The price of Sodium Benzoate is rising in China due to manufacturing restrictions caused by increasing feedstock prices

China’s economy has been slowed to a great extent in the final months of 2021, and its gross domestic product (GDP) witnessed the slowest pace in 18 months in the fourth quarter as the government struggled with its most daunting economic challenges since the beginning of the coronavirus pandemic. The slowing economy poses a dilemma for Chinese manufactures and private companies as they are the backbone of its economy and accounts for three-fifths of output and four-fifths of urban employment. Lockdowns and travel restrictions to curb the spread of the new delta variant cases in China have started denting consumer spending at the beginning of 2022. According to a market expert, the Chinese authorities have imposed these measures to address income inequality and rein in companies as a part of a long-term plan to protect the economy and national security before the winter Olympics in Beijing.

Due to the country’s zero-tolerance policy, several manufacturers are worried about another round of shutdowns at Chinese factories and ports on the back of the rising Omicron cases. The Chinese companies are struggling with soaring raw materials and shipping prices along with extended delivery times and worker shortages. As per ChemAnalyst, the prices of Sodium Benzoate are consistently increasing in the Chinese domestic market due to the restrictions at the manufacturing units compelled by the short supply of electric power. Sodium Benzoate prices escalated from USD 1495/tonne to USD 1520/tonne from January 7th to January 14th FOB Qingdao, showcasing a hike of 1.65% in the first two weeks of January.

As Sodium Benzoate is highly utilized in the food and beverage industry, China has implemented mandatory requirements for all food products transported via a cold chain, including fruits, dairy products, and drinks, in order to prevent COVID-19 from entering into the country via imported foods. Since January 1st, 2022, all international food-producing, processing, and storage companies must comply with the new registration regulations according to the General Administration of Customs in China (GACC) for exporting food products to China. The Chinese authorities have issued a series of warnings on the consumption of fermented and processed foods due to a deadly mass food poisoning event and the rapid rise of food fraud cases, which will further boost the demand for Sodium Benzoate as a preservative in the country. The increase in exporting and importing food items, including meat, processed food items, fruits, drinks, and others, are expected to continue growing in China as disposable incomes increase and the middle class continues to expand.