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Yeast Industry Overview Analysis Of 2017
- Sep 27, 2018 -

The yeast industry is a basic industrial food in the people's livelihood industry, which is less affected by economic fluctuations and belongs to the category that can span the cycle. The demand is relatively stable. In the past, the yeast industry was mainly driven by the replacement of old fermentation.


The main reasons are as follows: 1) supply side: the price of pressed sugar rose significantly in 2016/2017, the income of sugar mills and sugarcane planting increased significantly, and the willingness of sugarcane planting increased. According to the forecast, China's sugar production will still increase year on year in 2018.2) demand side: environmental pressure still exists, and the price of corn is still at a low level despite the rebound from the low point. The profit level of corn alcohol is significantly higher than that of molasses alcohol. It is estimated that the high probability of ethanol demand for molasses will not increase.


According to the forecast, China's sugar yield is expected to reach 10.5 million tons in 2018, an increase of about 1 million tons compared with that of 2017. We believe that molasses is a byproduct of sugar, and output fluctuates with the yield of sugar.


In 2016, the sugar price increased significantly, the sugar cane purchase price increased significantly, and the planting yield increased significantly.The yield of sugarcane planting in the 2016/2017 season is more than 600 yuan per mu, up 136% year on year compared with the last season. We expect the planting area of sugarcane in the 2017/2018 season to increase, and the yield of sugar and molasses to increase.


At present, the price of corn is about 1600 yuan/ton -1700 yuan/ton, and the price of molasses is 800 yuan/ton. Molasses alcohol has no price advantage over corn alcohol. The demand of ethanol for molasses is still weak.Domestically, we believe that corn prices are likely to remain low under the pressure of high domestic corn stocks.


In terms of yeasts, the expansion of large yeast plants in China is limited, and the newly added capacity is in foreign countries. Due to the lack of scale cost advantage, small yeast plants have been gradually withdrawn in recent years.With the low price of molasses at present, we are worried about whether the small yeast factory will recover. Although the price of molasses is low at present, under the background of increasingly strict environmental protection, the small yeast factory will face greater pressure of environmental protection cost. Moreover, the environmental protection is a relatively high initial investment, and the cost performance of small yeast factory is not high.Therefore, we believe that the demand of yeast for molasses will remain at a relatively stable level, and it is unlikely that the demand will increase much.


In conclusion, we believe that the low price of molasses in 2017 is mainly due to two reasons.2) demand side: under the pressure of environmental protection, molasses alcohol enterprises have low operation rate and low corn production rate. With the prominent advantages of corn alcohol, the demand of ethanol for molasses has decreased.

 

Sep.27, 2018