Rousselot has said it plans to increase gelatine prices 7% up to low double digit levels for 2013 as continued growth in demand has not been met by raw material supply.
The announcement follows a previous increase of 4-5% for bovine gelatine in the current quarter, due to a shortage of bones. Porcine gelatine prices, made from pig skin, also increased 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.
“Demand for safe, secure bone gelatine that can cross borders from a regulatory standpoint is very strong,” the company said. “Markets increasingly take an interest in this gelatine quality. On top of that bone gelatine is impacted most strongly by its raw material markets. Global prices of soy meal and meat & bone meal have soared upwards to unprecedented levels.”
Rousselot said that prices for bone gelatine would increase by at least 10% in the coming quarter, hide gelatine by 3-5% and pig skin gelatine prices would increase at least 7%. The exact price increase would depend on the validity period of the last agreed price, the company said.
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.