China’s citric acid price has witnessed a significant drop in October, due to slack demand and sufficient inventories. However, the price is likely to rise again in December, facing new environmental pressure and the largest festival in China.

 

 

The prices of both, anhydrous citric acid and monohydrate citric acid, have seen a stable growth in the first half of 2017. After remaining more or less stable from June to September, the prices then fall significantly in October, even lower than they have been in the beginning of the year. In November, the price is nearly unchanged from the previous month.

 

 According to market intelligence firm CCM, the high operation rate for citric acid in China is leading to a sufficient market supply for the demand, which adds pressure on the price and hence many manufacturers have lowered their prices significantly. Even the high environmental pressure from governmental institutions is not changing the situation currently. High inventories of citric acids are furthermore able to balance out fluctuations in the production.

 

What’s more, the autumn period is normally the beginning season for slack demand for citric acid, as most of the citric acid is used in beverages like soft drinks and that consumption significantly decreases in the cold months of autumn and winter.

Thirdly, falling corn prices resulted in low production cost. It is known that corn is the major raw material for citric acid. Along with the launch of new corn on the market, quality corn supply tends to be sufficient gradually, so corn prices continue to fall.

Rebound in December and January 2018

However, buyers of Chinese citric acid may speed up their purchasing at this time, as the price is likely to go up again in December and January, according to CCM.

On the one hand, Chinese authorities have announced, that the next round of environmental inspections for China’s manufacturers is coming soon, which will again put pressure on producers and interfere with the production, reducing supply and hence push up the price.

On the other hand, the biggest festival and event in China is approaching in January, the Chinese New Year. On this festival, the sales of beverages are about to skyrocket, which demands a sufficient supply of citric acids. The increasing demand will likely support a further price growth in the months ahead.

About Citric Acid

Citric acid is naturally found in citrus fruits around the world. However, it can also be synthesized artificially by using aerobic organisms.

  

Citric acid is a very important food ingredient worldwide, as it represents the most used food acidulant.

The scope of downstream industries for citric acid is wide. The chemical can be found not only in food and beverage products but also in detergents, cleaning substances, personal care products, pharmaceuticals and medications, as well as plenty other smaller applications.

Chinese manufacturers are playing an important role in the global citric acid production, as half of the top international players are Chinese firms. Other significant nations of citric acid production are the USA, Switzerland, and Israel.

About CCM

CCM is the leading market intelligence provider for China’s agriculture, chemicals, and life science markets.

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