Newsletter

We have reported in detail about the price decreases of Xanthan gum during the last months. 

Chinese producers have been selling at a loss for quite a long time. The reasons are overcapacities and the attempt to withhold newcomers trying to enter the market. These efforts failed, because at least one new producer wants to enter into the market under any circumstances.

Fufeng as the largest producer has raised prices by USD 500.- / t recently.

This was done in the belief that others will follow. That has not happened. Only a few days later Fufeng pulled back and increased by only USD 300.- / t. So far it looks as though this increase has been accepted by the market.

Dietmar Neupert
20.07.2016

Prices have been rising for the last few weeks by up to 20%.

Compared to the previous years, less sowing of Guar is generally expected. Reliable estimates speak of about 20-25% less acreage, some projections expect even less acreage. 

There are large stocks available from the last harvest. However, due to the long period of storage ability of the seeds, a significant amount of material is bought by stockholders and speculators. It is supplied to the market, if good profit can be achieved. As a consequence, the supply situation can easily be controlled by these people.

We expect more news about less acreage, heavy or no rainfalls or poor quality in some regions in the next days. Those headlines are well known for India at a forthcoming harvest with the intention to push prices up.

We have just returned from our trip to South America, where we got an impression of the current situation on the Chia-market.

We have audited several producers, visited the fields and talked to farmers and producers about quality, yields, price trends, purity requirements and applications. 

Due to a drought in Bolivia and frost in Paraguay, large parts of the crop have been destroyed. Therefore, a lower crop yield is expected. As a consequence, this will most probably lead to higher prices in the coming months. 

However, there are sufficient quantities of raw material from the last harvest available. 

We assume that prices for high quality Chia will rise in the second half of 2016. Detailed figures will not be available before the harvest is brought in throughout all growing areas.

In Paraguay and Argentina the harvest for this year has almost been completed. In Bolivia, we expect results until late August.

Alexei Justiz
20.07.2016