A shortage of seaweed from Asia Pacific is having a serious affect on supply and pricing in the hydrocolloids market, and may ultimately prompt some users to reconsider formulations or seek new assurances from their suppliers.
The world of hydrocolloids has changed much in the last two years – and especially in the last 12 months, Fabrice Bohin, global business director for hydrocolloids at Cargill Texturizing Solutions told FoodNavigator.com.
“Right now there is one of the worst crises ever recorded in seaweed. It is affecting carrageenan and alginates.”
According to Leatherhead Food International, carrageenan is used mainly in dairy products (milks, creams and desserts), jellies, ham and chicken products, and bakery glazes; agar is used as a gelling agent in a range of products, including jams, confectionery goods, meats and noodles; and the broader category of alginates are used in bakery creams, glazes and fillings, ice creams, jams, and some beverages.
Indeed, some suppliers have publicly communicated price increases in recent times. For instance, FMC Biopolymer announced a seven per cent increase in its carrageenan and food/specialty grade microcrystalline cellulose products; and CP Kelco last year implemented double-digit increases across a range of ingredients, including those from seaweed.
But what is driving the shortages is a matter for debate, said Bohin.
One element is climate change on the seaweed-producing areas, such as The Philippines and Indonesia, which is affecting sea temperature. Seaweed farmers are finding they are collecting less and less and wild resources are shrinking or moving.
Some diseases and epiphytes are also increasing in incidence. While these do not have an affect on the safety of the food ingredient, they can affect growth.
Moreover some seaweed farmers in the islands are using the same strain over and over, so it does not regenerate. This can limit quality and yield.
According to Bohin, this conspiracy of factors has an impact on the crop choice of farmers. The Asian Pacific red seaweed islands also tend to do good business in coconuts – and if a farmer sees an easier market or better price for coconuts he is likely to switch out.
Indeed, Ernesto Ordoñez, chair of Agriwatch in The Philippines, wrote in The Philippine Daily Enquirer last week that in the early 2000s many seaweed farms shut down as the price of seaweed from Zamboanga fell from a fluctuating price of Peso 15 to P30/kg to P12/kilo.
For now, however, price does not seem to be a major issue – as long as the volumes are there. After stabilizing at P30/kg, during the last year, the price has increased to P100/kg for Zamboanga seaweed and P75/kg for Tawi-Tawi. Ordoñez sees this as a trigger for the government to invest in the seaweed industry, which he says has been long neglected.
But the shortage and price rises are not only a matter of less carrageenan on the market because of the raw material issues. There is greater demand for what is available from food manufacturers, partly because of changing dietary habits in China and other emerging economies, as more people can afford meat and processed foods.
The view from food manufacturers
According to Bohin, carrageenan cannot be very easily replaced on food formulations, although it may be possible to use functional systems (combinations of two or more ingredients) to reduce the quantity needed without affecting product texture.
“If the price goes too high, the customer will start de-formulating by itself, and this has an impact on growth in the market,” he said.
Some customers, however, are looking more towards strategic suppliers rather than playing around to find the best price – especially if they have a branded product and need to guarantee supply.
“They are no longer looking for the cheapest alternative,” he said. Rather, they are asking how sustainable the supply is and how reliable, whether the company has critical mass, and whether it can assure food safety.
Efforts to resolve the situation
It is hard to predict how long it may take for the seaweed situation to be resolved. Bohin said supplies may come back, but it could take anything from six months to “a few years”.
In the meantime, Cargill is closely monitoring the situation to reduce risk. It is looking at the best sources, and science on the best seaweed strains for the longer term, so as to protect the natural resource.
It is also working with farmers, Bohin said, and taking part in stewardship programmes to ensure other natural resources in the environment are protected, such as coral.
“Nature is nature, but we do what we can to manage.”