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THE LACTIC acid market is experiencing healthy growth across the board, with consumer interest in food safety and mineral fortification boosting sales in food applications and industrial applications beginning to take off. The downward pricing trend that plagued the product in the past several years appears to have subsided. Going forward, producers are optimistic that the product will continue to enjoy aboveaverage growth.
Lactic acid prices began to droop in the late-1990s, based on overcapacity and competition from product from China but appear to have rebounded slightly. The price of 88 percent solution of food grade lactic acid was generally steady at around $1.15 per pound from the mid-- 1980s to the mid-1990s, but by 1999 they had dropped to 77 cents, according to the Menlo Park, Calif.-based consultancy SRI International. Technical grade product (88 percent solution) experienced a similar decline, falling from around $1.12 per pound in that time frame to around 70 cents per pound in 1999.
"Imports have caused some price erosion, but prices have stabilized," says Gerrit Vreeman, president of Purac America. "Our prices for 88 percent lactic acids are in the mid-70s to high-80s ct/lb [cents per pound] range depending on quality and volume/packaging."
The improvement comes as market fundamentals come into balance. Purac has expanded capacities at its Blair, Neb., and overseas units and now has ample capacity...