Carrageenan price rises to open up semi-refined market?
food-grade carrageenan, will raise prices for this gum by up to 8
per cent 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 sourced from the Philippines and Indonesia, and 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 per cent for selected food-grade carrageenan products. These increases apply to pricing worldwide and will take effect on December 1, 2004, or as contracts allow," said the US firm, a subsidiary of FMC corporation.
Historically, the use of carrageenan for food has grown in industrialised countries, by at least 5 to 7 per cent 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 pushing up demand for processed products and slowly exhausting home-sourced carrageenan supplies so turning to the Philippines.
And the potential is considerable with economists at the Foreign Agricultural Service (FAS) in the US highlighting that only about 25 per cent of Chinese food production is currently processed, compared to about 80 per cent in developed countries.
Which could all equate to 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 building on its 'one-stop supplier' philosophy by acquiring all the assets for processing the ingredient from liquidated firm Scottish Scotcol.
In the EU the food market has grown to use both refined - known as E407 on food labels- and semi-refined - labelled as E407a - carrageenans. In the US, there is no distinction for the food labels - the hydrocolloid is simply known as carrageenen.
