National Starch announces ingredients price hike

By Anthony Fletcher

- Last updated on GMT

Related tags: Price increases, Nutrition

National Starch Food Innovation has announced a price increase in
Europe on a range of products including food and texturising
starches.

Prices will increase by 8 to 10 per cent, effective from 15 November 2006.

The company said that dry growing conditions throughout Europe and subsequent limited availability have dramatically impacted the cost of cereal grains, with prices having risen 15 to 20 per cent to date and continuing to rise.

Other factors affecting starch production costs include escalating prices for energy, synthetic raw materials and freight.

A number of ingredients firms have also announced recent price hikes. DSM Nutritional Products for example said earlier this month that it plans to increase prices of its food and pharma-grade vitamins, premixes and citric acid.

This is the second price increase for DSM's vitamins this year. Vitamin and carotenoid prices went up as of April 1, with the scale of the increase that time communicated directly to customers.

BASF also recently increased prices of its food grade vitamin A and B2 by 12 and 20 per cent respectively. The German chemical group said that worldwide prices for vitamin B2 are going up by around 20 per cent, but the precise increase depends on the grade of product.

Last October saw a similar round of price increases from ingredients firms. But like a lot of other companies, National Starch also believes that by focusing more and more on value-added ingredients, it can increase profits and offset costs.

For example, in addition to the price increases, the firm is trying to position itself ahead of a growing trend towards natural, organic and wholesome foods.

Large retailers are starting to take commitments into having organic lines, and manufacturers must respond to this growing demand by reformulating products. When this happens they will all need functional ingredients in order to make that transition and this is the need that National Starch is trying to satisfy.

The company is confident that a combination of price increases and attention to such burgeoning market trends will establish a solid financial base for the future.

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