Production costs push up Ajinomoto aspartame price

15-Sep-2008 - Last updated on 16-Sep-2008 at 15:49 GMT

Higher production costs are taking their toll on aspartame, as Ajinomoto Food Ingredients announces a 15 per cent price hike for non-contractual customers.

The high costs of raw materials have been having an impact throughout the food supply chain, and price increases for a whole gamut of food ingredients have been communicated over the last year – from enzymes to hydrocolloids.

The sweetener aspartame looks to be no exception. The company, which has its US base in Chicago, Illinois, said it is well known that the global market for carbohydrates used in the fermentation of animo acids have increased in the last two years.

“In addition, increased energy prices, transportation, sub raw materials (chemicals and organic acids), and the recent strengthening of the US dollar [and the weaker Euro and Yen)] push the company to take this action at this time.”

The new pricing comes into effect immediately for non-contractual customers. Ajinomoto has said it expect that, as new contracts are made, the new prices will be applied.

According to Leatherhead Food International, the global market for aspartame is around 17,000 tonnes, worth US$637m.

The UK-based consultancy says that prices had actually fallen since 2005 as there has been oversupply in the market.

Certainly some Chinese operators have made their presence felt in the market; SinoSweet, for instance, recently announced its entry into the UK market – although it says it will be seeking to steal market share from other Chinese companies.

Although Ajinomoto has not given price specifics, Richard Stead, managing director for SinoSweet UK, said that aspartame costs around £10 per kilo (US$17.8).

LFI says the oversupply was one reason for DSM’s exit from the aspartame market in 2006. Alongside Ajimomoto, NutraSweet is the other market leader for aspartame, and held the US patent until 1992.

However Ajinomoto indicates that the era of cheap aspartame on tap could be drawing to a close. It says that demand “is quickly approaching the global supply capacities”.

It has, however, given no indication of where this demand has come from, and indeed measures it plans to take to meet it.