Chinese food ingredient prices rising in year 2017 after spate of plant closures

After a year-long race to the bottom by food additive manufacturers in China, most of food ingredients have grown steadily since middle 2016. Here is a good example of recent pricing trends. Since May 2016, acesulfame-K sweetener prices have increased remarkably, with analysts expecting further increases then stabilisation. One of food ingredients companies in East China increased the ex-works price of ace-K, a calorie-free sugar substitute, to US$7,163 per tonne in end year 2016. The ace-K price went up almost 30% in 12 months during a period that saw the commodity’s lowest prices in two years. China’s ace-K market has shown sizeable fluctuations since February 2015.

In end 2016, the Chinese government issued so-called “pollutant discharge licences” so as to increase environmental protection. This will spell danger for Chinese food ingredients companies. Due to dreadful air and water quality in China, all of food ingredient manufacturers are required to commit to set levels of pollutant emissions until 2020, e.g.,  factories of xanthan gum and cellulose gum, After that time they must apply for five-yearly licences. The policy has been to clear out past vagueness and introduce stricter supervision by monitoring pollutant discharge by business, instead of by administrative area. Government departments have been told to conduct more frequent inspections, and have also been given the right to punish emissions offenders by limiting production, suspending licences and shutting down plants.

According to industry analyst CCM , the policy may well have an impact on the food ingredients industry in year 2017, due to the high levels of pollution during processing. Some pollutants from the production of sucralose, for example, are not easily biologically degraded.

As one of leading food ingredient suppliers and manufacturer in China, Sinofi Ingredients struggle to provide high value service for our clients. We will help our clients track price trends for their purchasing decisions. Our price information database will be based on averaged ex-works prices in the market and updated on monthly basis.

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