Inulin prices going up
higher production and raw material costs.
Market leader Orafti said it will increase the prices for both its Raftiline inulin and Raftilose oligofructose products by up to 4 per cent from January.
Netherlands-based competitor Sensus, which holds the second position in the concentrated inulin market, will also raise prices in the first quarter by "not more than 5 per cent", Ad Alberts, director of marketing and sales, told NutraIngredients.com.
Inulin fibres, which are seeing increasing demand in foods because of their reported effect on digestive health, are produced from chicory roots using high energy processes like evaporation and spray-drying. Production costs have therefore been hit by rising fuel prices, up by more than 30 per cent in the last year.
In addition, farmers are also facing increased costs, passing these on to this year's chicory harvest.
"We are all being hit by the same phenomenon," said Alberts. "We need to keep investing in clinical research because requirements are becoming stricter but if we don't increase prices, we won't have the means to do so."
Xanthum gum and starches have also seen price rises in recent months.
The inulin news follows announcements earlier this year from both Orafti and fellow Belgian company Coscura revealing plans for significant expansion of inulin output. Orafti is to invest €165 million on a second chicory-extraction plant in Chile scheduled to start production in the first half of 2006, while Coscura will increase annual production capacity to 45,000 tons through the conversion of a former sugar plant in the north of France.
While the new capacity has not come on stream yet, all inulin producers have seen double-digit growth in recent years. Frost & Sullivan data forecasts the prebiotics market, currently worth €87 million, to grow annually by 9.7 per cent, bringing the European fructan market up to €179.7 million by 2010.
Cosucra was unavailable to comment on the price rises.
