Cost of caramel colors rises

Meanwhile the company has also announced that it is closing its caramel color manufacturing operation in Modesto, California at the end of this year.

DD Williamson stated in its October 2008 Color Confidential​ newsletter sent to customers, that in the US it has absorbed dramatic increases year by year in raw material catalyst costs and in some cases the increases were as much as 100 percent.

It added: “Combined with known corn price increases and a rise in transportation and energy costs, we project a 15 percent to 30 percent increase in our liquid and powdered caramel color prices effective January 1, 2009.”​

In addition it reassured customers, following the closure of the Modesto plant, that they would be serviced from its Louisville plant which was expanded in 2004.

Caramel color is the world's most widely consumed (by weight) food coloring. It is produced commercially by heating sugar and other carbohydrates under strictly controlled conditions for use in sauces, gravies, soft drinks, baked goods and other foods.

The value of the international colorings market was estimated at around $1.15bn in 2007, up 2.5 per cent from $1.07bn in 2004, according to Leatherhead Food International (LFI). Caramel color sales were worth over $112m in 2007.

Costs for US corn hit a high of about 700 US cents a bushel in July this year but have since fallen to about 560 US cents a bushel.