Raw material prices skyrocketing
(Bonn) - Development in raw material prices calls for price adjustments. In such a moderate but unambiguous way the Federation of the Food and Drink Industries (BVE), titled the statement of its president, Jürgen Abraham, at the ANUGA Food Fair in Cologne on 16 October 2007. Since then, the situation has not changed the rise in raw material prices is still going on - with no prospect of an end.
A constantly rising demand in India, China and other Asian countries leads to another rise in maximum prices for a large number of spices traded in US $. The current high Euro rate may balance this progress only to a small extent. The crude oil price still climbs from one to another all-time high. A market calming in the near future seems likely, but is not at all reliable or even probable. This especially affects the energy-consuming processing of herbs: The drying of one kilogram of herbs requires 1.5 litres of fuel oil.
The course of raw material prices on the foodstuff market is comparable. The palm and the rape-seed price is 51 percent higher than in the previous year, Hungarian paprika, cloves and caraway are subject to a 20 percent increase. The price of mustard seed has even doubled as well as the price for thyme from Poland, the coriander price has gone up by more than 120 percent. For anise and saffron there is an increase of almost 50 percent; beef extract costs 80 percent more than in 2006, oregano two to three times more.
Another important price booster: Almost all industrial countries promote the production of hydrocarbon fuels from food plants. Thus, on 5 December 2007, the German Federal Government has passed an amendment of the so-called bio fuel quota law, the aim of which will be to raise the share of bio fuels by 20 volume percent until 2020. The European Commission follows the same goal. Although the German Government has slightly corrected its goals, meanwhile the situation is still bad. Biodiesel from rape and palm oil, bioethanole from wheat and maize: receiving state funding makes farming profitable, whereas the market runs short of raw materials and leads to sharp prices increases (maize + 25 percent, wheat + 77 percent compared to the beginning of the year). This has a cost-increasing effect on forage which on the other hand influences the dairy and meat prices. India and China significantly raise their meat production buying maize as forage on the world market. Maize and wheat serve as raw material for a lot of foodstuffs and food ingredients such as glucose, dextrose, malt dextrin, bread crumbs and starches, which altogether have to record an increase in prices. A poor sunflower crop in the main growing areas at the Black Sea (Rumania, Bulgaria, Turkey and Ukraine) followed by a low yield of sunflower oil additionally boosts rape oil prices.
Bioenergy policy has an indirect impact on the phosphate price: Growing plants for energy production requires fertilisation. Phosphoric acid for the production of fertilisers also serves as raw material for the production of phosphoric acid for the use in foodstuffs; hence cost increases directly affect the production costs of phosphates used for meat production. This effect and the increasing demand due to a worldwide growth of population lead to big phosphate suppliers no longer being prepared to conclude annual contracts. Purchase problems arise even for raw materials like glycerine.
Added to that: Acreages for energy plants cannot be used for other plants any longer. As a result, the growing of herbs is considered unprofitable. Temporary agricultural workers, mainly in the new Eastern EU countries, migrate into the cities. The herb market runs short. In Germany and other EU member countries this bioenergy policy only leads to increasing prices for foodstuffs. Agrifuels threaten the foodstuff distribution and the climate worldwide: In Indonesia, Malaysia, Columbia and Brazil the rain forest is slashed-and-burned to clear space for palm oil or sugar cane plantations for energy plant cultivation.
The demand, especially in Asian countries, is expected to rise again. A correction of the political aberration in bioenergy policy cannot be recognized. Consumers as well as industry will in the long run have to cope with this development.
Quelle und Kontaktadresse:
Fachverband der Gewürzindustrie e.V.
Dirk Radermacher, Geschäftsführer
Reuterstr. 151, 53113 Bonn
Telefon: (0228) 216162, Telefax: (0228) 229460
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