Carrageenan price rises may encourage cheaper alternatives

- Last updated on GMT

Related tags: Fmc biopolymer, Carrageenan, Fmc

Philadelphia based FMC BioPolymer the number one supplier of
food-grade carrageenan will raise prices for this gum by up to 8
percent as raw material costs cut into margins, suggesting that
cheaper alternatives, such as the semi-refined carrageenans, can
expect growing opportunities, reports Lindsey Partos.

Carrageenan is a gum extracted from seaweed, largely from The Philippines and Indonesia, used extensively in food formulations from sausages to cake glazes, to provide texture, structure and stability. Semi-refined powder contains more cellulose material than its refined, purified sister but is easier and cheaper to produce.

"FMC BioPolymer will implement an average price increase of 7 to 8 percent for selected food-grade carrageenan products. These increases apply to pricing worldwide and will take effect on 1 December 2004, or as contracts allow," said the firm, a subsidiary of FMC corporation.

Historically, the use of carrageenan for food has grown in industrialised countries, by at least 5-7 percent per year, particularly on the back of growing demand for convenience foods. But supplies are currently experiencing a much stronger pull as Chinese consumers grow in affluence - slowly exhausting home-sourced supplies are turning to the Philippines - in parallel to pushing up demand for processed products.

And the potential is considerable as economists at the Foreign Agricultural Service (FAS) in the US highlight that only about 25 percent of Chinese food production is currently processed, compared to about 80 percent in developed countries.

Which could all equal growing opportunities for the semi-refined carageenan market. According to hydrocolloid market expert Denis Seisun​, the semi-refined market, used primarily in meat and dairy segments, is growing in size as developers build new applications. In most applications, the semi-refined does not appear to make a great difference, he said recently.

While FMC, CP Kelco and German chemicals firm Degussa dominate the refined market, Shemberg is the biggest player in semi-refined carrageenan, although the leaders in refined are now on board, said Seisun.

In June this year Danish firm Danisco bought into this growing market and built on its 'one-stop supplier' philosophy, acquiring all the assets for processing the ingredient from liquidated firm Scottish Scotcol.

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