Xanthan Gum: Another Possibly Sticky Situation?

Spend Matters welcomes a guest post from Robert Miles, at Mintec Ltd.

We have spent a reasonable time looking at guar gum, one of the world's favourite hydrocolloids -- so let's have a look at some other thickening agents.

Xanthan gum is a polysaccharide with properties very similar to cornstarch. It is generally derived via the fermentation of the glucose in corn syrup by the bacteria Xanthomonas campestris. Its cost of production depends primarily on the cost of energy, labour and corn.

With the way corn has been behaving on a US level, there could be some interesting times ahead if guar does not decrease in price.

Xanthan gum is widely used as a substitute for egg whites in salad dressings, sauces, and fillings. It is also often added to low-fat or non-fat dairy products such as some types of non-dairy ice cream to bring a "fatty feel" to the food.

Total global production in 2012 is expected to be in excess of 110,000 tonnes. China became the world's largest producer of xanthan gum in 2005 and now produces and exports about two thirds of the world's supply. Other major producers and exporters are the US, France, Austria and Japan.

Fierce competition during the global financial crisis of 2008/09 drove xanthan gum prices down. The price of xanthan gum in China, in terms of USD, however has now increased by over 25% year-on-year.

Not only have the prices of energy, labour, and corn risen year-on-year, xanthan gum is increasingly been used as a less expensive alternative to guar gum in many food-based applications. It has even seen growing use by the oil industry to thicken drilling mud, enabling the more efficient extraction of crude oil and natural gas (one of the root causes of the guar gum problems).

Guar prices have since fallen back on the expectation of a good Indian guar crop in November, but if this global demand for guar continues to outstrip the new guar supply, traditional users of guar gum such as the food industry are expected to increasingly look for alternative thickeners or gel forming compounds such xanthan gum, starches, pectin or agar. It will be fun to look for the crossover points in price.

- Robert Miles, Mintec Ltd.

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  1. Bret Gallagher:

    Subsidies to the corn industry for turning corn into ethanol which gets added to unleaded gasoline certainly doesn’t help corn and food prices. It takes 6 units of corn to equal 1 unit of energy compared to sugar, which is 1 to 1.

    Yes, Xanthan prices have risen. Although it can be made domestically, guar gum suffers from some price issues as well with the very increasing cost of international freight prices.

    As far as Xanthan gum in drilling goes, I doubt that it will change consumption much as Xanthan still provides a good, lubricating solution for drilling formations.

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