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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: energyplay who wrote (12819)	12/22/2006 11:17:52 AM
From: elmatador	Respond to of 218155

China has suspended further expansion of its ethanol industry as processing corn for fuel and other industrial uses is being blamed for soaring grain prices. With grain prices rising almost five percent in Nov., the National Development and Reform Commission (NDRC) has ordered local governments to stop approving new projects that process corn for industrial uses. The order, from China's top economic planning body, urges local governments to use non-grain vegetation to produce bio-fuels and develop the industry more effectively. China is now producing 10 million tons of ethanol which is mixed with 20 percent of the country's gasoline. China processed more than 23 million tons of corn for industrial use last year, an increase of 84 percent from 2001, while output of corn only grew by 21.9 percent over the same period. 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 percent rise in the price of corn this year. "Excessive expansion of corn growing will squeeze the production of wheat and rice," said an official with the NDRC, who would not provide his name. The rapid expansion of the corn processing industry will hurt the industry's development, he noted. China has approved four pilot ethanol projects, with annual output of 1.02 million tons. Ethanol mixed with gasoline is sold in five provinces and 27 cities in China, accounting for 20 percent of the country's total gasoline consumption. The price of major grain products, including rice, flour and cooking oil have surged recently in many Chinese cities. Figures with the National Bureau of Statistics show that the price of grain products rose 4.7 percent in November.