For the Quarter Ending September 2023
From July to September, Dextrose prices in CFR New York increased from $695 per metric ton to $705 per metric ton, marking a positive conclusion to the third quarter of 2023. This upward price movement indicated a clear preference for higher price levels and reflected an average quarterly rise of 0.73%. Over the quarter, the domestic nutraceutical market for Dextrose exhibited an upward trend, driven primarily by consistent demand from various end-user sectors. Notably, limited to moderate inventory levels prompted sellers to gradually raise their prices each month, playing a crucial role in supporting the optimistic price trend for Dextrose in the United States. Additionally, the cost of importing increased in the latter part of the quarter due to fluctuations in the exchange rate between the US dollar and the Yuan. While inflation showed a slight slowdown in the third quarter of 2023 due to significant changes in the US economy, market participants remained cautious due to the Federal Reserve's decision to increase interest rates. Beginning in the first week of July, there was a noticeable surge in warehousing costs, warehouse utilization, and inventory expenses in the United States. As a result, commodities like Dextrose experienced price hikes due to the rising costs associated with inventory management and storage. In summary, it is likely that importing countries followed a similar trajectory to exporting countries during this period.
In the third quarter of 2023, there was a noticeable rise in the price of Dextrose. Prices went up from $580 per metric ton in July to $594 per metric ton on an FOB Shanghai basis by September, indicating a trend towards higher prices with an average quarterly increase of 2.00%. China, the world's second-largest economy, experienced slower growth than expected in the first half of 2023, which persisted into the latter part of the year, casting a negative shadow over the beginning of the third quarter. This was mainly due to worsening deflation, elevated youth unemployment, and weak foreign demand. Several factors contributed to the increase in Dextrose prices in China during this quarter, but the most significant ones were the strengthening of the Chinese Yuan (RMB) compared to the US dollar and increased local demand from end-user businesses. The rising value of the Yuan and the weakening US dollar resulted in higher export costs, affecting both domestic and international markets. The increased demand and disruptions in the supply chain created an imbalance, exerting upward pressure on prices. As September neared its end, just before the Golden Week holidays, there was a slight uptick in both shipping and manufacturing costs due to a surge in demand and inquiries. Another factor contributing to the price hike was strategic bulk purchases by market participants looking to replenish their inventories. The increased demand led many buyers to expedite their Dextrose procurement, intensifying overall demand during the holiday season.
In the third quarter of 2023, Dextrose prices displayed a consistent pattern, with a slight increase from $670 per metric ton in July to $684 per metric ton CFR Hamburg in September. This trend indicated a notable price hike, resulting in an average quarterly growth of 1.21%. In July, as the economy stabilized and showed signs of improvement, German Dextrose suppliers started placing significant orders to restock their inventories and meet the growing demand within the country. However, as the third quarter began, industry experts observed that the German manufacturing sector still faced challenges. In response to increased inquiries from local companies, importing Dextrose from Asia, especially China, remained an appealing option throughout the quarter. The depreciation of the Euro played a significant role in the price increases in Germany, as the strong US dollar compelled domestic businesses to pay higher prices for imported goods from China. On the economic front, persistent high inflation and the challenging manufacturing environment in Germany continued to impede growth, causing market investors to maintain a cautious stance.
For the Quarter Ending June 2023
In the second quarter of 2023, the US Dextrose market experienced volatility. The first months of the second quarter saw steady price gains due to hampered supply and demand dynamics. Due to increased demand from end-user suppliers, there is a moderate shortage of Dextrose on domestic warehouse shelves, leading to price hikes in the market. In early May, the price of Dextrose was weak and consolidating, with most downstream markets experiencing average demand recently. Dextrose is a sugar alcohol that is produced from corn syrup. In recent years, there has been an increase in the production of corn syrup, which has led to an increase in the supply of Dextrose. The ongoing economic instability in the US and the rising global inflation rate have also contributed to the decline in demand for Dextrose. However, distributors are hesitant to place large orders due to the falling prices. The price of feedstock has also declined due to a surplus supply and increased production. Distributors and suppliers were not restocking their inventories as they were still trying to clear the surplus.
The Dextrose market in the second quarter of 2023 in the Asia Pacific region showcased an overall dwindling trajectory. The prices were recorded at the end of Q2 with an average quarterly declination of 3.00%. From the commencement of Q2 till the mid of Q2, the Dextrose market showed stable price inflation due to consistent domestic and international orders. The increased production rates to refill the inventories with fresh stock and cater to the upcoming demand market situation remained strong. Later with the termination of mid-Q2, the prices fluctuated, and the prices witnessed to deflate significantly. Due to the limited demand that has been successfully balanced with supplies among domestic Merchants as April draws to a close, the price of Dextrose declined steadily. The production momentum was also brought on by a decrease in domestic and international inquiries as well as a decrease in trade activity, which added to the unfavorable market sentiments. The Chinese government has taken steps to cool the economy, such as raising interest rates and reducing the amount of money in circulation. This has also put downward pressure on prices. The prices of raw materials used to make Dextrose, such as Corn, also fell during June, backed by increased production in the United States and Argentina and concerns about a global economic slowdown. This also contributed to the price drop.
The second quarter of 2023 saw a depreciation in the European market for Dextrose. As the second quarter began, prices rose marginally to the gap between the supply and demand side of the market. The prices were recorded at the end of Q2 with an average quarterly declination of 3.22%. The price hike was exacerbated by a national surge in domestic inquiries. However, dealer inventories were sufficient to cover gross demand for the month. Later the prices dropped significantly due to several factors, including increased production output, high demand, and others. Second, imports of Dextrose from other countries increased. Third, the German government relaxed some of the regulations on the import of generic drugs, which led to an increase in the availability of generic versions of Dextrose. The price trend of Dextrose is significantly impacted by weak purchasing momentum and overflowing stocks. The buyers were delaying placing large orders as the monsoon season was arriving, and therefore restocking was halted as the risk of damage increased. Suppliers were providing Dextrose at a lower price, but buyers are still in the wait-and-watch situation for further price drops from manufacturing units. Although import offers increased this week, they remain substantially below domestic prices.
In the first quarter of 2023, the Dextrose prices in the North American region experienced fluctuations with a hiked-up trajectory. During the start of Q1, prices returned to being on the lower side due to merchants having enough inventory to meet the steady demand. Also, an easing of trade activity and ease in inflation impacted the general market trend. When the domestic retailers received high import prices from China in February, prices later increased at the start of the second month. Also, after the New Year's festivities were done, market participants placed newer orders and increased the prices they charged for leftover supplies in the domestic market. However, an increase in orders from end-user industries maintained a high level of demand and resulted in continuous stock utilization. At the termination of Q1 2023, the settlement price for Dextrose rose to USD 755/MT CFR in New York with an average quarterly inclination of 1.12%
The Dextrose market in the first quarter of 2023 in the Asia Pacific region showcased an upward trajectory. On account of a sudden rise in inquiries from the international and domestic markets, manufacturers increased their production capacity amid the arrival of CNY (Chinese New Year) to prevent the shortage or delay in consignments. They recovered consumption and broader activity at a faster rate than initially after the end of the "zero-COVID" regime supported the improved Chinese economy. Following Covid-19, the domestic market reopened and contributed to the normalization of the shattered supply networks and downstream sector demand, mainly from the pharmaceutical sector. At the termination of Q1 2023, the price for Dextrose was recorded at USD 610/MT FOB Shanghai with an average inclination of 2.23%.
In the European region, the Dextrose market fluctuated in the first quarter of 2023. With the commencement of Q1, the prices remained on the lower side in the wake of enough inventories among the merchants to cater to the static demand. Also, ease in trade activity, along with a slowdown in inflation, did influence the overall market trend. Later, at the onset of the second month, the prices rose when German retailers got high import prices from China in February. Nevertheless, orders from end-user industries surged, keeping demand strong and causing continual stock consumption. Also, the government recently established a rule requiring suppliers to keep six weeks' worth of inventory to minimize shortages leaving the market players ordering bulk inventories and eventually influencing the prices. At the termination of Q1 2023, the settlement price for Dextrose rose to USD 725/MT CFR Hamburg with an average quarterly inclination of 0.94%.