Newsletter
January
Topics in this issue:
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Xanthan is available in sufficient quantities in the market. Capacities have been expanded significantly in recent months, especially in China; where the number of producers has increased to seven from previously four. The world's total capacity is about 220,000 tons , 170,000 tons of which attribute only to China. The world market demand is about 160,000 t . The two leaders in China are trying to push newcomers out of the market with an aggressive pricing policy. This seems to work. We heard that some capacities will be taken out of the market later this year. However, rising energy costs, wages and investments in environmental protection through increased government requirements cause struggles to the producers. We expect stable prices for the foreseeable future, which can certainly increase again as soon as the market adjustment is completed. Unfortunately, the current low prices are compensated by the weak Euro. We recommend short- to medium-term coverage, particularly because oft the current exchange rate. Dietmar Neupert 30.01.2015 |
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According to all information available by the end of last year, moderate price increases were expected for guar gum. The scenario has changed completely. Guar gum is an important product in the production of oil and gas from shale rock, the so-called fracking process. Due to the dramatic decline of oil prices, a large number of drilling companies is operating at a loss. Market price for oil does no longer cover the costs. Consequently, some wellfields were shut down, others run with lower capacities and exploration of new oil fields have come to a halt. The fracking companies have started to lay off people and are cutting costs wherever possible. Besides the US Russia is affected by the cost problem as well. It is reported that quantities delivered to Russia fell by over 30%. Of course, this market situation has an impact on prices. Companies are reducing stock level and the pressure on selling prices in India rise at the same time. As reported several times, the enormous capacities built up in India over the last 2-3 years are underutilized. Many guar gum producers are desperately looking for orders. Especially the newcomers who have no guar background and who have invested in the hope of a highly profitable business are the big losers and sit on partly abandoned or underutilized capacities. As for the foreseeable future no big price correction is to be expected in the oil industry and, therefore, the demand for guar will remain reduced. The extent to which the prices of guar will continue to decline, is difficult to predict. It mainly depends on the general demand and the purchasing behavior of the oil industry. However, there are warning voices from India who predict lack of interest of guar farmers, if prices stay at this low level. This will have an impact on new cultivation of guar plantation. We share these fears but it is still a long way to the next harvest. Until then, we recommend to cover short and medium term demands and to careful observe market development. Due to the actual weakness of the Euro, unfortunately part of the ease in prices gets lost. We will keep you updated. Dietmar Neupert 30.01.2015 |
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Development of prices guar gum in 2013
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Development of prices guar gum in 2014
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Following the turmoil in the psyllium market last year, prices remained at a very high level until a few weeks ago. The rapid price increase was followed by a significant decline in demand. Some psyllium factories are utilizing only half of their capacity at the moment. The major customers in the pharmaceutical industry, who significantly affect the market with their needs of over 5,000 t per year, currently hold back with purchases. We have got the information that the upcoming harvest in mid-March will be very good. Market players in India are expecting a much higher crop which most likely will drive prices down. At present, we recommend to only cover short-term needs. First reports on this year´s crop will be available by end of February and will be crucial for price findings. We will keep you updated. Alexei Justiz 30.01.2015 |
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| Neupert Ingredients GmbH In der Boerse 9 | D-21441 Garstedt | Germany Tel.: +49 4173- 51591 - 0 | Fax: +49 4173 51591 - 99 E-Mail: info@neupert-ingredients.de |
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