Native starch producers pushing for more price hikes

Wednesday, Sep 28, 2016

Suppliers want the rising price trend on the market in Europe to continue. For deliveries of native wheat starch in the fourth quarter, producers are asking for hikes of €15-30/t, partly even as much as €40/t. Their demands are lower in the case of corn starch. If producers succeed in hiking prices, then the price frame will distend in the fourth quarter.

Some EUWID sources are sceptic about the success of manufacturers' price plans for the fourth quarter. To begin with, a number of market players still have valid supply contracts which are running until the end of the year. Furthermore, not all paper mills apparently have to pay the hikes which suppliers claim to have realised in the third quarter. According to EUWID respondents, potato starch has developed into a niche product while industry representatives report of higher and rising demand for corn and especially wheat starch. Against the backdrop of numerous expansion projects launched by packaging paper producers, which would mostly use wheat starch but could also use corn starch, starch suppliers are thinking about the total volume of native starch that would be needed once those packaging paper projects have come online.

Several market experts believe that there is no risk of cereal starch shortage due to paucity of raw material or capacity. Demand for wheat and corn (starch) will remain strong but some gaps will emerge, e.g. for the fodder and energy sectors whose demand is decreasing, experts explain. Furthermore, observers do not expect that future starch manufacturers will turn away from technical applications in order to cater to the food industry, for example. While the industry is poised to witness some transformations that are not solely dictated by the sugar market, but rather go back to structural reasons, investments will still be made in new capacities, observers are convinced. From this perspective, the paper industry, especially with its new, big paper machines, would be an interesting buyer, they add.


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