Solae to raise the price of soy lecithin
soy lecithin products from April 1 - just days after warning
of the need for ingredients firms to pass on higher input costs.
The company said that the higher cost of energy and commodities had eaten into the margins of its lecithin business, and that this "requires increases in the selling prices of many of our lecithin products". "We have delayed these increases for as long as possible, but increases in input costs throughout the supply chain require that we implement these increases effective April 1," said Jack Self, global business director of Solae's lecithin unit. Solae is a major producer of lecithin products, especially upgraded fluids and de-oiled lecithin products. The company's products are used in products as diverse as instant drink mixes, infant formulas, meat sauces and gravies, dispersible oleoresins, pan releases, chewing gum and no-fat bakery and snack foods. Earlier this week, Solae's vice-president responsible for product line management Dan Camerer told FoodNavigator-USA.com that it was too early to tell how quickly most of the recent rises in input costs would be passed on. But he stressed that food price inflation was likely to continue through 2008, and that price rises would inevitably have to take place. Camerer said that higher prices would not necessarily be a bad thing, however, at least compared to the wider market as a whole. "We've seen soy protein isolate costs increase by around 16 per cent over the last year, but this is a lot less than the cost increases for other proteins," he said. "Sodium caseinate costs, for example, have grown by around 85 per cent, so there is potential for food manufacturers to manage some of these cost increases by switching to lower cost proteins such as soy." Camerer said that Solae had already managed to pass on some of the rise in costs and that the company was working hard to pass on more - as evidenced by today's announcement. Much of the rising cost of soybeans has been due to demand for biofuels, since soybean oil is a potential ingredient in biodiesel, sales of which have grown dramatically in the last year. Soybean oil prices have risen by more than 100 per cent over the last year, according to Solae. No company executive was available prior to publication of this article, however, to give an indication of the level of Solae's soy lecithin price increase.