High Fructose Corn Syrup

High Fructose Corn Syrup Global Market Outlook:

• The global HFCS production is expected remain stable in 2022/23 with a marginal increase of 0.7 percent, due to recovering demand from the foodservice sector. While supply is likely to contract in the US, the overall global output is estimated to remain stable, due to higher output in the developing countries to meet the recovering demand from the foodservice sector

• Higher prices of feedstock corn and substitute sweetener sugar, owing to supply concerns, shipping container shortages and rallying crude oil prices is expected to support HFCS prices

High Fructose Corn Syrup Trade Dynamics: Global

• The US’ trade with Canada and Mexico is driven by the newly incorporated USMCA Trade Agreement. The Chinese HFCS industry is expanding at a significant pace and posing a threat to the US market.

Global HFCS Export Share by Country

• The US is the leader in exports of HFCS, occupying over 60 percent of the export share

• China is emerging as a net exporter of HFCS and bringing US’ export share down

• The Chinese HFCS industry is growing at a fast pace, due to a shift toward HFCS in the beverage industry

Global HFCS Import Share by Country

• Mexican imports are mainly from the US and very less volume from Canada

• Sugar prices and domestic supply of HFCS in Mexico drive the imports of HFCS

• Growth in the soda bottlers is another major driver for the increase in imports of HFCS in Mexico

Porter's Analysis on High Fructose Corn Syrup

Supplier Power

• Corn prices are highly transparent with minimum scope for negotiations

• Corn-processing industries hold moderate negotiating power, due to a considerable share within the corn consumption segments

• Most of the large corn processors are vertically integrated and trade corn to ensure supply at lower rates

Barriers to New Entrants

• The top four suppliers occupy a major market share

• Revenue generation depends on returns from other by-products of corn wet milling

• Access to the technology is medium, and access to raw material is not restricted

Intensity of Rivalry

• The top four suppliers hold about 86 percent of the HFCS market supply in the US

• HFCS is currently facing a severe threat, due to increasing health awareness among consumers and hampering expansion activities in the developed countries

Threat of Substitutes

• The HFCS industry faces severe threat from the sugar industry in all consuming countries

• Sugar-free sweeteners are gaining importance in most of the developed countries

• Switching cost at the consumer’s end is high and involves complications and takes long time

Buyer Power

• HFCS demand is highly driven by the carbon soft drink and food industries

• Significantly, larger number of fragmented buyers against a consolidated supply market reduces the buyer’s negotiating power