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23/03/2020
by Unipektin Ingredients AG

Locust Bean Gum – Market Update March 2020

Unipektin Ingredients AG as your supplier and partner feels obliged to keep their customers informed about critical developments affecting the supply situation so that together we can make informed decisions and find the right solution for you.

Since our last market update from January 2020, the raw material prices have increased again and are now at a historically high level. This is paired with an increasing and very high demand for LBG if not most hydrocolloids which could well be co-caused by the Covid-19 pandemic as IMR in their latest Hydrocolloid Tidbits suspect….

…”we find ourselves wondering how the global catastrophe of Covid-19 will impact the world of hydrocolloids. Will people consume more prepared foods or spend more of the home quarantine time in the kitchen preparing home-cooked food? Will they consume more indulgent foods like ice cream, sweets, and snacks all of which are key hydrocolloid applications? Will there be a stronger trend away from animal products or the reverse? Will organic, GMO-free, clean-label become less relevant in this life or death Covid world? One of the least affected food sectors may well be pet food. Pets do not eat much in restaurants or drink in bars. Undoubtedly there has been a spike in demand for all forms of non-perishable foods, pasta, canned and frozen goods. Many if not all supermarket shelves are sparse or bare of these types of food. Hydrocolloid suppliers are seeing a spike in demand if for no other reason than inventory building. It is not the production and availability of hydrocolloids that is the bottleneck. It is transportation, financial liquidity and cross-border restrictions that are causing the most trouble. Some countries, Hungary for one, have closed borders to human traffic but the net result has been a halt also to commercial traffic. Heightening US/China trade and diplomatic tensions will not help.”

Our prediction for the short-term LBG market situation is that there is no easement in price to be expected for the next 6 months. Demand for LBG / VIDOGUM L has soared which forces us to carefully plan and sometimes even restrict the quantity of our sales. This, however, is only caused by production capacity limits and not by a shortage of raw material. Availability of VIDOGUM L is secured, our factory runs at full capacity and will do so for the foreseeable future.

Now would probably a good time to consider switching to alternative recipes based on VIDOGUM L combined with other gums. UPI has successfully developed and introduced such systems during the past price peaks and optimized them further in light of the expected market development. These products can give the LBG users a valid technical and commercial option, reducing their dependence on LBG.

  • VIDOGUM LS series: LBG + neutral flavour guar gum, specifically developed and standardized for dairy applications.
  • VIDOGUM LB series: LBG + tara gum, for various applications.
  • VIDOGUM SP: tara gum with similar viscosity to VIDOGUM L.

If you are interested to discuss the current Market Update and our recommendations, please contact us by email at info-unipektin@nexira.com or call us.