UNIPEKTIN Ingredients AG as your supplier and partner feels obliged to inform you about critical developments affecting the supply situation. Together, we can make informed decisions and find the right solution for you.
The problematic and continuously worsening LBG market situation producers and users have faced since the 2017 harvest, motivated us to start 2019 with our regular updates covering the LBG market, supply, and pricing situation. We have since posted 8 market updates between Oct 2019 and October 2020, reporting how the LBG market became more and more irrational and speculative, which, unfortunately, now has culminated in a price crisis, rather than a supply crisis.
The 2020 season harvest that commenced last September was, as expected, on an average level overall. It, however, and expectedly, did not prevent the Carob pods and seed prices, the raw material for LBG, from further increasing significantly, hitting one record high after another.
The major price drivers for LBG are the pod and seed prices and notably, the continuing very strong and further growing demand based on LBG’s specific characteristics and its excellent image as a natural product, which is justified considering the cultivation method and production process.
Pods and seeds are still accessible to LBG manufacturers in sufficient quantities, but now only in smaller lots than usual. Larger contracts, like, e.g. for several 100 metric tons, which were normal, are impossible to secure at present. Existing contracts mostly are fulfilled by the raw material suppliers. Still, there could be significant delays, and there are also reports that LBG producers are sometimes forced to renegotiate in the midst of a valid contract. This may lead to LBG production and delivery delays, the logistical challenges and delays by Covid-19 unconsidered.
Prices for LBG, due to the increasing Carob seed prices, have increased weekly, sometimes even daily, in the past two months. Quotations are now often only valid for 24 hours.
The new season of Carob pod harvest, which usually is available from October each year, is looking very promising so far, so there is hope the market will begin to move in the right direction again. But until then, LBG producers and users will be forced to live with this crisis.
Demand for LBG remains unabated. Alternatives for LBG, e.g. Tara gum or LBG/Tara gum systems, which we have promoted and recommended strongly in the past two years and in light of the deteriorating market situation, have become unviable cause Tara gum is scarcely available right now.
However, there are still other options available to the food industry, and also specifically developed, optimized and standardized for dairy applications and particularly for cream cheese, like e.g. the VIDOGUM LS series: VIDOGUM L + neutral flavour guar gum
If you are interested in discussing the current Market Update and our recommendations, please contact us by email at info-unipektin@nexira.com or call us.