Citric Acid Prices in Europe Witness Drastic Decline
- 26-Oct-2022 4:33 PM
- Journalist: Peter Schmidt
By the beginning of 2022, Europe's several end-user industries were in ruins due to the energy crisis and the EU's following market measures. Energy costs have remained to be the main cause of inflation even as European markets have contracted. GDP numbers for Q2 indicated a 0.7% quarterly increase in the eurozone's economy. Forward-looking indicators, however, continue to point to a deteriorating economy. The flash composite purchasing managers' index (PMI) for September came in at 48.2, marking the third month in a row that the index was below 50. Due to rising energy prices and an increase in operational costs, European firms, including those that produce food chemicals, are finding it difficult to remain competitive.
One of the most widely used Food Additives worldwide is Manufactured Citric Acid (MCA). It increases acidity, improves flavor, and preserves authenticity and ingredients. Citric acid produced in factories is frequently found in sodas, juices, powdered drinks, candies, frozen foods, and some dairy products. Citric acid is an essential component for many different industries due to its properties. An estimated 70% of MCA is used in foods and beverages, 20% is used in pharmaceuticals and dietary supplements, and the remaining 10% is used in cleaning products. In vegetables and fruits, citric acid occurs naturally, whereas MCA is the widely used one as a food and beverage ingredient, not the naturally occurring citric acid.
The costs of Citric Acid in Germany's domestic market have been falling since the third quarter of 2022, according to data provided by ChemAnalyst. September saw a sharp decline in the market's Citric Acid values, which has continued the trend since then. The market volatility has been made worse by the deteriorated demand from the downstream sectors and by prolonged port backlogs, which have made imports from China, Belgium, the Netherlands, and Austria even more problematic.