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Global Potato Starch Prices Expected to Decline in November Amid Consumer Sentiment Slump
Global Potato Starch Prices Expected to Decline in November Amid Consumer Sentiment Slump

Global Potato Starch Prices Expected to Decline in November Amid Consumer Sentiment Slump

  • 30-Nov-2023 1:59 PM
  • Journalist: Motoki Sasaki

The prices for Potato Starch are likely to fall globally in November 2023. This anticipation is rooted in a combination of factors such as diminished demand from end-user industries, elevated interest rates, reduced feedstock prices, and an oversupply in the market. Potato Starch is known for its versatile applications in the food industry, textiles, paper production, pharmaceuticals, and various other sectors due to its unique properties and wide availability as a feedstock. However, recent declines in demand from these end sectors are likely to contribute to the projected decrease in Potato Starch prices.

The Chinese economy has faced challenges in achieving a robust post-COVID recovery this year due to sluggish global growth and heightened geopolitical tensions. Recent reports indicate that China is grappling with a surge in respiratory illnesses resembling a form of pneumonia, particularly with the onset of winter. This situation may further dampen already slowing consumption demand, potentially causing a decline in Potato Starch prices. There are speculations that China's manufacturing activity is likely to contract for a second consecutive month in November as factory owners contend with a lack of domestic and international orders. This scenario further reinforces the expected downward trend for Potato Starch.

In India, the recent moderation in retail inflation, driven by lower food prices, brings it closer to the central bank's medium-term target of 4%, which could potentially lead to a decrease in potato prices, a significant raw material, consequently impacting Potato Starch prices similarly. Additionally, India's merchandise exports have recently declined, attributed to weakened demand from Europe and the United States due to elevated interest rates following the Russia-Ukraine conflict and geopolitical tensions in the Middle East, further contributing to the global downward trend in Potato Starch prices.

In the United States, there was an unexpected move by the US Federal Reserve, as it announced its decision to keep the benchmark interest rate unchanged within the range of 5.25% to 5.50% during its latest meeting. This marks the second consecutive meeting in which the central bank has chosen to retain the current monetary policy, which could lead to a decline in consumer spending and Potato Starch prices. Furthermore, the decline in oil prices, attributed to increasing production in the United States and the fading of geopolitical tensions in the Middle East, also supports the downward trajectory for Potato Starch prices.

Within the Eurozone, the decline in business activity showed signs of easing in November. However, it remained broad-based, indicating that the bloc's economy will likely contract again this quarter as consumers persist in curtailing their spending. Manufacturers responded by swiftly reducing their purchasing activity and decreasing inventories of raw materials and finished goods. Additionally, inflation in Europe has recently subsided, primarily due to a significant decrease in energy prices, which could contribute to a decrease in operating costs and lead to a decline in Potato Starch prices.

According to ChemAnalyst, Potato Starch prices are projected to fall further by the end of the year due to a drop in demand from end-user pharmaceutical and food sectors and substantial market stocks. Furthermore, feedstock costs will fall if inflation eases further, putting the Potato Starch market on the north side.

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