Impacts of China’s bioethanol policy on the global maize market: a partial equilibrium analysis to 2030

Abstract

Maize is a major component of China’s cereal production. It is also one of the main feedstocks for China's bioethanol production. To ensure food security, there is flexibility in China’s ethanol policy. In this paper, we build a multicountry and multisector partial equilibrium model to simulate the possible impacts of biofuel policy on maize markets and food security. Considering normal macroeconomic conditions, China’s bioethanol promotion policy would result in a net increase in maize imports to 26 mmt in 2030. Meanwhile, China’s maize self-sufficiency ratio would decrease to 92% in 2030 as a result of the country’s bioethanol promotion policy. In addition, simulation results indicate that China’s bioethanol promotion policy could increase the world maize price index by 5% and the world bioethanol price index by 4% in 2030. Based on this modeling study, the Chinese government may take measures in advance to prepare for large-scale maize imports, adjust its strategy in order to make better use of the international market, and strengthen international trade and stock cooperation with maize import regions and countries.