Breaking News on Food & Beverage Development - Europe

Tight supply and high prices in guar gum look set to continue

By Jane Byrne , 23-Jan-2012

Related topics: Emulsifiers, stabilisers, hydrocolloids , Market Trends, Food prices

Tight supply and high prices in guar gum are set to continue until at least the end of 2012, and probably beyond, claims a leading hydrocolloid industry analyst.

A recent IMR International report published by consultant, Dennis Seisun, notes the situation on guar gum remains critical for food buyers, with oilfield service companies getting priority from suppliers.

“Food buyers have been quoted prices around US$10/kg and even then volumes are not available to fulfil all requirements,” reports Seisun, who files a quarterly update on developments in the hydrocolloid sector.

He added that there is no indication of any replacement for guar in the hydraulic fracking sector.

And Seisun predicts that “unless there is a shift in technology from the oilfield industry there is no end in sight for the current guar shortage.”

In fact, stressed the hydrocolloid expert, in the case of many hydrocolloids such as guar or gelatin, the days of buyers being in the driver's seat are over. “Suppliers are recouping investment costs and recovering from extended periods of minimal price increases,” he said.

And Seisun notes that second to guar gum, in terms of commericial turbulence, are gelatin prices.

Since late 2010 the food industry has faced a constant problem with supply, as guar gum is now being heavily used in the oil and gas industry, for the process of fracking, causing an increase in demand and prices to rise.

As guar gum is used in a variety of products, from Asian speciality drinks, to dried processed food, canned foods, bakery, noodles and dairy products, manufacturers are going to have to look towards innovation in order to reduce the overall cost of the product, claimed Euromonitor in a September 2011 review of guar gum supply challenges.

“One solution, of course, is to replace guar gum with another ingredient, such as starch derivatives, locust bean gum or xanthan gum.

As prices for guar gum continue to rise, manufacturers will have to think carefully about how long they can endure the rising costs or whether reformulation needs to take place,” wrote Euromonitor.

The authors noted that the price of xanthan gum is now not far off the current price of guar gum and so is becoming a more likely replacement in products.

“Nevertheless, it is not a simple issue of price, as each ingredient has different stabilising properties and gives a different texture to the end product. The question, therefore, has to be asked that if the end product were to change, if is this a risk brand manufacturers would be willing to take,” asked the analysts.