Starch producers trapped between growing demand and pressure on prices

Wednesday, Mar 16, 2016

Negotiations on starch prices for second quarter deliveries are ongoing and positions of suppliers and buyers differ widely.

Starch producers are experiencing massive pressure on prices during talks on terms and conditions for second quarter deliveries. Buyers had contacted suppliers of wheat and corn starch asking for price cuts, something that was not a rare occurrence given falling raw material prices, sources told EUWID.

Starch manufacturers are typically responding to these calls for lower prices by emphasising modest supply on the market, especially of corn products. The current market environment did not justify price cuts, i.e. was clearly supportive of price stability at the first quarter's level, sources added. Yet, as industry experts noted, competition was fierce, posing a challenge to how flexible producers could be if they were trying to land or keep orders. At the end of the day, the positions adopted by both suppliers and buyers appear to be increasingly uneven, sources mentioned to EUWID.


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