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

PHILIPPINE WEATHER:

• According to  Philippine Atmospheric, Geophysical and Astronomical Services Administration (PAGASA), a tropical cyclone with the international name “Mawar” was spotted outside the Philippine Area of Responsibility (PAR), and is forecasted that it may turn into a supertyphoon.  The tropical cyclone will enter PAR by May 26 or 27, 2023, and will likely recurve towards Japan before reaching the Philippine landmass according to PAGASA.
• Mawar is forecast to enhance the Southwest Monsoon and may trigger monsoon rains over the western portions of Visayas, and Mindanao on Sunday and Monday and over the western portions of Luzon and Visayas on Sunday onwards.
• Another low-pressure area is forecasted to form by May 31, 2023, in the northern portion of the West Philippine Sea. This low-pressure area has a low probability of becoming a tropical cyclone but triggers rain showers and thunderstorms in the western seaboard of the Philippines.
• The tropical cyclone is expected to bring rough to very rough seas over the northern and eastern sections of Luzon as it moves towards the country. The rest of the archipelago will have moderate to rough seas. Shifting in weather conditions may affect the local seaweed farming in the Philippines, and a sudden shift in water temperature may cause diseases such as Ice ice in seaweed crops.
• Recent conditions and model forecasts indicate that El Niño may emerge within the months of June to August 2023 with an 80% probability that may persist until the first quarter of 2024 according to PAGASA.

MAY 2023 RAINFALL FORECAST

LOGISTICS:

International:

• Ports in the Asia-Pacific to most regions in the world, as well as intra-Asia ports are all operating normally with no major disruptions.
• On the other hand, Ports from North America have 0-3 days waiting time, and ports in Africa have an average of 15 days waiting time.

• Ports in Asia Pacific to USA have successfully implemented a General Rate Increase (GRI) last April 15, 2023 and have announced another increase last May 1, 2023 according to DFG Global Forwarding .
• Utilization of Intra-Asia ports are currently reaching by 80-90%. In addition, it is reported that rates in Intra-Asia trades are currently stable according to DFG Global Forwarding.
• The Mexican government said last May 15, 2023 that they renewed Texas truck inspections at the Brownsville-Matamoros crossings have caused delays as long as 27 hours for freight shipments crossing the border. The inspections are meant to stop the smuggling of migrants and drugs. “The imposition of these inspections is creating millions in losses for both Mexican and U.S. firms,” the Economy Department said in a statement, adding the delays “mainly affect perishable goods.” (Source: NBC News)
• France has been hit by a series of one-day strikes since January 2023 as French workers protest against the government’s plan to raise the pension age from 62 to 64. Trade unions in France continue to reject the widely slammed pension reform and have announced a nationwide strike on June 6, 2023. This nationwide strike will greatly affect the movement of the supply chain in France. (Source: France 24)

Local:

• Vessel departure in Manila ports is recorded as on time with 1-2 days waiting time if delays occurred.

SEAWEEDS AND CARRAGEENAN:

• According to Philippine News Agency, about 84 percent, or 62.95 km. of the 74.71 km. shoreline affected by the oil spill in Oriental Mindoro province has been cleaned up as of May 10, 2023. The fishing ban stays in 6 Oriental Mindoro areas and was lifted in 7 other towns due to the improving water conditions. Seaweed farming in the area remains affected. Take note that most E. spinosum farms were located in Mindoro.
• The current price of E. cottonii shows a gradual decrease due to the subsiding demand and high supply in the market.
• The price of E. spinosum is forecasted to decrease gradually until the end of this month due to the current high supply and low demand. The crops from the farms of E. spinosum located in Mindoro that were reached by the oil spill show signs of declining quality. According to the seaweed farmers, seaweed crops were prematurely harvested before the oil spill hits their area resulting in a yield percentage to decrease.

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 Maltodextrine – 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 by 5% despite the price softening last month (April 2023) due to excessive rains in key guar-growing areas. The demand is currently stable due to the gradually decreases of demand in the Oil industry.