Explosion in costs of raw ingredients drives up prices of snack items

The explosion in the price of potatoes, vegetable oils, wheat and maize is very worrying to manufacturers of snack items, since these raw materials serve as the chief ingredients of potato crisps, savoury baked goods, speciality snacks, and biscuits made with cheese and sourdough. The price of wheat has risen by 100%; prices of vegetable oils have increased by more than 130%; and prices of potatoes and maize have climbed by 20% to 30%. Never before have such dramatic price increases been registered simultaneously for so many different raw ingredients. The price hikes are chiefly due to a decline in the cultivation of potatoes because farmers find it more lucrative to grow grain for making bioethanol. As a result, the sector is expecting prices of snack items to rise significantly this year. That was one of the key points in an announcement by the Association of the German Confectionery Industry (BDSI), in the run-up to the 38th International Sweets and Biscuits Fair (ISM) in Cologne.

Sales remained relatively stable in 2007. Figures released to date by the Federal Statistical Office and supplementary estimates by the BDSI indicate that Germany's 15 industrial manufacturers of potato crisps, savoury baked goods, cheesy biscuits, sourdough biscuits and sticks, peanuts, premium nuts, nut mixtures and snack specialities produced approx. 305,000 tons of goods with a production value of €750 million. The increase was about one percent in terms of volume, and somewhat above that in terms of value.

Real cause for satisfaction is provided by the export business. It has grown steadily from year to year, rising by six percent in 2007, to 135,000 tons. Imports of snack items increased once again as well last year, growing by 5.5 percent to 95,000 tons. Germany's balance of trade remains very positive in this sector, and 45% of the snack items produced in the country are exported.

The International Sweets and Biscuits Fair (ISM) is taking place in Cologne for the 38th time. With 1,675 suppliers from 70 countries, the most important fair for the confectionery sector has set a new record regarding its number of exhibitors. ISM is open from Sunday, 27th until Wednesday, 30th January for trade visitors only.

The organisers of ISM are Koelnmesse and the International Sweets and Biscuits Fair Working Group (AISM), which is the conceptual sponsor.

Source: Association of the German Confectionery Industry (BDSI), Bonn, Snack items product group
22nd January 2008

Information on ISM:
www.ism-cologne.de (www.ism-cologne.com)

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