Market Update

This curve is an illustration of the development of our 50 largest raw materials in Novadan (only chemicals). As shown, we have registered the figures since Q1 2014 and until now. There is no doubt that what we have seen during the past 18 months is an explosion of prices on raw materials.

by Jens Bramsen Sales Director

We have started 2023, and it is our feeling that the markets are stabilizing with regard to security of delivery of the raw materials.

We experience faster deliveries from our suppliers in generel which - of course - is positive and a sign that the markets are improving (and less panic with regard to supply)

The high inflation is holding on - and raw material prices are continuously at a quite high level compared to before.

This is supported by increasing costs in the market (binding energy contracts concluded in 2022, increased fixed operating costs and higher manufacturing costs in generel.) However, it is our expectation - with the stability in the markets - that we will see more stable raw materials prices.

In Q4 (2022) we found that especially the alkaline raw material prices took an enourmous increase. Fortunately it seams as if these prices are falling again. We are - however - a long way from previous prices and the market tendencies show a descending direction at the end of Q1.

Learning from experiences in 2022 it is difficult to predict the situation and what to expect.

At Novadan we follow the raw material markets closely in order to react on the market conditions while at the same time ensure the necessary raw materials for products and our customers.

• Force Majeure announcements from suppliers of hydrochloric acid is still a challenge in the market.

• Complex binders (MGDA): MGDA and EDTA are still challenged on delivery and price. It is expected to last all of Q2.

• Very high inflation rates in general (including wage increases) in all countries are pressuring the supply chain.

• Deliveries have improved significantly, compared to 2022.

• Q1 has shown lower energy costs (Gas and electricity) than what we saw in Q3 and Q4 in 2022, except the energy prices are still much larger than before. Several manufacturers have locked their prices in 2022 and we are therefore now dealing with higher prices in 2023.

• The war in Ukraine is still causing unsecurity and nervousness in the market and raw material supplies which have been sent from the East to Europe, no longer arrive due to sanctions etc.

On April 27., our Application Specialist – Membran & CIP: Ronni Rasmussen will be presenting at a seminar in Billund held by Dansk Mejeritekniske Selskab.

Ronni will explain the cleaning challenges in this connection as well as the development in the industry from pure milk products to the time where cheese with black cumin, yoghurt with strawberries were launched and up till today where there are numerous examples of milk and plants being mixed, and where milk is produced based on eg. oat.

At the same time, we have become more aware of the allergen-risk, and unwanted allergens in products have a lot of focus as more allergies are identified among human beings.

The “takeaway” or main message will be to make the food manufacturing industry think of involving Novadan already when developing products with a mixture of ingredients (milk and plants) or when building a separate line with eg. oat milk or maybe when starting to add a vegetable powder to the cream cheese.

1. Melt butter in a casserole, empty the casserole and rinse with 400C hot water.

2. Melt vegetable margarine in a casserole, empty the casserole and rinse with 400C hot water.

3. Boil fruit porridge (black currant) in a casserole, empty the casserole and rinse with 400C hot water.

4. Boil oat porridge in a casserole, empty the casserole and rinse with 400C hot water.

With these 4 tests you will discover that cleaning these four casseroles will differ a lot and that ordinary dish washing agents will have a hard time with the burned oat porridge and that margarine requires more work than butter....

by Jens Ole Jensen Sales Manager Food