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SunSirs: In 2020, China's DDGS Rides the Wind and Waves, and the Prices Keep Rising
December 28 2020 09:02:28SunSirs(Linda)

According to data monitoring by SunSirs, the domestic DDGS market will be fully red in 2020, completely getting rid of the downturn in 2019. Supported by the sharp rise in raw material corn, domestic DDGS has made a strong counterattack. The price has risen from 1,750 yuan/ton to 2,200 yuan/ton, and the price has risen by more than 500 yuan per ton. At the beginning of the year, the average market price of domestic DDGS was 1750 yuan/ton, and on December 25, the average market price of domestic DDGS was 2273 yuan/ton, the price increased by 29.9%.

According to the price rise and fall of the SunSirsDDGS industry chain in 2020, it can be seen that the price of terminal pigs only rose 1.1% throughout the year, which has limited support for DDGS. The price of domestic DDGS has risen by nearly 30%, mainly because the upstream corn products have skyrocketed, with prices exceeding 35%. With the boost in the price of raw corn, domestic DDGS has continued to oscillate and rise.

In 2020, the domestic DDGS market rose more and fell but was basically rising. The market fell in only three months, with the largest decline of 7.08%. Domestic DDGS increased by more than 11% in March and July, and increased by 5%-6% in April, September and October. In December, DDGS first fell and then rose. As of the 25th, it had fallen 0.44%.

The main reason for the increase in DDGS in the first half of the year was that some alcohol factories switched to medical alcohol, the supply of DDGS was tight, the price of corn continued to rise, cost and supply continued to rise, and the price of DDGS continued to rise. The new season corn went on the market in the second half of the year and continued to rise sharply. DDGS once again ushered in a rising market.

Raw corn prices support DDGS continues to rise in 2020

The DDGS market in 2020 can be said to be rising rapidly. Although there are occasional pullbacks, it is still difficult to stop its sharp rise. The market experienced three roller coaster rides throughout the year. The three roller coaster rushes staged high gains and a small correction. Therefore, DDGS showed a continuous oscillating rise.

The first roller coaster market: From the middle of January to June, DDGS surged 21%, ushered in a callback, fell by more than 6 points, and rose 14.29% overall. After the Spring Festival, some alcohol plants switched to medical alcohol. DDGS production capacity declined and supply was tight. The raw material corn and substitute soybean meal prices rose sharply. Supported by multiple bullish factors, DDGS ushered in a surge of more than 21%, due to the shift in terminal feed demand The operation rate of the alcohol plant has rebounded, and the DDGS has ushered in a callback after the surge.

The second roller coaster market: From the end of June to August, DDGS rose 15%, ushered in a callback, fell by more than 11 points, and the overall price rose by 3.38%. The raw material corn is subject to high prices in the auction of corn from the State Reserve, and the price has risen sharply. In the traditional season of parking and maintenance of alcohol plants, domestic DDGS market supply is tight and inventory is low. Supported by bullish factors, alcohol plants in various regions have raised their DDGS ex-factory prices. Domestic DDGS rose another 15%. After DDGS rose sharply, it ushered in a callback again. The main reason was that high-priced corn was accepted by the market and its boost was limited. In addition, the terminal demand was flat.

The third roller coaster market: From September to December, DDGS rose by 12%, ushered in a callback, fell by more than 6 points, and the overall price rose by 6.23%. The Mid-Autumn Festival and National Day terminal stock market increased, and domestic DDGS ushered in a big increase for the third time, with prices rising by more than 12%. After the National Day, domestic DDGS was once again beaten back to its original form, aquaculture entered the off-season, demand declined, and DDGS fell again.

SunSirs agricultural product analysts believe that the domestic DDGS market surge in 2020 is mainly due to the support of corn prices and the reduction of its own production capacity. By 2021, high-priced corn has become the norm, and its supporting role for DDGS is limited, and the demand for terminal feeds has declined. The market outlook for DDGS may continue to be weak and it is difficult to continue the booming market.

If you have any questions, please feel free to contact SunSirs with support@sunsirs.com.

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