Beneo-Remy has reassured customers that prices for its rice-derived ingredients will not rise ‘for a few months at least’ after trade restrictions and volatility on world markets played havoc with raw material costs earlier this year.
The company, which makes rice flours, starches, proteins and stabilised rice bran, hiked its product prices by 40 per cent in June after rice prices nearly tripled between April 2007 and April 2008, from $317 a tonne to a record $907, according to the International Rice Research Institute. At that time, Beneo-Remy had said it was unable to comment on whether it would drop its prices in the future if markets were to stabilise.
Since then, prices have retreated – to $686 a tonne in September – but this is still much higher than at any time prior to April this year.
Nevertheless, Beneo-Remy’s sales and marketing manager Vincent Caluwaerts is now confident that prices can at least be held at their current level for the foreseeable future.
At HiE in Paris, he told BakeryandSnacks.com: “We were forced to increase prices in June when the cost of raw materials nearly doubled [in a two month period]… We can’t protect against government decisions but we can guarantee price for the next few months at least.”
To allow a reliable year-round rice supply, Beneo-Remy sources rice from all over the world, but it was particularly hard hit when authorities in major rice-exporting countries India, Vietnam and Egypt closed their borders to exports in order to safeguard domestic supply.
Ensuring organic supply
Additionally, the company sources all of the rice for its baby and infant nutrition range from European growers, where the supply-demand balance is especially precarious, to allow complete product traceability and regular checks that farmers are adhering to organic standards.
Caluwaerts said: “We are dependent on the European market, which is still on the rise, but we stored extra rice in Belgium and learned how to ensure our supply.”
Vietnam has now lifted its rice export ban and Egypt is set to follow suit in April.
Meanwhile, Caluwaerts said that there are still sufficient reasons for the company to continue sourcing its baby-quality rice from Europe.
“The organic market is a very important niche market. Growth is slowing down, but there is still growth,” he said.
The supply-demand balance
Export restrictions exacerbated several other factors that have put a squeeze on supply over the past year, including droughts in Australia and flooding in Bangladesh.
Grain prices are also closely linked, meaning that rice prices have also been susceptible to the instabilities of wheat, soy and corn markets. This is partly because as the cost of one type of grain rises, consumers and manufacturers tend to look to cheaper alternatives, thereby transferring the supply problem.
Speculation on commodities markets has also been widely blamed for affecting grain prices across the board.