Topics in this issue:

  New certifications
  Market report Xanthan gum
  Market report LBG
  Market report Guar gum

New certifications

The requirements in trading products for the food industry are steadily increasing. In order to meet the expectations of our customers in terms of food safety, transparency and quality management, we have expanded our certifications.

As of now, we are certified according to IFS Broker, Organic and FAMI QS and have converted ISO from ISO 9001 to ISO 22000.

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Market report Xanthan gum

Xanthan gum prices have increased over the last few months continuously.

After years of declining prices the price war amongst Chinese producers seems to have ended. They have recognized that all producers are losing money by cutting prices just to keep new producers out or to increase market shares.

Meihua has become well established in the market and will replace Fufeng as the leader in production volumes. After several price increases, initiated by Fufeng, the next increase has already been announced.

We have seen over the last months that price increases of one producer will be followed by the others immediately.

It must also be noted that the environmental requirements by the Chinese government are taking effect. Companies are forced to meet tougher environmental standards. The Chinese officials do otherwise not hesitate to close plants over night.
The costs for plant changes are significant and reflecting production costs.

We have recommended for a long time to cover long-term needs for price reasons. We still believe that prices will increase further. Despite a more favorable conversion rate USD / EUR, prices will go up.

Dietmar Neupert

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Market report LBG

The new harvest has just begun.

The information we get from the cultivation areas in the Mediterranean are not very promising. While the harvest yields in Turkey seem to reach normal volume, the expected quantities in most of the Mediterranean regions are significantly below normal levels.

Current estimates:

  • Spain - 50%
  • Italy - 35-40%
  • Morocco - 20%
  • Portugal - 30%
  • Turkey as in the previous year

In view of these forecasts prices have risen sharply in recent weeks.
Without knowledge of the expected harvest quantities, the kibblers were not willing to make offers to the producers of Locust bean gum until a few days ago. In turn, this led to the fact that producers were unable to offer prices and quantities of LBG.

As a result, prices reached a high level which we have not seen for long time.

Due to this situation, we do not expect prices to fall. Only after the harvest has been completed and total crop size will be known the kibblers will fix prices for seed and LBG producers will be able to offer quantities and prices.

The purchasing power of Dupont as the largest buyer of seeds will also have an important impact on prices.

We recommend medium to long-term coverage, providing that the necessary quantities are available and can be offered at all.

Sabine Justiz

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Market report Guar gum

In our last report we highlighted the sharp rise in prices due to lack of rains in the major growing areas.

During the last few weeks prices had increased further as the second rainfall which is required for a good harvest, had not arrived until last week.

Then, heavy rainfalls were reported in some parts of India. Unfortunately not sufficient in some parts of guar planting areas.

These urgently needed rainfalls had an immediate impact on the market and prices started to fall.The new harvest is expected in October / November. We assume that the crop quantities will be sufficient to cover the world market demand together with the inventory left over from previous years.

At this stage we recommend short-term coverage but to wait for contracts mid or even long term. This is under the assumption that no dramatic climate changes will occur.

Alexei Justiz

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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
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