In 2024, the actual total output of potato starch in my country exceeded the million-ton mark for the first time. Statistically, this data is very sonorous, which makes the industry quite excited. However, the weakness of the consumer side has caused more than 100,000 tons of starch than just needed to impact and pull down the overall sales price of potato starch, and this influence has continued from last autumn to today.

Recently, many people have asked whether potato starch can rise? With this "market question", I will make an analysis of the current difficulties faced by the potato starch industry, the next breakthrough of the industry and the future development trend.

Dilemma

at present, the biggest dilemma of potato starch is undoubtedly the "low price". The low price of potato starch makes everyone feel that it is not good to make money, including potato farmers, including production enterprises, sellers, and even downstream consumers (mainly referring to potato starch users).

The continuous low price of potato starch is mainly due to the following factors:

first, the output increased sharply last year, resulting in oversupply, so that the downstream consumer market has been in a saturated or semi-saturated state. Due to the low economic situation, the total market consumption of potato starch as a high-end raw material for the food industry and pharmaceutical industry has been hovering at 800 thousands or 900 thousands tons per year in recent years. The boom in blind plant construction in various regions has led to serious overcapacity.

Second, last year, many industries outside the hot money and speculators hoarded a lot of goods, this year and continue to regardless of the cost of low-cost dumping, forcing starch prices difficult to recover.

The third is the ultra-low price sales strategy of the new factory. Since 10 or 20 new factories are put into production every year, most of the newly built factories in that year have the situation of tight working capital, unstable product quality, lack of brand appeal and low market recognition. Their strategies are all low-price competition. They do not calculate the investment cost, planting cost, tax cost, but only plan to complete and put into production, and enter the market to occupy a place. Or directly from the dealer to take money in advance pre-sale, this risk is higher, no matter how the price of raw materials rise or fall, they give the dealer the price is set in advance. Of course, this price is definitely ultra-low, mostly below the cost price. The blind competition of these factories has also been pulling down the selling price of starch.

Fourth, the cost of raw materials in North China, Northwest China, Northeast China and Southwest China varies greatly. The cost of raw materials is relatively low in areas with potato processing bases and areas with few processing plants. If the cost of raw materials per ton of starch in the above areas is 5000 yuan, the cost of raw materials in areas with concentrated factories and fierce competition will be more than 5500 yuan or even higher. This leads to a difference in the selling price of starch of the same quality.

Due to the above-mentioned vicious internal factors, many normal and standardized enterprises have to operate dismal. The survival strategy is to lower the purchase price of raw potato every year, resulting in serious injury to farmers. Of course, enterprises cannot take potato farmers as a cushion at any time, and cannot fish out of the pond. In recent years, the potato planting area in more than a dozen provinces in the northwest, northeast and north China production areas has been shrinking, so that local enterprises have to go to other provinces and regions to grab raw materials in this year's production season, which has aggravated the vicious circle.

Breakthrough

in 2023, the price of potato starch soared to more than 9000 yuan per ton. At that time, the cost of raw materials alone in some areas was as high as 8500 to 9000 yuan (the cost of raw materials per ton of starch). At such a high price, the production enterprises did not make much money, and some factories lost money due to too much production.

Therefore, starch super high price or super low price is a great harm to the industry. Let every participant in the industrial chain earn reasonable money is the scientific price.

So, what price is scientific and reasonable? The answer is long-term consideration, root protection, rational management.

Potato starch industry veteran Zhang Peng believes that first, we must first ensure the income of potato farmers. The purchase price of raw materials is 600 yuan -970 yuan according to the starch content from low to high (starch content from 10 to 15 or more) /ton, under the high quality and good price of starch raw materials supply, guide and encourage potato farmers to expand the cultivation of high starch varieties, so that potato farmers can see the "potato light" of making money; Second, starch sales should be accounted for by raw material cost + direct processing cost + enterprise operating cost (three major expenses). In addition, large brand and old brand enterprises plus certain brand value will ensure that the final starch price is between 6500 yuan and 7500 yuan/ton. Farmers and enterprises have small profits.

Of course, in addition, the cultivation and construction of high starch processing potato raw material base is also the core breakthrough means. The price of raw materials and starch quality are under control. In this regard, some factories in Xinjiang and Inner Mongolia have done very successfully.

Trend

to make a preliminary prediction, this year's production season, due to the sharp decrease in the planting area in the northwest and northeast producing areas, the North China producing areas suffered from waterlogging, which is rare in history, and the production of potatoes with large water is reduced by half. National starch production will be significantly lower than last year. Potato starch will rise steadily from mid-November. Before the Spring Festival, the ex-factory price of first-class starch of popular brands is expected to reach 6500 yuan per ton, while the superior products of leading enterprises and high-end brand enterprises are expected to exceed 7500.

This prediction is based on two points: one is the noble quality of potato starch. Among all starches, potato starch has the advantages of large particle diameter, high viscosity, low gelatinization temperature, high transparency, high expansion, strong water absorption and water retention, and high content of trace elements. Therefore, the industry praises potato starch as the starch. "Noble"; Second, based on the current raw materials and production conditions in various producing areas, people in the industry infer that the total output of potato starch in the country this year will be reduced by more than 30% compared with last year.

The above factors will help potato starch prices return to the "scientific price", so that the industry continues to pick up. At the same time, the competition of potato starch industry will be more and more fierce. Zhang Peng believes that the future of the potato starch processing industry will show the following trends: First, product diversification to support corporate profitability. For example, protein and potato residue are productized to form a multi-product output under a single raw material, and dried and squeezed potatoes.

Second, the industrial chain to support the development of enterprises. To ensure a standardized raw material base with 50% production capacity to support the production of enterprise products, stabilize market channels with stable product supply capacity, realize the chain industrial chain of "species + production + marketing", and promote the development of enterprises. In particular, enterprises operating raw material bases should also be reminded to account for planting costs.

Third, investment diversification supports the growth of enterprises. The standard configuration of industrial chain is the diversification of investment under the profit sharing system, that is, sharing the income from planting raw materials with base investors, building production lines with demanders of various products (starch, protein, potato residue, etc.) to raise working capital to share the income of products, and sharing the benefits of the industrial chain system with investment partners.

Thousands of sails pass by the side of the sunken boat, and thousands of trees are in front of the sick tree. Although the potato starch industry is facing various tests, I believe that the future of this industry must be like a "potato" shining!

Introduction to the author:

potato reporter, potato industry observer, reporter. He has published works such as "People of the Potato World", "Potato Light-Impression Grede", "Potato World Wind and Cloud-Potato Starch Industry 30 Years of Agitated Development" and so on.