Starch sugars demand brightens as lockdowns are further lifting in the EU
Roquette Market analysis Starch sugar is a cereal sweetener obtained from wheat or corn starch hydrolysis and used in a wide range of food applications (e.g., confectionery, beverages, dairy products, baked goods) for its sweetening, anti-crystallizing, binding and texturizing properties but also as a carbohydrate substrate in fermentation processes.
Market demand for starch sugars was significantly affected by the COVID-19 pandemic lockdown measures last year, with usage in main food application shrinking sharply. With vaccination rollouts accelerating, lockdowns are expected to be lifted further during the summer season, boosting “out-of-home” food sales channels. This will enhance sales of main food end-applications boosting cereal sweeteners usage.
Surge of starch sugars demand in the fermentation industry
Usage of starch sugars in the fermentation industry is also surging; in a context of high price of sugar-beet, it is becoming a more attractive source of carbohydrate for the industry.
We do expect demand to remain strong as interest in bio-industry is growing, industrials striving to move away from petrol-based products.
The availability of beet-based sugar will remain tight as the current EU crop is below expectations, and frost damage earlier this year could further tighten the market as consumption start recovering.
This may limit the overall sugar source availability for the industry.
Limited starch sugars’ availability tightening the market
The supply of starch sugars is limited to the overall starch slurry availability. With two assets recently removed from the market, the supply and demand balance for starch sugars is tightening.
In this limited supply market situation, starch derivative processors have to find the right balance in the process of their starch slurry to produce a range of starch derivatives that both meets market demand and covers high raw material costs to remain competitive. This may limit further starch sugars supply availability in Europe as the food industry is recovering from the pandemic faster than expected.