Harvest time and environmental guidelines

The year 2019 is now just a few weeks away, so we would like to provide you with some early information about the current supply situation and the adapted market conditions. Here, we report on the results of the harvests of our natural products and the influence of Chinese environmental policies on the global market.

Outlook for 2019


Locust bean gum - poor harvests and low stocks

Approximately 40,000 tons of carob beans are required each year to cover the average requirement of approximately 16,000 tons of locust bean gum. An averagely good harvest is around 40,000 tons and our producers generally hold around 10-15,000 tons of stock from the previous year. According to current information, the new harvest will yield approximately 30,000 tons and will therefore be below average. On top of this, there are almost no residual stocks from last year’s harvest. Due to the below-average harvest and the low levels of residual stock, we are currently expecting prices to rise. The current price differences of up to € 4.00 per kg on the producer side highlight the uncertainty of the current market situation. If demand does not fall strongly in 2019, then it is likely there will be problems in availability due to this year’s harvest. We recommend you order enough to cover your medium-term requirements. Nevertheless, it is worth noting that we currently have no information about the harvest in Morocco. This accounts for approximately 50% of the global market and therefore also has a significant influence on future price development.

Harvest 2018:

SpainAverage
Turkey, Cyprus, Algeria50% below average
MaroccoNo clear information                                       

Psyllium – farmers change to other products

We offer psyllium as whole seeds, ground seeds, husks, and ground husks in various degrees of purity and grindings. This series of products is available both in conventional and organic quality.  After the great success of the last harvest, prices ended up being very attractive for customers too. Over the coming year, however, we can expect to see them rising once again, since the low prices prompted many farmers to adapt their cultivation strategies in favor of more lucrative products. Just in the last few weeks, we have seen price increases of 4-8%. It is likely that these increases will take place at regular intervals, so we recommend covering your long-term requirements early on and calculating your precise needs.


Potassium sorbate – are prices falling?

In the days around CW 45, the prices for potassium sorbate fell noticeably but not drastically. Unfortunately, this fall in prices was compensated for by a very weak Euro. Since the heating period has begun in China and thus exhaust gas emissions are increasing, there are ever more efforts to regulate air pollution by curbing the energy requirements of industry. Nevertheless, the production of potassium sorbate is currently not a major focus for the environmental authorities, so there have been no further shortages thus far. According to statements from manufacturers, the prices will continue to remain stable at a similar level, since raw materials and energy continue to be scarce.


Vitamin C and derivatives – arrival of new manufacturers

The arrival of certain new manufacturers in the market has meant that prices have fallen significantly over the past five months. The exchange rate of the USD underpins our expectations that the fall in prices in the area of vitamin C has begun. If the Chinese government closes further factories during the colder months, there is a high risk that there will be further supply shortages and greater short-term price increases. We therefore advise that you cover your requirements at least through the end of Q2 2019 at the currently affordable level.


L-carnitine – high price level

Due to the extreme scarcity of the goods, huge price increases can currently be seen for Chinese L-carnitine. Of the four major manufacturers in China, two have already ceased production on the initiative of the government, and the remaining manufacturers are producing only under certain conditions. We therefore expect to see a high price level through and including the end of Q1 2019.

 


Any questions? Do not hesitate to contact me!

Benjamin Dux
Head of Sales

Phone   +49 (0)40 - 300 501 8118
E-Mail     b.dux[at]tergroup.com