China says US should take the blame for food prices; China no longer grain self-sufficient
In China, a deputy department director of the Ministry of Finance Zeng Xiao’an denied that China was responsible for the recent run up in global grain prices. “It’s the United States that should take the blame for its massive production of fuels from corn and other grains. Our scale is very small and we have already stopped all new [corn ethanol] projects,” Zeng said.
China Daily published a useful survey of Chinese ethanol production as background material to Zeng’s comments, including a note that China is now only 95 percent self-sufficient in grains. A Biofuels Digest report earlier this year projected that China was rapidly losing food self-sufficiency.
“There is a fight inside the Chinese government,” a local observer told Biofuels Digest. “The Ministry of Agriculture is today a stronger voice than the National Comission of Development and Reform [Energy]. Insufficient arable land and 1.3 billion of people (eating more than in the past) are the main arguments to avoid the use of more land and grain for biofuels in China.”
A useful summary of the Agriculture Ministry views is available here.
Meanwhile. China’s leading biodiesel producer, Gushan, cancelled a public offering of American Depository Shares through US markets, citing “the current trading price of its ADSs” and current market volatility.
China background
Kunming Wuhua Zhisheng Economic and Development Research Institute distributed the first hydrous ethanol 93-octane gasoline. The formulation, which uses a patented emulsifier to reformulate ethanol so that it mixes with any concentration of gasoline without causing damage to vehicles. The fuel is distributed via a pilot gasoline station in Kuming, in Yunnang province. Brazil uses hydrous ethanol, while the US favors an anhydrous variant. The reformulated ethanol is being marketed at comparable prices to gasoline of $0.85-$0.90 per liter, or $3.21 to $3.40 per gallon.
China Biodiesel has just completed a capacity expansion to 100,000 tonne at its biodiesel plant in Xiamen, Fujian Province. Capacity was expanded more than threefold. The company said that it has secured new feedstock sources in Southeast Asia to assure an affordable supply for the plant.
In technology, Chinese researchers say that they have developed a process to increase the conversion rate of rice straw into biogas by 65 percent. More than 230 million tonnes of rice straw are left over from harvests each year, but to date rice straw has proved resistant in the conversion process. The researchers pretreated rice straw with sodium hydroxide to increase the results from anaerobic digesters. The scientific team said that three pilot facilities have been built using the technology.
In investment, Eastern Renewables Fuels said it plans to expand cassava planting to 4500 hectares in 2008 to meet rising demand. The company ships its output to Guanxi province in China.
Also, China Agro-Technology announced that it has secured $300 million in financing for biodiesel acquisitions and operations. The company is focused on building capacity to process jatropha oil to supply the growing demand lower-cost biodiesel. China’s largest state oil company, Sinopec, said it will invest $5 billion in jatropha and palm plantations in Indonesia.
In policy, Grain prices have been stabilized in the country, via an increase of 30 percent in farm payments and an additional $3.5 billion in seed, fuel and fertilizer aid to farmers. As a result, grain prices have increased by only 1.2 percent.
Meanwhile, experts are warning that plans to produce biofuels in the China’s southwest will threaten biodiversity in the last remaining section of virgin forest in the country. Speakers warned against the planting of jatropha trees, which would threaten native grasses and a diverse range of animal species, said academics attending the International Workshop on Biodiversity and Climate Change in Beijing.
In research, the Chinese and Italian governments have initiated a feasibility study for jatropha biodiesel at Sichuan University. The project received $650,000 in support from Italy. The project is the third signed by Italy and China, promising cooperation in biofuels research since mid-April. The others covered industrial waste oil-based biodiesel in Hubei Province, and thin-film solar cells in Shanghai.
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Al Fin | Jul 9, 2008 | Reply
China’s Deputy Zeng is quite correct. The US is behaving extremely rudely by developing its agricultural surplus for its own ends. The US must be made to understand that China owns all US grain surplus, in fact China is entitled to all US grain surplus. You see, China has a growing appetite for flesh from livestock, and livestock must be fed. US grain surplus is the best livestock feed on the market, so it naturally belongs to China on the basis of “the greatest need.”