RhodiaFood, part of French speciality chemicals company Rhodia, recently announced that it would hike up the price of its Rhodigel food grade xanthan gum by 10 per cent.
The product, which is used as a gelling and stabilising agent in ice creams, is colourless and remains stable at relatively high temperatures.
Effective from 1 July 2003, the increase is occuring in a market where demand remains strong - average growth of 5-6 per cent per year - but recently installed industrial capacities have been quickly absorbed by the market and no new significant units are forecast by the manufacturer.
In a statement the company said that in addition, xanthan gum price levels, in constant erosion for years, are insufficient to allow the investments required to follow up on market demand.
The situation is currently aggravated by the present tension on energy prices and the increase in transport and insurance costs.
Rhodia Food, structured within the Food and Consumer Products division of the Rhodia group, is the world's second largest producer of xanthan gum, falling behind the world leader CP Kelco.