SACCHARIN – NEW PRODUCERS REMAIN ACTIVE
The price of saccharin currently remains stable.
The objective of pushing so-called “illegal manufacturers” out of the market could not be achieved even with a low-price strategy. They still exist and won’t be disappearing any time soon. We therefore do not expect any big jumps in price, although there may always be smaller price adjustments in both directions of Course.
SUCRALOSE – HIGHER DEMAND, ADJUSTED CAPACITIES
While global consumption of sucralose continues to rise, manufacturers will still be in a position to meet the demand even in the future.
Producers have expanded their capacities hugely and if the environmental authorities don’t regulate the factories further, then we can expect stable prices on a lower level.
There are still variations in quality on the market, however, so it pays to be careful. The most affordable variety is not always the best option.
STEVIA: GOOD HARVEST, GOOD PRICES
After a slight price increase was forecast during the summer as a result of rising raw material costs, we have recorded a good harvest and as a result are seeing a stable or even falling price.
Globally there are more than 200 new products every month that contain stevia. While Europe still has to be convinced, the industry remains on the lookout for alternatives to sugar that come from “natural” sources. We therefore believe that the demand for stevia will continue to rise not only worldwide, but also in Europe.
STRICT ENVIRONMENTAL REGULATIONS & A LACK OF POWER: XYLITOL IS IN SHORT SUPPLY
Xylose forms the basis for the production of xylitol, but for months this raw material has been in extremely short supply. Many smaller xylose producers have had to close because they are unable to meet the environmental regulations in China. Furthermore, in winter the xylitol factories are short of power, so they are unable to produce sufficient quantities. The result is severe shortages worldwide.
We believe that xylitol will remain in short supply throughout the year, but with a bit of luck fresh supplies will arrive from May onwards thanks to the initial spring production.
CURRENT SITUATION OF POTASSIOM SORBATE AND SORBIC ACID
In June 2017 we were already talking about strict environmental protection regulations that could play a dramatic role in certain circumstances in the area of preservatives.
Now, one year later, we are able to say that this has unfortunately become a predominant theme and a reality in relation to the price development and availability. Almost all producers in this product area are affected, since the manufacture of potassiom sorbate and sorbic acid is extremely water-intensive. The authorities are suggesting producers modernize existing plants for waste water treatment in accordance with the latest regulations and standards and to make use of this.
Operations that were insufficiently able to meet the authorities’ conditions were ordered to reduce production at short notice or even to close completely on a provisional basis.
The high investments that can be expected and the reductions in capacities, along with a scarcity of raw materials resulting from environmental regulations have led to a considerable price increase. Since greenhouse gas emissions increase considerably in the winter due to the heating period, all manufacturers have had to limit their production further. The level is currently around 65 – 70 % of the original volume. Since the implementation of the technical regulations requires more time than in the past in China too, a statement from the local authorities suggests the situation is not likely to be eased before the summer of 2018. Experience has shown that the forthcoming Chinese New Year festival and the exhibitions soon to take place (primarily the FIC in Shanghai at the end of March) are likely to help further consolidate prices.
We believe it is very sensible to be covered in terms of quantities at least until the end of the second quarter, in order to be secured against further price jumps or even possible shortages. A drastic price drop seems rather unlikely given the prevailing framework conditions and current Chinese policy.
We would be happy to give you our assessment based on your individual requirements and expectations of volume, and we look forward to hearing from you.
THE MARKET AROUND TAURINE IS EASING UP: CAUTION IS DUE NEVERTHELESS
Production of taurine was also subject to particular monitoring by the Chinese environmental authorities in 2017. With this product too, the strict regulations have led to a severe shortage and high prices. After the situation eased up a bit towards the end of the year and certain manufacturers reported back with astonishingly reasonable prices, the market now seems to have plateaued at a medium level. The current trend points to a further increase.
High demand and scarce and expensive cargo space is nevertheless preventing a price regulation to the level of 2016. We expect to see the market ease off once again around autumn 2018 at the earliest. We therefore recommend buying well in advance to cover requirements.
Taurine is increasingly used in the pet food industry, both in Europe and in Asia.
Due to falling demand, manufacturers are now only producing on request. Longer lead times and slightly rising prices are therefore to be expected!
This alternative to sugar is scarcer during the winter months, but with the onset of spring we expect to see normalisation of availability. After prices fell last year to rock bottom, a slight increase is likely in 2018 as a result of increased freight rates and energy costs.