Starch producers ask paper mills to pay much higher prices


Negotiations for starch deliveries in the fourth quarter are currently underway, and manufacturers are asking for hefty mark-ups. Paper producers claim that starch suppliers try to exploit the rise in commodity prices and overcompensate for weak business.

After prices for all three grades of starch often dropped substantially in the third quarter, starch producers are now announcing price targets equivalent to hikes of 20-30% in some cases. EUWID respondents noted that the new harvest situation was creating uncertainty on both sides of the market.

Starch industry representatives stressed that the cost explosion on the commodities side was plain to see. Wheat and corn are trading at unusually high prices, and forecasts give little reason to believe this situation will change markedly, they say. Accordingly, a price hike for starches was necessary, producers argued, who expected mark-ups of more than €100 for wheat starch and €60-100 for corn starch.

The competitive situation on the commodities market seems to be having a strong influence on the wheat starch business. In this market, the most extreme positions have been taken in the discussions and resistance is forming among paper manufacturers.

Producers of graphic and packaging paper are increasingly switching between different types of starch. For example, an unusual price difference developed recently in the modified segment, which suppliers attributed in part to aggressively priced shipments of potato starch.

⇒ Find this article in its entirety and any associated background information in EUWID Pulp and Paper no. 39.

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