Food - Product News

The year 2019 has just started and there is a lot of movement in the food ingredient industry. The chinese environmental regulations still influence the price- and supply situation of many products. Also there are updates on the harvest of our natural products e.g. guar gum and agar.

Food - Product News 

Sodium benzoate - prices expected to rise

Due to temporary maintenance work and plant closures, sodium benzoate granulate will only be available to a limited extent at the beginning of 2019. In light of this restriction, we are expecting prices to rise. In addition, the Chinese New Year celebration falls in the following period, meaning that sufficient product will presumably only be available on the market again in March / April.

On the other hand, falling crude oil prices speak against this trend. Toluene, a product in the process of crude oil, is the most important raw material for the production of sodium benzoate. 

We recommend that you stock up sufficiently with sodium benzoate for the first quarter in order to be prepared for bottlenecks and price increases. Prices should calm down again in April or May 2019, and the supply situation should also return to normal.

Guar gum - short-term downward price trend

There is a short-term downward price trend for guar gum due to low demand in the industry. In the USA, companies are reducing their stock levels due to a 1.5 percent stock tax.

The guar harvest was slightly worse last year than 2017 and prices are currently at a low level due to the current low demand. However, it remains to be seen how long prices will remain at the low level, as this year's guar harvest will be worse than expected. The current harvest forecast has already been revised downwards by 30% compared to the previous year's harvest. 

In addition, the carryover volumes decreased to below 50% this year. We are expecting a price increase after January 2019 due to rising demand. That is why we recommend to buy now at reasonable prices for the coming year.

Agar – stable prices

The supply of seaweed is abundant this season but cannot be used to produce agar products with high gel strength. Native algae are in the planting phase this season. The harvest normally takes place between March and June, and this is then used to produce agar products with high gel strength. The raw material prices for both types are stable.

The price of processing aids, in particular water, has fallen slightly for producers compared with the third quarter of 2018 and is now stable. Investment in waste treatment is an obligation and the costs for water treatment are continuously high. Production volumes in China are strictly monitored by the government for environmental reasons. We assume that the market price for agar products will be stable in the first quarter of 2019, but may increase slightly in the short term due to increased demand.

Maca powder – fluctuations in superfoods

The cultivation of maca has been decreasing over recent years. The low sales prices of the raw material mean that cultivation is no longer profitable for many farmers in Peru. In some growing regions in Peru, the sales price is lower than the production/cultivation costs for the raw material.

Towards the end of 2018, the maca overstocks that had built up in recent years were exhausted, leading to a price increase with a trend towards 2013 levels.
Originally, it is currently assumed that prices in 2019 will level off at a price level similar to mid-2014, before China became active in the market.

Xylitol – available again

After the supply bottlenecks from the last 1.5 years for xylitol and D xylose, the products are now more readily available again. Prices for xylitol, D xylose and xylitol DC grades have fallen again due to this increased availability, but are still high. A further reduction in prices is not expected in the near future due to the winter months. The environmental protection requirements in China will reduce production capacities during the winter.