasses as well. In recent years, China’s supply of molasses fluctuated limitedly. The price increased year by year supported by the rising demand from the yeast industry. In addition, the demand from the fodder industry improved, so the market price continued to rise. As the feedstock to produce molasses-based ethanol, the price of molasses exerted great impacts of production cost of molasses-based ethanol. In 2022, molasses-based ethanol producers with organic fertilizer as by-product merely saw positive profits from January to March and from November to December. Under the cost pressure, the price of molasses-based ethanol showed a different trend from those of ethanol based on other feedstock. In 2022, the correlation coefficient between prices of molasses-based ethanol and molasses increased by 0.34 Y-O-Y to 0.93.
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