Non-GMO lecithin availability likely to become tight

Degussa Food Ingredients, a key supplier of non-GMO lecithins to the food industry, is warning processors of major supply problems on the horizon. This is particularly true for European food manufacturers, nearly all of whom had decided -- after the EU legislated new labeling and traceability requirements for genetically modified food and feed in April 2004 -- to exclusively use ingredients with guaranteed non-GM origin in order to avoid the necessity to put a GMO claim on their labels.

Lecithins play a major role as food additives (emulsifier and dispersing aid) in applications like baked goods, chocolate, margarines and spreads, instant products and convenience foods. They are also used as dietary supplements.

With regard to soy lecithins, the predominant source for non-GM soy has been Brazil, as the growth of GMO soy was officially banned in the past. In the meantime, however, this situation has changed. In March 2005, President Lula da Silva officially approved GMO soy production in Brazil.

Since March 2003, the Brazilian Government -- through a number of consecutive “Provisional Measures” -- had at least tolerated the growth of GMO soy and accepted the respective harvests to be sold for export. As a result, the percentage of GMO soy being grown in Brazil has been increasing for two years. While in the beginning, GMO soy was only found occasionally in the south of Brazil, today one can find such production operations all over the country. The level of “contamination” is estimated to be up to 35% in the 2005 season vs. ~ 28 % in some regions in 2004 and ~ 10 % in 2003.

This development has led to greater difficulties in maintaining established Identity Preservation (IP) Programs. Not only is the risk of contaminations increasing significantly, but also the question of adequate supply is looming. In addition, the Brazilian soy crushing industry (the origin of lecithins) has faced growing economical pressure of late, leading to the closure of several oil mills that had been participating in IP systems in the past. Thus, the number of reliable producers of non-GM soy derivates has declined.

Taking all these aspects into consideration, a shortage of non-GM lecithins is likely by 2006 and could be felt as early as the second half of 2005. This is also reflected by the fact that the oil mills, as the prime producers of crude lecithin, have more than doubled their prices for crude lecithin compared to mid-2004.

In an early anticipation of this development, Degussa Food Ingredients through their proximity to and permanent contacts with key players in the Brazilian crushing industry, have secured decent volumes for their non-GM lecithin business. “We have been analyzing the developments in Brazil intensively during the last months and, together with our Brazilian partners, have reacted accordingly," notes Dr. H.-G. Bueschelberger, Business Director, Lecithin. "Today we can guarantee our customers that we are able to fulfill their demand for non-GMO lecithins during 2005. It is likely that parts of the European Food Industry will face availability problems. In such a case we can only recommend to contact us before thinking about using lecithins without guarantees and starting to label.”

For further information, contact www.degussa-foodingredients.com.

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