Market report Starch: Manufacturers demand massive mark-ups in Q2 price round
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An imbalance has developed in the market for cereal starches in recent weeks. Particularly in the wheat starch segment, limited production in some cases is being met with increased demand from the packaging industry.
As a result, some buyers are complaining about an uncertain supply situation. In addition, those negotiating new contracts for the second quarter are being confronted with higher prices. The manufacturers of wheat starch are demanding a massive price increase in the current price round. Buyers who had concluded supply agreements up to and including June 2021 at the turn of the year do not expect any ad-hoc changes.
Paper manufacturers report to EUWID that the continued operation of their mills is currently often at a standstill. Procurement difficulties with the raw material recovered paper, special chemicals and starch are having an impact here, players confirm on several occasions.
Suppliers doubt that the situation will calm down
Demand has increased massively, representatives of the starch industry emphasise. The continuation of the lockdown in parts of Europe is not expected to calm things down, as the demand for packaging will continue to be driven not least by online trade. In addition, with the completed capacity expansions in the packaging paper sector, it can be assumed that these paper machines will increasingly reach full capacity, which will increase the demand for starch. Some market experts are saying that, against the background of this development in cereal starches, the potato starch business could experience a revival. The use of native potato starch in the paper industry has declined sharply in recent years. This was not least a question of price, experts know.
