High prices take the shine off guar gum

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High prices take the shine off guar gum

By Lynda Searby, 28-Sep-2011 Related topics: Ingredients and additives, Formulation
There is no end in sight to the current guar gum shortage and record high prices for the hydrocolloid, which may prompt some manufacturers to consider reformulation, according to Euromonitor International. In a new two-part report on guar gum, Euromonitor analyst Diana Cowland warned that as prices continue to rise, food manufacturers will need to think carefully about whether they should replace guar gum with another ingredient, such as starch derivatives, locust bean gum or xanthan gum. Guar gum is widely used as a thickener in ice cream as well as a texture improver and shelf-life extender in bread, and much of its appeal has historically been its low price. However, since mid-2010, prices of guar have been continually rising, climbing from US$1.67/lb in the first five months of 2010 to US$2.16/lb for the same period in 2011, and are now touching US$2.7/lb, according to the report. Oil and gas pressures These prices hikes are confirmed by Danisco, one of the largest European suppliers of guar gum to the food industry. Today the price of guar is three times higher than it was two years ago, Adrian Zingg, product manager guar with Danisco, told BakeryAndSnacks.com. The root of the price problem lies in the oil and gas industry, which has started using a horizontal drilling process that demands large quantities of guar gum. The oil and gas industry use guar gum for lubrication in the process of fracking, a procedure which is relatively new and being used increasingly, explained Euromonitors Cowland. The knock-on effect for the food industry has not only been higher prices, but also tighter supplies. The problem today is not so much price as availability; demand from the shell gas industry has increased so much that there is not enough capacity in India where the majority of guar gum is produced, said Zingg. Improvements This supply situation could improve, as India adds to its production capacity and more acreage is given over to guar. Prices, however, look set to remain firm, as demand from the oil and gas industry shows no sign of abating, and could even increase if countries other than the US decide to deploy fracking. In any case, points out Zingg, a drop in prices would not necessarily benefit the food industry, as it could prompt farmers to switch to other more lucrative crops such as cotton, thus exacerbating the current supply situation. The best scenario we can hope for is flat pricing, said Zingg, though he thinks a more likely scenario will be further price increases, though not to the same extent as in the last 12 months. Even at these higher prices, guar gum is still cheaper than alternatives like xanthan gum. Xanthan is probably double the price of guar gum, said Zingg. The only cost effective alternative to guar gum in bakery applications is CMC, but its chemical-sounding name (Carboxyl-Methyl-Cellulose) puts many manufacturers off. Euromonitors report concludes that reformulation is unlikely to take place among most food manufacturers in the next 12 months, but that it might in the long-term. If prices continue to rise steeply over the next two years, the situation may change as manufacturers think again about absorbing the continual increase in cost, wrote Cowland.

http://www.bakeryandsnacks.com/content/view/print/564615

17/04/2012

High prices take the shine off guar gum

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http://www.bakeryandsnacks.com/content/view/print/564615

17/04/2012