Global Market Outlook on Corn

  • The global supply of corn has been rising at a CAGR of 5.3 percent over five years. Global production in 2018 – 2019 is forecasted to reach 1,056 MMT
  • The key factors driving the growth include consecutive record production in the US and China and demand from end-use segments, such as feed and corn starch processing industries

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  • With respect to corn processing end uses, the global sorbitol market is set to rise by a CAGR of 3.6 percent, while the corn starch market could rise by a CAGR of 4.8 percent in the coming years. This is driving the increase in corn demand for the US and China
  • Corn prices are expected to scale down in the current season, owing to the entry of harvest crops. Thus, large buyers, could choose spot buying until December to achieve cost benefits and enter into contract post November
  • Prices could trend upward by approximately 2-4 percent, owing to the increasing FSI use of corn, which is projected to rise by approximately 2 MMT in 2018 – 2019 compared to the previous marketing year 

Global Supply–Demand Analysis

  • The global production has risen by approx. 23 percent over a five-year period as a response to the rise in demand by approx.18.5 percent during the same period
  • The major drivers of demand and supply are the end-use industries, such as corn starch and animal feed, which influences the price trend
  • Over a five-year period, the global corn demand has risen by approx. 8.4 percent, chiefly driven by ethanol production and feed demand 
  • The US and China are the top consumers because end-use segments are mainly concentrated in these countries
  • With respect to the corn processing end-use segments, the global sorbitol market is set to rise by a CAGR of 3.6 percent, while the corn starch market could rise by a CAGR of 4.8 percent in the coming years. This is driving the increase in corn demand for the US and China

Global Corn Trade Dynamics 

  • LATAM countries have traditionally been competitors of the US for exports, but the US is projected to increase its market share close to 34 percent, in 2017/2018, which would be nearly double that of the market share of LATAM
  • Exports from the US is expected to witness a downward trend in 2018, owing to the trade war and positive outlook for Brazil in the international market

Corn Starch Supply–Demand Analysis

  • It is estimated that ~62.2 MMT of corn starch was produced in 2017. The major regions for corn starch production and the potential suppliers are the US, China, certain regions in the EU, and Asia (other than China). The global corn starch market is expected to grow, staggering by 4.85 percent in the forecast period
  • The global starch production was ~85 MMT as of 2017. Out of this, 53 percent is used for starch sweeteners, 11 percent goes into modified starches and 36 percent into native starches. of which, 68 percent and ~50 percent are corn-based, respectively.
  • Corn starch is used in the manufacture of sweeteners and sorbitol. China is a major player in the sorbitol market, which, in turn, facilitates the manufacture of Vitamin C. Corn starch is thus important for the country
  • The US and China are the major producers of corn starch, holding about 30 percent and 28 percent of the global share, respectively. The US-based global companies, such as Cargill, Roquette, and ADM, among others, possess nearly 70 percent of the sorbitol market, and thus utilize corn starch
  • Therefore, the key regions to focus on for the suppliers are the US, China, as well as major producing countries in the EU, and parts of Asia, other than China