Rousselot has said it intends to increase gelatine prices in the coming quarter due to ongoing shortages of beef bones and pig skin, and extra pressure on the market from new EU pig welfare regulations.
Rousselot said it would raise bovine gelatine prices by 4-5% in the coming quarter, due to a shortage of bones, and porcine gelatine prices, made from pig skin, will go up an average of 2%. The company also increased gelatine prices in the previous quarter by 2-5% across its portfolio, because of ongoing supply and demand imbalance.
This week, it cited “continued and increasing tightness in our raw material markets in combination with heightened demand in gelatine markets” and warned of further price rises ahead.
“These availability issues are likely to become even more severe going into the next year. Therefore prices are foreseen to go up significantly again for 2013,” the company said.
Rousselot said its other gelatine ingredients are also likely to follow the upward trend, with exact price levels varying according to “freight, availability and other local market situations”.
Gelatine prices have been under pressure as cattle and pig farmers have been impacted by increasing feed prices, and gelatine manufacturers have seen increasing competition from the bone meal market. New EU-wide animal welfare regulations for pregnant sows are also expected to precipitate an exodus among EU pig farmers, which could also affect prices.
According to English pig farming group BPEX, 5-10% of pig farmers could leave the industry after the new regulations take effect on January 1, 2013. Price increases for pig products will depend on how many leave the industry, it said in a recent report.