Food firms face more cellulose price increases

15-Jul-2010 - Last updated on 19-Jul-2010 at 12:31 GMT

Dow Wolff Cellulosics has this month increased prices across its food ingredients portfolio, adding its name to the growing list of ingredient firms passing on increased costs for emulsifier products.

The firm, which is a global division of the Dow Chemical Company, increased prices for its ingredients by 3-7 percent as of July 1, citing tightening cost and supply pressures.

“This price increase is driven by rising costs of raw materials, including pulp, and tightening supply conditions, and is necessary to secure a sustainable supply base and source of differentiation,” said Dow in a statement.

The firm’s ingredients are used in food applications as emulsifiers or stabilizers, to help improve the texture, structure, consistency and stability of the product. The ingredients are also used as binders, thickeners, fat replacers, egg replacers, and as an aid in the formation of meat products.

More price increases

Tightening supply issues are putting pressure on manufacturers of cellulosics, which are largely derived from pulp. Higher costs of raw materials have resulted in several major manufacturers of the ingredients passing on some of the costs to their customers.

Earlier this week, CP Kelco said it was raising prices for its entire ingredient portfolio by up to 10 percent, also citing squeezed supplies as the cause.

As of August 1, the firm will raise prices across all product lines, which include carboxymethyl cellulose (CMC), pectin, xanthan gum and carrageenan, as well as select specialty biopolymers.

FMC BioPolymer also introduced a prise increase for all its microcrystalline cellulose products by up to ten percent, which the firm said was due to a higher demand for rayon fabric in China, which has squeezed the availability of pulp for specialty ingredients.

Another company that has been hit by rising prices is Ashland Aqualon Functional Ingredients, which supplies the food, pharmaceutical and personal care industries with cellulose esters and guar-derived products. The firm hiked its prices on June 1.

Director, regulated industries at Ashland Hassan Rmaile said: “The demand pressure that is placed on this industry is not easily reduced because there is a high cost of entry to start a new facility and the process to make the product of extremely high purity is not simple.”