Dear Business Partner ! 

As already informed in our last newsletter Mrs. Cornelia Kranz supports our team in matters of quality management and food technology and we are happy to announce that a new colleague started at A2 Trading Ltd.- Mrs Alisa-Christin Schnoor. She will be helping us in matters of correspondence especially with foreign countries. This is very important for us as especially the countries of South Amercia will play a bigger role for A2 Trading Ltd in the future. Thus it was very important for us to strengthen our team in this area.

After having seen price decrease or stability for some raw materials last year we have to face increases this year and I personally see this trende to proceed also in the scond half of 2010. Mainly this is due to the US Dollar : On 4th January the exchange rate was set at 1,4396 whereas today it is 1,2170. 

In the following please see the market reports for our key products: 

Agar Agar 

Prices for Agar Agar have increased latela, not only due to the strong US Dollar, but also, because the demand for the product has increased and production cost in China and Indonesia have gone up- a higher market price is seen especially for Agar Agar made from Gracilaria seaweed. The prices for European grade (Gelidium) are on a stable level. We do not see the prices to go down in the second half of the year, even more we expect th eprices to increase further ! Required quantities should therefore be covered in time. 

Carrageenan 

Also here the prices for the raw material have gone up as well as the production cost. We do not expect a decrease of the prices in the near future. 

Gum Tragacanth 

We can offer various grades as per your request. Changes in price will only be appearing due to the weak Euro and we therefore suggest to cover the demand for at least the second half of the year. 

Locust Bean Gum   

Prices have stayed stable at a very low level. We do not expect major changes within this year. Demands can be covered on long term without risk. 

Guar Gum 

1.        Market Report: 

Due to the weak Euro and the new regulation of the EU price increases are likely. A higher demand form the oil drilling industry has already caused a price increase. Like every year we have to wait for the outcome of the monsoon rain having a major impact on the prices at this time of the year. The first forecasts are expected within the first half of June.   

2.        New EU regulation EG 258/2010: 

Although new requirements for the production and the import of Guar Gum had been implented in 2007 after PCP had been detected in Guar Gum, the EU has discovered serious lack in hygiene at the some factories in India again last year. The report of the EU delegation proves that the accredited laboratory Vimta has still detected high PCP levels in some batches of guar gum last year. As a consequence of this the EU has now additionally announced that samples out of the batches have to be drawn by members of the competent Indian authority. Until now the producer draw the samples themselves. A2 Trading is member of the Hamburger Chemikalineverein that is in steady contact with the EU in order to regulate and make possible the importation of Guar Gum for the importers in the EU. We have informed our customers already on 29th April about the changes the new regulation implements and can additionally inform you that we, A2 Trading Ltd., regularly audit our suppliers of Guar Gum in line with our ISO/HACCP certifiation and only buy goods from reliable and well known producers. 

Xanthan Gum 

Prices are still at low level and are only influenced by changing US Dollar exchange rates. Supposing the demand from the oil drilling will also rise for Xanthan Gum we suggest to cover your long term demand already now. 

Konjac 

The prices are still at a high level due to the small crop of last year. A further increase in prices is expected until the end of the year and quantities should be covered already now. 

Colourings 

Cochenille /Carmine

We are happy to inform you that we can offer Cochenille and Carmin from now on. Family Ahrens has taken over a factory in Chile and will be represented by A2 Trading Ltd. for the sale of both products in the future. We can offer the dry insects (Cochenille) as well as all grades of Carmine. About 220 hectares belong to the factory out of that 85 hectares are cultivated. It is also planned to expend the cultivated ground in the near future. We will keep you informed on  the new developments. We will keep you informed on the development with further reports soon. For the present and as we know that still a lot of customers are looking for additional quantities of Cochenille and Carmine we suggest to cover your needs now as the already enormously high prices are expected to go up further. We look forward to your inquiries. 

And finally we all have obsering two crises during the last days: first for sure was the topic of the weak Euro and the second to be worried about the captain of our national soccer team, Michael Ballck. Now that we know that he will not be able to play at the World Cup we at least have a good explanation in case Germany does not reach the final round. Having said this I wish all of us good and fair matches and a joyfull World Cup in South Africa! 

With best regards 

Mirko Ahrens