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Cost & Price MonitorStarches, Starch Sweeteners & Fermentation Products
www.lmc.co.ukBrochure
A key issue facing agro-processors and users of carbohydrates, whether starches, starch sweeteners or fermentation products, is the absence of regular and reliable price and cost information. What is driving changes in the market?
LMC’s new Cost & Price Monitor fills this information gap, providing regular data and analysis on the latest developments in prices, costs and margins to show clearly how, and why, markets for these products are evolving.
We analyse the impact, month by month, of changes across products and markets to key cost drivers:
Raw material prices Co-product values Processing costs
Each month, it provides market insight across 9 products and 7 markets.
Key metrics are:
Product prices/values
Raw material costs
Co-product values
Net cost of raw material
Processing costs
Product margins
Clients are able to select the product groups that they wish to monitor.
Objectives of the service
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The service monitors selected products within 3 product groups: native starches, starch sweeteners and fermentation products.
Clients can select the product group of their choice.
If clients would like other products to be added to their Monitor, please contact LMC.
Starches
Native corn starchNative wheat starchNative cassava (tapioca) starch
Starch Sweeteners
Glucose syrup HFCS (42 and 55)MaltodextrinCrystalline dextrose
Fermentation
Lactic acidCitric acid
Products
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Markets
The service covers 7 key markets and 3 carbohydrate sources – corn, wheat and cassava (tapioca).
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North AmericaChina Thailand Vietnam France France Hungary USCorn Cassava Cassava Corn Wheat Corn Corn
Starches Native starch Starch Sweeteners Glucose syrup
HFCS 42 HFCS 55 Maltodextrin Crystalline
Fermentation Products Lactic acid Citric acid
Asia Europe
If clients would like other markets to be added to their Monitor, please contact LMC.
Native starches HFCS Fermentation products
Product prices/values
For each market, we track product prices.
Depending on the product, we use the best information on prices available. This includes reported market prices and trade unit values. Where no transparent market prices are obtainable, we use LMC estimates, drawing on our long-running in-house databases.
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200
400
600
800
1,000
1,200
1,400
1,600
Jun 2015 Jun 2016 Jun 2017 Jun 2018
US$/
tonn
e
China lactic acid China citric acid
200
250
300
350
400
450
500
550
Jun 2015 Jun 2016 Jun 2017 Jun 2018
US$/
tonn
e
US HFCS 55 EU HFCS 42 China HFCS 55
200
250
300
350
400
450
500
550
600
Jun 2015 Jun 2016 Jun 2017 Jun 2018
US$/
tonn
e
US corn starch EU wheat starchThai cassava starch
Similarly, each month we track the price of the different crops used as raw materials in each of the featured markets.Crop prices also differ by crop and market and, again, we include trade unit values, reported market prices or LMC estimates.
Asian carbohydrate crop prices EU carbohydrate crop prices
Raw material costs
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40
50
60
70
80
90
100
200
240
280
320
360
400
440
Jun 2015 Jun 2016 Jun 2017 Jun 2018
Cassava roots (US$/tonne)
Mai
ze (U
S$/to
nne)
China corn (North East) Thai cassava roots (North East)
100
110
120
130
140
150
160
170
180
Jun 2015 Jun 2016 Jun 2017 Jun 2018
€/to
nne
Hungary maize France wheat
To estimate the net cost of a raw material, we have to take account of the value of co-products from grains processing.
Each month we monitor:
• Co-product values in each market.
• The net cost of the raw material by crediting the value of these co-products against the raw material price.
Co‐product values
US, corn co-product prices
France, wheat co-product prices
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80
100
120
140
160
1,100
1,200
1,300
1,400
1,500
Jun 2015 Jun 2016 Jun 2017 Jun 2018
Bran (Euros/tonne)
Whe
at g
lute
n (E
uros
/tonn
e)
Wheat gluten Bran
60
80
100
120
140
160
200
400
600
800
1,000
1,200
Jun 2015 Jun 2016 Jun 2017 Jun 2018
Corn gluten feed (US$/tonne)
Cor
n gl
uten
mea
l and
cor
n oi
l (U
S$/to
nne
Corn gluten meal Corn oil Corn gluten feed
Co-products
Corn Corn gluten feed (CGF)Corn gluten meal (CGM) Corn oil
Wheat BranVital wheat gluten (VWG)
Each month we refresh our estimates of processing costs. We focus on factors that tend to change the most from month to month such as fuel costs – electricity and gas. We also regularly review and update costs relating to labour, chemicals and water, plus we also re-visit our technical coefficients for product and co-product yields.
US, processing costs of HFCS 55 Hungary, processing costs of native corn starch
Processing costs
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0
20
40
60
80
100
120
140
160
180
Jun-2015 Jun-2016 Jun-2017 Jun-2018
US$/
tonn
e of
HFC
S 55
Fixed costs Variable costs
0
20
40
60
80
100
120
140
160
180
200
Jun-2015 Jun-2016 Jun-2017 Jun-2018
€/to
nne
of s
tarc
h
Fixed costs Variable costs Other costs
Drawing together the monthly analysis of raw material costs, co-product values and processing costs, we present full cost of production estimates for each product by location. This enables users to track the direction and magnitude of changes in the cost of manufacturing their chosen products.
US, full cost of HFCS 55 production Hungary, full cost of native corn starch production
Full costs of production
9
0
50
100
150
200
250
300
Jun-2015 Jun-2016 Jun-2017 Jun-2018
US$/
tonn
e of
HFC
S 55
Fixed costs Variable costs Net raw material cost
0
50
100
150
200
250
300
Jun-2015 Jun-2016 Jun-2017 Jun-2018
€/to
nne
of s
tarc
h
Fixed costs Variable costs Other costs Net raw material cost
Finally, by bringing together the analysis of product prices and costs of production, we present estimates of margins for each product and market. This enables clients to see whether cost pressures are feeding through to product prices or the extent to which reduced production costs are translating into product prices.
US, HFCS operating margin Hungary, native corn starch operating margin
Margins
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0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
Jun-2015 Jun-2016 Jun-2017 Jun-20180%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
Jun-2015 Jun-2016 Jun-2017 Jun-2018
Cost & Price Monitor – Deliverables and contacts
You receive:
For each product group that you select, you receive:
Excel Dashboard Each month, results in Excel for each product and market selected, with key signposts of what has changed each month
Reasonable access For discussion of the analysis by telephone and emailto LMC experts
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For further information, please contact:
Philip Digges, Global +44 1865 [email protected]
Andrea Kavaler, The Americas +1 212 586-2427 [email protected]
Irma Darwis, South East Asia + 6010 221 [email protected]
Clients can select the product group(s) of their choice:
Starches
Starch Sweeteners
Fermentation Products
Annual subscription fees
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For a one-year subscription (12 monthly issues) to LMC’s Cost & Price Monitor:
• Starches US$ 4,000
• Starch Sweeteners US$ 5,000
• Fermentation Products US$ 4,000
• All Products Groups US$10,000
The fee can be paid in sterling (£) or euro (€), at the prevailing exchange rate at payment
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LMC client list
LMC has a global client base for its analysis, reports and services on starch products and grains. Companies that have used LMC’s services include:
AB MauriAdecoagroAgrana Zucker und StärkeAjinomotoArcher Daniels MidlandArkemaAsian StarchAvebeBASFBayerBungeCanadian International Grains InstituteCargillCereals CanadaChamtorChemigateChina National Cereals, Oils & FeedstuffsSA Citrique BelgeCJ CorpCoca‐ColaCofco Biochem & Bioenergy DivisionCorn Refiners AssociationCristal Union
DowDuPontDSM Emsland‐StärkeEuropean Commission – DG AgricultureEvonik IndustriesGalamGeneral StarchGlencoreGordianGrains Research Development (GRDC)IngredionItochuJungbunzlauerKerry IngredientsKraftHeinzKoch IndustriesLesaffre InternationalManildraMitr Phol SugarMitsubishiMitsuiMondelēzNordzucker
NovozymesOdebrecht AgroindustrialOlam InternationalPepsiCoPrajRaizenRoquetteSavolaSiam Modified StarchStarch EuropeSüdzuckerSuiker UnieSumitomoSyngentaTate & LyleTereosTongaat‐HulettTotal PetrochemicalsUnileverUS Dept of AgricultureViresolVivesciaWorld Bank
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Oxford4th Floor, Clarendon House52 Cornmarket Street Oxford OX1 3HJUKT +44 1865 791737F +44 1865 [email protected]
New York1841 Broadway, suite 906New York, NY 10023USAT +1 (212) 586 2427F +1 (212) 397 [email protected]
Kuala LumpurSO-30-8Menara 1No.3 Jalan BangsarKL Eco City59200 Kuala LumpurMalaysiaT +60 3 2202 [email protected]
