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FMC raises prices for cellulose and carrageenan

By Lorraine Heller , 03-Oct-2007

FMC Biopolymer is the latest ingredients firm to announce further price increases, with the firm saying it continues to be unable to absorb the full impact of higher production costs.

The new increases will be effective November 1, 2007, or on the renewal of contracts.



Products in the firm's Avicel range, together with related brands of its food and pharmaceutical grade microcrystalline cellulose and cellulose gel will see price rises of four to eight percent. Prices for FMC's carrageenan products will increase four to six percent.



Depending on the product line and business unit, the company said increases will be applied to list prices as well as contract prices.



"The major drivers for this action are significant cost increases in raw materials, specifically pulp and seaweed, as well as energy costs that remain at near record high levels," said Jerry Whelan, Commercial Director, FMC BioPolymer.



"We continue to make ongoing investments to maintain the company's position as a global leader in quality, service and reliability for the food, personal care, and pharmaceutical industries. FMC also will continue to implement vigorous efficiency and cost reduction projects to keep future product price increases to a minimum."



FMC's announcement is consistent with its predictions. Last September the company told FoodNavigator-USA.com that it expected market pressures to continue.



"We are never going to go back to $20-$30 per barrel for oil (last year prices were $70 per barrel; currently they stand at around $80). Governments won't loosen environmental impact laws, which are good laws, and continuing demand continues to raise raw material prices. In such an environment, more increases are expected next year," said the firm's global marketing director for food ingredients Eric Beatty.



Price hikes announced in previous years had been hard to implement, although the market pressures are now becoming so widespread that there may well soon be no alternative but for manufacturers to start passing on some of the costs to the consumer.



FMC is not facing such pressures alone. Indeed, few businesses have remained unaffected by higher energy and commodity costs - other ingredients firms to announce price increases in the past month include DSM, Jungbunzlauer and Purac.

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