A condensed update of the current market and supply chain condition of hydrocolloids with a closer look at Carrageenan. This follows our update last June 2023.

PHILIPPINE WEATHER:

• A tropical Cyclone formed in Northern Luzon and will generally move northwestward toward the Southern China Area. The Tropical Cyclone has an international Name “Doksuri” and a local Name “Egay”. “Doksuri” will bring cloudy skies with scattered rain showers and thunderstorms in the major areas of Luzona and Stormy weather is expected over the areas directly affected by the tropical Cyclone, particularly the extreme Northern Luzon.
• Slight to moderate seas will be experienced over the whole archipelago. TC “Doksuri” will bring rough to very rough seas over eastern and northern Luzon during its passage. Gradual improvement of weather conditions is expected over the areas affected by the tropical cyclone as it moves away from the country.
• Tropical Cyclone “Doksuri” will affect the Philippine weather system until the first week of August 2023.
• A low-pressure area is forecasted to form in the Eastern part of the Philippine Sea in the 1^st week of August 2023. According to PAGASA, the said low-pressure area has a high likelihood to become a tropical cyclone, however, the low-pressure area will likely exit the PAR until August 8, 2023.
• El Niño is still present in the tropical Pacific and will persist until the first quarter of 2024, showing signs of strengthening in the coming months

JULY 2023 RAINFALL FORECAST

LOGISTICS:

International:

• The Canadian International Longshore and Warehouse Union (ILWU) recorded a series of strikes since July 1, 2023, over the issues like port automation, outside contracting, and the increasing cost of living. Last July 13, 2023,  A tentative agreement was reached between the ILWU and their employer resulting in a freeze of the current strike. However, the ILWU rejects the tentative agreement last July 18, 2023, suggesting that terms would not protect their members’ jobs and that the BCMEA members have not adequately addressed the cost-of-living issues. (Shapiro.com)
• Currently, a series of strikes are expected to carry out by the Canadian ILWU workers as the agreement is still under review. According to Canadian National Railway, the disruption resulting from the port strike that has been carrying out the ILWU is forecasted to take two months to recover. Shippers with cargo routed through the Port of Vancouver and/or the Port of Prince Rupert may be impacted in the coming days because of the action.
• Asia Pacific to North European and Asia Pacific – Mediterranean trade demand is stable, however, volumes continue to increase since the month of May in line with the normal peak season. It is forecasted that ports in North Europe and the Mediterranean will experience some bottlenecks due to port congestion in the upcoming peak season.
• The situation in the major ports of America is currently worsening due to strong demand resulting in port congestion. The Los Angeles and Long Beach terminal’s productivity situation due to a potential labor shortage risk is still being closely monitored. Waiting times in major ports of America are as follows: (Source: Maersk)

• Intra-Asia ports Disruption caused by typhoons, especially at South China ports, could potentially cause a 1-2 day delay. With ports in Europe and North America continuing to face congestion, cargo imports to Asia may also face delivery delays

Local:

• As Typhoon Doksuri lashed northern Philippine provinces, Philippine Coast Guard imposed a no-sail order in affected ports. According to PCG, More than 3,700 inter-island ferry passengers and cargo truck drivers, along with nearly 100 passenger and cargo vessels and motor bancas were stranded resulting in delays in major deliveries coming from the Northern and Eastern Areas of the Philippines.

SEAWEEDS AND CARRAGEENAN:

• The demand for E. cottonii in the market is improving as the peak season approaches. Currently, the price is increasing and is forecasted to continue in the next few months. The quality of E. cottonii remains stable as the stocks came from the harvest from the summer season.
• The price of E. spinosum is slowly increasing due to the current flow of demand which is gradually growing. The current output from Mindoro is still affected by the recent oil spill resulting in poor quality. According to the seaweed farmers in the area of Mindoro, they are forced to harvest their crops before the oil spill reached their farming areas, which resulted in underdeveloped seaweed output.

OTHER HYDROCOLLOIDS:

• Konjac Gum – The price of Konjac Gum retains its high price due to the weakening of US Dollars against the Chinese Yuan. The severe drought that occurred in the area of China where Konjac gums are grown is still affecting the supply resulting in a delayed harvest and increasing price.
• Locust Bean Gum – The price of LBG is currently stable at present since the on-hand LBG supply of kibblers and stockers remains firm. It is forecasted that the price will remain stable in the next few months as the harvesting season will start within the months of July to September. 
• Tara Gum – The price of Tara remains stable as the supply remains high from the harvest season that started last August and ended in December. In addition, the price of Tara is highly correlated to the price of LBG.
• Monoglyceride – Palm Oil (the main raw material in monoglyceride production) is forecasted to be stable resulting in the price of monoglyceride remaining stable as well this year despite volatility last year.
• Xanthan Gum – The demand for Xanthan Gum remains high in the current quarter of 2023 despite the short supply in the market driving the price to increase. The price fluctuations of corn and coal also have a certain impact on the price knowing that they account for 70% of the production cost of Xanthan Gum.
• Dextrose Monohydrate and Maltodextrin – Prices of Dextrose Monohydrate and Maltodextrin remain volatile due to the weakening of US Dollars against the Chinese Yuan. According to suppliers, it is forecasted that the price of dextrose will gradually decrease as the producers increase their supply capacity in the market while maltodextrin’s price is forecasted to increase due to a recent explosion in one of the largest factories in China.
• Guar Gum – The price of Guar Gum has gone up due to excessive rains in key guar-growing areas. The demand is currently stable due to the gradual decreases of demand in the Oil industry.