June 23, 2008
No link in the plastics supply chain seems immune to price increases, with the avalanche of price hike announcements now joined by pronouncements from numerous additive suppliers. Even those sourcing basic materials from natural products rather than oil are starting to feel the pinch. Graeme Tweddle, global business director of British-based Croda Polymer Additives (Hull), says his company has experienced not only increased fuel and energy costs but also is confronted with price hikes of natural oil feedstocks used by Croda to produce fatty acid amide-based additives such as erucamide or oleanmide.
He says the only practical source of erucamide is extracted from high erucic rapeseed, a plant that is neither an animal feedstock nor source of foods for humans. Yet regulations in Europe introduced last September that govern “set-aside land”, in other words subsidies for farmland that is not used to grow foodstuffs, have been altered so that some of this area previously used for rapeseed production could be switched to grow grain and other food products.
“Whereas in the past farmers liked to grow high erucic acid rapeseed (HEAR) on such set-aside land, they now have no incentive to do so and this year industrial HEAR is competing with cereal as well as biofuel crops for farmland,” Tweddle says. He points to market prices for natural oils that have almost doubled in the last 12 months and speculates prices will continue to climb, foreseeing a tight market in natural oils for the next few years.—[email protected]
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