September 2012
Vol. 3-12
Starches and Sweeteners Price Monitoring
Quarterly Price Review of Starches, their Sweetener Derivatives and Sugar
in Key World Markets
by
GIRACT
24 Pré Colomb Tel: +41 22 779 0500 1290 Versoix/Geneva Fax : +41 22 779 0505 Switzerland [email protected]
www.giract.com
Sweeteners and Starches Price Monitoring - 2 - Vol 3-12 September 2012
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Key Comments – Third Quarter 2012
Global
• Drought across the US Midwest, Canada, Russia and Ukraine has hit corn and wheat harvests, estimated to be down by about 20%, and has let to a spike in raw material prices. Maize prices have increased by 25% since January and wheat prices by 30%, even 50% in the US
• In September, the world cereal price index reached the highest level since April 2011; grain prices in July surged 17%, the biggest jump since February 2008
• A report from the World Bank recorded all time high prices for staples such as maize and soybean, which increased by 25% in July. It has pointed to a worrying trend in domestic prices in some of the world’s poorest countries. It has called on all countries to strengthen their policies and systems to protect the most vulnerable members of their population, such as safety nets to ensure poor families can afford basic staples, sustained investments in agriculture, the introduction of drought-resistant crop varieties and keeping international trade open to the export and import of food
• The global stock to use ratio for grains has been reported by the FAO to be around 20%, more comfortable than in 2007-8. However, maize stock-to-use is at a historic low of 13% and even lower in the US. Given that the US accounts for more than 40% of world exports of maize, this development is significant
• According to the FAO, world food prices rose in September to the highest in 6 months, as dairy and meat producers passed on higher feed costs to consumers. Although there are grounds for concern, talks of a world food crisis are not justified and the agency has requested vigilance
• In view of the high volatility of agricultural commodity prices, several banks have announced a scaling back or cessation of their investments in food commodities. Speculative activity by banks and traders does have some effect on commodity pricing and this move has been welcomed in many circles. However, it is unlikely that food commodities will be removed completely from futures markets
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NAFTA
• USA : Maize: Across the mid-west rain or the lack of has been the measure for providing estimates related to yield, crop quality and thepotential crop price per bushel. The projected national average per acre of 166 bushels was a great dream. Harvested maize has ranged thisyear from zero to slightly over 200 bu./acre. The majority of the cropland yielded an average of 122-146 bu./acre. The third quarter resultedin weak export demand. Although China continues to purchase millions of bushels of US corn and Mexico continues to buy larger volumescompared to a year ago, total sales are lagging at a relatively slow pace to reach the USDA projection of 1.64 billion bushels for thisproduction year.
Presently, maize is reported at approximately USD 8.60/bu. with projections of USD 8.80 into the fourth quarter.
• USA : Wheat pricing has stabilized at USD 6.35-6.55/bu. The price looked solid but due to short maize yields, pricing has moved up to~USD 7.60 and could go to highs of around USD 9.00/bu. for the remaining quarter of 2012. The winter wheat crop looks to be slightly lessthan projected last quarter, and the USDA has reaffirmed the reduced 60 million bushel forecast for the 2013 yield
• USA : Potato starch : Native potato starch remained available; however, pricing continued to fall until recently and has just started to regainpremium levels. Recent spot pricing has put some potato starch at USD 1.60/kg, while average pricing is approximately USD 1.35/kg.Contracting for supply has become a critical issue for the industry with an average spot price of about USD 1.65/kg
• USA : Tapioca starch : High quality tapioca starch still continues to remain in short supply for use in N. America. However, good qualitytapioca starch being imported from S.E. Asia and Indonesia is available. Price has increased and market demand seems to be still increasing.The price has edged up to an average of ~USD 0.96/kg due to production, processing and political unrest issues in Indonesia. Thailand andother S.E. Asian countries are supporting some of this shortfall
• USA: US food and agriculture companies are actively campaigning against a proposal, initially in California, that would force them to revealtheir use of genetically modified ingredients arguing that complying with the law would push up costs which would be passed on tocustomers. Companies are fearful that they will no longer be able to market their products as “natural”
• USA: The American Bakers Association has reported that it has only to be a matter of time before a sugar reform amendment passes in theHouse. The current sugar regime forces bakers and confectioners to pay over the odds for sugar, making them less competitive and sendingfood manufacturing jobs overseas. The US sugar programme, which sets import quotas on sugar, enforces a minimum price for sugar in theUS market, limits how much US sugar processors can sell and forces USDA to buy surpluses and sell them to ethanol refineries, means that USsugar prices are artificially high. As recently as 4-6 months ago, US sugar users were paying almost twice the world average price for sugar,according to the ABA. Today, the disparity has decreased, but US sugar prices are still anywhere from 50-75% more than world prices
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Europe
• ## relevant commentary
Asia
## relevant commentary
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Exchange rates during September 2012 Symbol
Argentine Peso ARSBrazilian Real BRLChinese Renm inbi CNYEuro EURMexico MXN 4.38Indian Rupee INRRussian Rouble RUBThai Baht THB
0.77
30.55
1 USD =
51.65
3.751.70
Currency
6.32
31.07
Source: Oanda
Notes : Prices are indicative for purchases on an industrial scale in the respective markets and have often been averaged over several company/trader inputs. Prices were collected during the 1st half of September 2012, reported on commercial weight basis and ex-manufacturer (when produced) and ex-trader (when imported). Corn and maize as well as isoglucose, HFS and HFCS are used interchangeably in this report. From Q3 2012: Mexico has been added to the report From Q4 2010: HFS 55% prices have been discontinued in view of the limited interest in this product by clients From Q3 2010: Glucose syrup DE<20 (maltodextrin) prices have been introduced. Products with a DE varying between 17-21 have been reported From Q4 2009: Latin America was introduced and comprises prices for all starches and sweeteners from Argentina, with the exception of tapioca starch and
sugar which have been collected in Brazil. The latter price reflects the Sao Paulo region quotation. Giract will be reporting more starch and sweetener prices from Brazil in its forthcoming issues in order to present a comprehensive picture of Latin America as opposed to the one country of Argentina. Brazilian prices in Real have been translated into Argentina Pesos in order to provide coherency across tables and charts.
From Q4 2006: Cationic starch prices in USA and EU have been replaced by prices for the more relevant food grade modified starches: - waxy corn starch ether (hydroxypropyl waxy corn starch) in the USA - waxy corn starch ester (acetylated waxy corn starch) in the EU
The different process methods in EU and USA result in a noteworthy price difference Note – trader prices Reported prices are ex-manufacturer (when produced) and ex-trader (when imported). Ex-trader prices concern the following products/countries: LatAm: glucose syrup DE<20, potato starch Russia: glucose syrup DE<20, tapioca starch Thailand: maize, wheat, potato and cationic starches, glucose/high fructose syrups USA: tapioca starch
Disclaimer: Giract has reported its understanding of the current and future positions of the products relevant to this monitoring report. The objective is to estimate manufacturers’ prices includingpacking and taxes but excluding transport, based on interviews with various players across the selected regions. Whilst these are Giract’s honest recording of specific data collection, these must not be considered as an ‘official position’ of either a company or an industry in question. Giract accepts no liability for any errors or omissions in its information or forecasts or for any consequential loss.
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In local currencies/kg
2011:4 2012:1 2012:2 2012:3 2011:4 2012:1 2012:2 2012:3 2011:4 2012:1 2012:2 2012:3 2011:4 2012:1 2012:2 2012:3
China CNY/kg 3.15 3.28 3.07 3.40 2.49 2.28 2.32 2.44 2.49 2.28 2.32 2.44 2.91 2.47 3.15 2.91
EU EUR/kg 0.89 0.90 0.90 0.90 0.48 0.46 0.45 0.45 0.48 0.46 0.45 0.45 0.53 0.52 0.53 0.54
India INR/kg 26.00 26.50 27.50 27.00 18.50 19.50 20.00 21.50
L America ARS/kg 5.20 5.20 5.00 5.00 2.45 2.30 2.20 2.20 2.83 2.70 2.50 2.50
Mexico MXN/kg 7.50 6.50 6.50 7.20
Russia RUB/kg 18.90 19.40 22.30 22.30 19.00 18.70 18.70 17.00 20.20 20.80 20.80 18.20
Thailand THB/kg 20.80 20.80 20.80 20.80 14.65 14.65 14.70 14.65 14.50 14.50 14.50 14.50
USA USD/kg 0.90 0.95 0.99 1.00 0.47 0.47 0.48 0.49 0.49 0.49 0.51 0.53 0.53 0.53 0.54 0.55
DE <20
Price – 2012:3
42%
Glucose syrup
DE 63-65
High fructose syrup
DE 40-42(com.weight basis)
In USD/kg
2011:4 2012:1 2012:2 2012:3 2011:4 2012:1 2012:2 2012:3 2011:4 2012:1 2012:2 2012:3 2011:4 2012:1 2012:2 2012:3
China* 0.49 0.52 0.49 0.54 0.39 0.36 0.37 0.39 0.39 0.36 0.37 0.39 0.46 0.39 0.50 0.46 EU+ 1.16 1.18 1.14 1.17 0.62 0.61 0.57 0.58 0.62 0.61 0.57 0.58 0.69 0.68 0.67 0.70
India* 0.47 0.51 0.49 0.52 0.34 0.38 0.36 0.42 L America+ 1.21 1.19 1.12 1.06 0.57 0.53 0.49 0.47 0.66 0.62 0.56 0.53
Mexico* 0.59 0.51 0.51 0.56
Russia* 0.60 0.66 0.69 0.72 0.60 0.63 0.58 0.55 0.64 0.71 0.64 0.59 Thailand* 0.67 0.67 0.66 0.68 0.47 0.47 0.47 0.48 0.46 0.47 0.46 0.47
USA* 0.90 0.95 0.99 1.00 0.47 0.47 0.48 0.49 0.49 0.49 0.51 0.53 0.53 0.53 0.54 0.55
High fructose syrupGlucose syrup42%
Price – 2012:3DE 40-42(com.weight basis) DE <20 DE 63-65
* prices reported for maltodextrin (DE<20) powder+ prices reported for maltodextrin (DE<20) liquid
Sweeteners and Starches Price Monitoring - 8 - Vol 3-12 September 2012
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-6% -4% -2% 0 +2% +4% +6% +8%
USA
Thailand
Russia
Mexico
L America
India
EU
China
percent average change per quarter
USD price
LC price
DE<20 Glucose syrup price trendOctober/December, 2011 to July/ September, 2012
Sweeteners and Starches Price Monitoring - 9 - Vol 3-12 September 2012
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0.40
0.50
0.60
0.70
0.80
0.90
1.00
1.10
1.20
1.30
1.40
2010:4 2011:1 2011:2 2011:3 2011:4 2012:1 2012:2 2012:3
pric
e in
USD
/kg
China
EU
India
L America
Russia
Thailand
USA
Mexico
Running Quarterly Price Series of DE<20 October/December, 2010July/September, 2012
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In local currencies/kg
2011:4 2012:1 2012:2 2012:3 2011:4 2012:1 2012:2 2012:3 2011:4 2012:1 2012:2 2012:3 2011:4 2012:1 2012:2 2012:3
China CNY/kg
EU EUR/kg
India INR/kg
L America ARS/kg
Mexico MXN/kg
Russia RUB/kg
Thailand THB/kg
USA USD/kg
Tapioca(com.weight basis) WheatMaize Potato
Starch (native, food grade)Price – 2012:3
In USD/kg
2011:4 2012:1 2012:2 2012:3 2011:4 2012:1 2012:2 2012:3 2011:4 2012:1 2012:2 2012:3 2011:4 2012:1 2012:2 2012:3China
EUIndia
L America
MexicoRussia
ThailandUSA
Starch (native, food grade)
Maize Wheat(com.weight basis)
Price – 2012:3
Potato Tapioca
.
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-15% -10% -5% 0 +5% +10% +15% +20%
USA
Thailand
Russia
L America
India
China
percent average change per quarter
USD price
LC price
Tapioca starch price trendOctober/December, 2011 to July/ September, 2012
Sweeteners and Starches Price Monitoring - 24 - Vol 3-12 September 2012
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0.30
0.40
0.50
0.60
0.70
0.80
0.90
1.00
1.10
1.20
2010:4 2011:1 2011:2 2011:3 2011:4 2012:1 2012:2 2012:3
pric
e in
USD
/kg
China
India
L America
Russia
Thailand
USA
Running Quarterly Price Series of Tapioca starch October/December, 2010 to July/September, 2012
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In local currencies/kg
2011:4 2012:1 2012:2 2012:3 2011:4 2012:1 2012:2 2012:3China CNY/kgIndia INR/kgL America ARS/kgMexico MXN/kgRussia RUB/kgThailand THB/kg
EUR/kgEU
Price – 2012:3 Price – 2012:3 Cationic StarchModified Starch
USD/kg
food grade (com.weight basis)
USA
paper grade(com.weight basis)
In USD/kg
2011:4 2012:1 2012:2 2012:3 2011:4 2012:1 2012:2 2012:3
Mexico
paper gradePrice – 2012:3
food grade(com.weight basis)
EUUSA India
China
Thailand
Russia
L America
(com.weight basis)Cationic StarchModified Starch Price – 2012:3
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-2% -2% -1% -1% 0 +1% +1%
USA
EU
percent average change per quarter
USD price
LC price
Food grade modified starch price trendOctober/December, 2011 to July/ September, 2012
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0.50
0.60
0.70
0.80
0.90
1.00
1.10
1.20
2010:4 2011:1 2011:2 2011:3 2011:4 2012:1 2012:2 2012:3
pric
e in
USD
/kg
China
India
L America
Thailand
Russia
Mexico
Running Quarterly Price Series of Cationic starch October/December, 2010 to July/September, 2012
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In local currencies/kg
2011:4 2012:1 2012:2 2012:3
China CNY/kg
EU EUR/kg
India INR/kg
L America ARS/kg
Russia RUR/kg
Thailand THB/kg
USA USD/kg
Price – 2012:3 White sugar
Confectionery(com.weight basis)
In USD/kg
2011:4 2012:1 2012:2 2012:3
China
EU
India
L America
Russia
Thailand
USA*
Confectionery(com.weight basis)Price – 2012:3 White sugar
**USA sugar price per lb
Sweeteners and Starches Price Monitoring - 32 - Vol 3-12 September 2012
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0.40
0.50
0.60
0.70
0.80
0.90
1.00
1.10
1.20
2010:4 2011:1 2011:2 2011:3 2011:4 2012:1 2012:2 2012:3
pric
e in
USD
/kg
Running Quarterly Price Series of Confectionery grade white sugar October/December, 2010 to July/September, 2012
Note : USA price has been reported per lb ; other regions per kg
