Englewood, Co., November 26, 2002

Penford Corporation Licenses Resistant Starch Intellectual Property and Sells Hi-maize Business to National Starch and Chemical Company

Penford Corporation (Nasdaq: PENX) announced today that it has sold its Hi-maize resistant starch business and licensed the rights to its resistant starch intellectual property portfolio with exclusive rights for applications in human nutrition to National Starch and Chemical Company, a member of the ICI Group. Penford retains the rights to practice its intellectual property for all non-human nutrition applications.

Under the terms of the transaction, Penford received an initial payment resulting in net cash proceeds to Penford of approximately $4.1 million. The transaction also includes annual royalties and a supply arrangement whereby Penford will make resistant starch products for National Starch.

Penford Corporation CEO, Thomas D. Malkoski, said, "This transaction with National is a positive outcome for both companies and for customers. It will bring clearer focus to the near-term opportunities for resistant starch as a dietary fiber, as well as the long-term potential that resistant starch brings to a wide variety of human health concerns. For Penford, it allows us to better deploy our resources to commercialize a variety of targeted growth opportunities, including the use of resistant starch in the field of animal nutrition."

About Penford Corporation
Penford Corporation develops, manufactures and markets specialty natural-based ingredient systems for various applications, including papermaking, textiles and food products.

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This press release contains forward-looking statements concerning new product initiatives and the realization of benefits by the Company from strategic resources in research, market position and specialty manufacturing. There are a variety of factors (some of which are set forth below) that could adversely affect the Company's ability to deliver new product initiatives or to capitalize on the Company's strategic resources in research, market position and specialty manufacturing. Among the factors that could adversely affect the performance described in the forward-looking statements are the performance of the economy as a whole (including the economies in markets served by the Company, such as North America and Asia) and the impact of such performance on the Company's customers, customer acceptance of new products or technologies at less than anticipated rates, issues related to lack of increases in or decreases or delays in customer demand or orders, increased competition timing and other issues related to introduction of new technologies, decreases in market share, unfavorable changes in product mix and disappointments in product development efforts and introductions and those listed in the Company's SEC reports, including the report on Form 10-K for the year ended August 31, 2002.