Accordingly, the production and sales of the 3 producers both conformed to the government’s plan.

• Production plan: 19,000 tonnes, of which 3,200 tonnes for domestic sales and 15,800 tonnes for export business

• Actual situation: 15,658.07 tonnes, 82.41% of the planned, of which 3,197.78 tonnes (= 99.99% of the planned) for domestic sales, and 12,180.55 tonnes (= 77.09% of the planned) for export business. By 31 Dec., 2015, the stock reached 702.83 tonnes

The production in 2015 was 17% lower than 18,976.47 tonnes in 2014. This is also the first time that the actual production was less than 85% of the planned, since 1999 when the saccharin production plan was carried out. Before 2006, the production was frequently beyond the planned.

In 2015, as the national standards for environmental protection was improved, saccharin producers continuously increased the input into environmental protection treatment. However, each producer had to carry out reconstruction and production simultaneously, since they encountered great difficulty in treating waste water.

This led to the large decline in output. On 1 Jan., 2015, the new Environmental Protection Law of the People’s Republic of China was officially implemented, aimed at strengthening the supervision and punishment. Then in April 2015, the Water Pollution Prevention and Control Action Plan was officially issued, in which the treatment of industrial sewage is a focus.

                                              The planned/ actual production of saccharin in China, 2011-2015

                                                                      Source: China Sugar Association

 
The decreased output and the subsequent lessened supply in 2015, pushed up the price continuously.

Ex-works price: the figure on average was USD7,267/t (RMB47,500/t) in 2015, up by 8% YoY, according to CCM’s price monitoring

Export price: the figure averaged USD7,536/t, up by 9% YoY, according to China Customs

The increased saccharin price had small impact on the domestic sales, however large regarding export business.

- Domestic sales
The annual domestic demand stays at about 3,000-3,500 tonnes. In 2015, the domestic sales reached 3,197.78 tonnes, basically equal to 3,193.8 tonnes in 2014, despite the price up-regulation.

- Export
According to China Customs, during 2012-2014, the export volume maintained at around 16,000 tonnes, however in 2015, the figure fell to only about 12,000 tonnes. The largest falls were seen in Pakistan, Indonesia and Brazil, by 53%, 45% and 41% respectively. This is probably because such downstream enterprises cannot afford the rapidly increasing prices and cut down the imports from China.

                                                                China's exports of saccharin, 2012-2015

                                                                        Source: China Customs & CCM

                                             Top 10 export destinations of saccharin from China, 2015

                                                                         Source: China Customs & CCM

“The environmental protection treatment was a vital restriction on the production in 2015,” said the 3 designated saccharin producers, “In 2016, this restriction will continue.” However, according to analyst CCM, the increasing price will attract many small saccharin plants to make illegal production, which will upset the current fine production and sales order. Hence, it is expected that the government could:

• Enhance the supervision on and investigation into designated producers, and meanwhile rectify the production enterprises involved in illegal production of saccharin (including intermediates)

• Accelerate the reconstruction of saccharin enterprises for environmental protection, ensure the regular production of saccharin, and strengthen supervision on enterprises against regulations

This article comes from Sweeteners China News 1603, CCM

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Tag: saccharin environmental protection

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