This report follows our last one from August 2017.

Market participants have returned after the summer pause. New crop is below average as expected, exact figures per market still not available. There are almost no offers and no material from kibblers available. Highly speculative and dangerous situation.

In the Valencia region, more than 80% of total pods have been collected, total crop confirmed to be below average, perhaps a little better than originally feared. Quality and yield (11,5–12%) is good. Tarragona region has been collected to a much lesser extent, too early to get a clear picture on the total available quantity. First indication on quality and yield is good. The picture in Mallorca is similar with a below average crop in terms of quantity like last years, and an average yield (13,5%).

The situation in Morocco is unclear. Supposedly average crop, but in general raising availability of seeds in that market, as pointed out in our last report.

No major transactions have been executed yet, the market is in a “price finding mode”.

Kibblers are very reluctant to commit and prefer to wait, speculating on further raising prices. Currently Spanish kibblers buy pots at price levels between € 0,37/kg to € 0,40/kg which would translate into seed prices up by 15–20% from the level before the summer pause.

Compared to September 2016, seed prices may be up by approx. € 0,90/kg — € 1,00/kg. Considering an average yield of 33 %, that results in a price increase on Locust Bean Gum of EURO 2.70/kg to EURO 3.00/kg compared to one year ago. This is significant.

Any inquiry in the market will fuel the rally further. In the next weeks and orchestrated by speculation, supply and demand will meet…. It is not unlikely that short term we will see a further jump in prices due to rather empty raw material warehouses at LBG producers and a strong and intransigent positon of the kibblers.

The final medium and long term price level depends on the fundamentals of the market.

A central role plays the Moroccan market. Does the supply really grow strongly? What effect on the price finding does the fact have that 3 Moroccan kibblers control 80% of the export market.

We hope to be able to come up with concrete crop figures in our next report.

Please contact us for further information any time. It’s not an easy time, but as partners we may sail swiftly through it.


Märstetten, Switzerland, September 12th, 2017

Polygal AG Switzerland
Christian Schink
Sales Manager Food products