Crisis averted, but for how long?
As it stands today, the Co2 situation is still in a state of flux. We think that Government intervention has put off the impending shut-down of pork producers and hopefully avoided the need to cull perfectly healthy pigs on farm. But we’re not yet out of the woods.
What has to happen now is a rapid and possibly painful re-structuring of the Co2 market over the next three weeks to make it sustainable for the gas to continue being produced but at a vastly inflated cost (a five or six fold increase).
We’re already getting reports of existing supply contracts being ripped up and replaced with new, higher priced offerings, with wholesalers citing ‘force majeure’ as the reason. This will continue to happen until higher prices are established across the board. It will also affect the Co2 market well beyond Britain’s shores as it’s an internationally traded commodity.
We’ve also had contact with some new entrants to the Co2 market who, because of the higher prices, say they are able to start capturing and supplying food grade Co2 as a by product of their regular processes. But this will take much longer than three weeks to come on stream. One quoted three to six months lead time.
Right now all we can do is wait and see how quickly these higher prices filter through the system and what kind of additional, sustainable Co2 production that prompts. As we write today (Friday 24 September) we still don’t have a complete picture of how much Co2 is available in the system currently, when new supplies will be coming on stream and if that will be enough to avert plant shut downs. We’ll know more in the next few days.