Spiralling costs hit lactic acid prices at Purac

By Lindsey Partos

- Last updated on GMT

Related tags: Lactic acid, Acid

For the second time in six months, Purac raises prices for its
range of lactic acids as raw material and energy costs continue to
bite.

The latest in a string of ingredients companies to hike up prices, Purac said prices for its lactic and gluconic acid products will rise by 5 to 10 per cent from 1 November 2005.

Lactic acid, a natural organic acid present in milk, meat, and beer, is used extensively by the food industry as a flavour agent, preservative, and acidity adjuster in foods.

Applications include improving dispersion and whipping properties in dry egg powder, cheese spreads and salad dressings.

The lactic acid range at Purac, from about €0.70 to €3 a kilo, spans food and feed grade to the higher pharma grade.

But this week Purac, a division of Dutch ingredients firm CSM , warned the price increases are "an unavoidable consequence of rising raw material, packaging, energy and processing costs, which Purac faces around the world."

Prices will also rise for Purac's gluconic acid range, an acidulant prepared by the fermentation of dextrose.

The Dutch firm is far from alone in its move to pass costs onto the market. Already this month, Swiss-based Jungbunzlauer has raised prices for its citric acid, Solae has pushed up soy lecithin prices, ISP for its alginate range, and FMC lifted gum prices on spiralling energy costs.

Industries from steel to food continue to be hit by soaring energy costs. Prices for crude oil, both a key raw material and energy supplier for the food industry, recently topped a record $70 a barrel.

And the prices have been exacerbated by Hurricanes Katrina and Rita that last month ripped through the Gulf of Mexico, an important area for the extraction of oil, propelling fears of shortages.

Although since then they have fallen, oil prices rose today by more than a $1 on fears that a new storm is brewing in the CaribbeanIn addition, and as winter approaches in the US, the world's biggest energy user.

Reports this morning reveal that US crude climbed $1.07 a barrel, or 1.7 per cent, to $63.70 in early electronic trading. London Brent crude was up $1.02 at $60.50 a barrel.

Global oil consumption is expected to increase by 1.75 million barrels a day next year to total 85.2m barrels a day, the International Energy Agency forecast last week.

Related topics: Markets, Pricing Pressures, Ingredients

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